The following arguments favour corporate social responsibility: 1. Protect the interests of stakeholders: ADVERTISEMENTS: Labour force is united into unions which demand protection of their rights from business enterprises. To get the support of workers, it has become necessary for organisations to discharge responsibility towards their employees. ...
Caveat emptor (‘let the buyer beware’), no more holds true. Consumer today is the kingpin around whom all marketing activities revolve. Consumer does not buy what is offered to him. He buys what he wants. Firms that fail to satisfy consumer needs will close down sooner or later. Besides, there are consumer redressal cells to protect consumers against anti-consumer activities. Consumer sovereignty has, thus, forced firms to assume social responsiveness towards them.
Consumer sovereignty has, thus, forced firms to assume social responsiveness towards them. Firms that assume social responsibilities may suffer losses in the short-run but fulfilling social obligations is beneficial for long-run survival of the firms.
With increase in the level of education and understanding of businesses that they are the creations of society, they are motivated to work for the cause of social good. Managers create public expectations by voluntarily setting and following standards of moral and social responsibility.
The costs are passed to consumers by increasing prices of goods and services.
No view of competitive corporate environment: Every business operates in the larger business system. It cannot come out of that system and transformation of society within the existing parameters of business system seems to be illusory.
Thus, there is increasing awareness of social responsibility. To grow in the environment of dynamism and challenge, business concern does not decide whether or not to discharge social responsibilities but decides how much social responsibility to discharge.