2. Social Responsibility
Social Responsibility is one of the social issues
in International Business.
It refers to obligation of an organization's
management towards the welfare and interests
of the society in which it operates.
The word ‘responsibility’ means that the
business has some moral obligations to the
society.
The profit is not the primary purpose.
3.
4. The companies social performance can be
judged by social responsiveness shown to the
needs of the community.
The primary objective is to strengthen itself
with due regard to the interests of the
shareholders, employees, and consumers.
Business should pay attention to the long term
welfare of society.
5.
6. Social Orientations of Business
Social Orientation is a business philosophy
that takes the society’s well- being into
account, in addition to the satisfaction of the
consumer’s wants.
The extent of social involvement of a company
may change over time and can be described by
some models such as:
a) Carroll’s Model
b) Halal’s Model
c) Ackerman’s Model
7. Carroll’s Model
Archie B. Carroll proposed a model having 4
categories of obligations of corporate
performance.
-Economic
-Legal
-Ethical
-Discretionary
Economic entity: The firm should have
efficient operations to satisfy economic needs
of the society
8. Legal responsibilities: A company is bound to
obey the law of the land.
Ethical responsibilities: Norms which the
society expects the business to observe though
they are not mandated by law.
Discretionary responsibilities: voluntary
contribution of the business to the social cause.
9. Halal’s Model
William E. Halal’s proposes ‘return on
resources model of corporate performance’.
No corporate social posture will be value-
free.
Beyond a certain level of economic activity,
the social issues at stake may become
conflicting.
10. Ackerman’s Model
It has 3 Phases in the development of social
responsiveness:
a) Top management recognizes the existence of
a social problem.
b) Company appoints staff specialists to study
the problem and suggest ways.
c) Implementation of social responsibility
programmes.
11. Extent of Social Orientation and
Involvement
On the basis of extent of social orientation and
involvement of companies, they are classified
as:
a) Anti- social: No social orientation but they
are unfair in the conduct of the business.
b) Indifferent: No social orientation beyond
discharging legal as well as economic
responsibilities.
c) Peripheral: social orientation for name sake
12. d) Socially oriented: high level of social
orientation but real involvement is constrained
by limited resources
e) Committed and very active: high level of
commitment and real involvement in the social
welfare programmes.
