Corporate Social Responsibility

Read this section, paying particular attention to the sections on communities, financial contributions, volunteerism, and supporting local causes to learn more about the positive impact of businesses.

KEY TAKEAWAYS

  • Corporate social responsibility refers to the approach that an organization takes in balancing its responsibilities toward different stakeholders when making legal, economic, ethical, and social decisions.
  • Companies are socially responsible to their various stakeholders – owners, employees, customers, and the communities in which they conduct business.
  • Owners invest money in companies. In return, the people who manage companies have a responsibility to increase the value of owners' investments through profitable operations.
  • Managers have a responsibility to provide owners and other stakeholders with accurate, reliable financial information.
  • They also have a fiduciary responsibility to safeguard the company's assets and handle its funds in a trustworthy manner.
  • Companies have a responsibility to guard workers' safety and health and to provide them with a work environment that's free from sexual harassment.
  • Businesses should pay appropriate wages and benefits, treat all workers fairly, and provide equal opportunities for all employees.
  • Many companies have discovered the benefits of valuing diversity. People with diverse backgrounds bring new talents and fresh perspectives, and improve a company's ability to serve an ethically diverse population.
  • Sellers are responsible – both ethically and legally – for treating customers fairly. Consumers have certain rights: to use safe products, to be informed about products, to choose what to buy, and to be heard.

  • Companies also have a responsibility to the communities in which they produce and sell their products. The economic impact of businesses on local communities is substantial. Companies have the following functions:

    1. Provide jobs
    2. Pay taxes
    3. Support local education, health, and recreation activities
    4. Donate funds to community projects
    5. Encourage employees to volunteer their time
    6. Donate equipment and products for a variety of activities