Management Social Responsibility

Essay by aldhafera March 2004

download word file, 10 pages 4.7

Since the industrial revolution, a certain amount of tension has existed between business and society over the economic benefits provided by business and perceived negative consequences of business activity (Dooley, Robert S. & Lerner, Linda D., 1994, pg.702). Management now regularly faces decisions that have a dimension of social responsibility (Robbins, Stephen P., Bergman, R., Stagg, I., Coulter, M., 2003, pg 136). Being a socially responsible company has been such a big issue for many businesses. It might sway the financial performance of the company either positively or negatively. The manager of a company has to be able to make an ethical decision in order to be socially responsible.

As proposed by Robbins et al (2003),there are two opposing views of social responsibility that can be related regarding the organisation's approach to social responsibility which have impacts on the financial performance; they are The Classical View and The Socioeconomic View.

As proposed by Robbins et al (2003), the classical view holds that management's only social responsibility is to maximise profits. In this case, typically, the company merely cares about making profit without putting any concerns on neither the society and environment. This type of company normally puts financial performance as the first priority. Being a socially responsible organisation surely incurs a cost. 'This cost would have to be passed on to the consumer through higher prices or shareholders would have to accept a lower return on their investment' (Collins, R. & McLaughlin, Y., 1998, pg. 691). Meanwhile, the organisations which adopt the classical view tend to focus on the high return on their investment.

Manville Corporation, for instance, is a perfect example of the classical view. The company was solid enough to be included among the giants of American business (Gellerman, Saul W, 1986, pg. 3). The company was sued...