Define and discuss social responsibility.
Corporate social responsibility (CSR) is a view of what companies are supposed to do that is different from the traditional view. Traditionally, people have expected that a company’s only real goal is to make money for the people who own it. CSR rejects that attitude. It holds that firms need to act in ways that take into account the needs of society as a whole and of the various people who can be affected by the firm’s actions.
CSR is a good idea in theory, but it has some problems in application. It definitely makes sense to say that firms should not only think about how they can make money. They should also try to do things like making their community better places, paying living wages, and so forth. However, it is very hard to know how any individual firm can afford to do this if all firms are not forced to do it. A firm that takes CSR to heart is likely to have higher costs than a firm that does not. This means that the CSR firm’s prices will be higher and consumers will be less likely to buy its products.
In essence, what this means is that consumers must enforce CSR if they value it. They must buy from firms that engage in CSR and they must punish firms that do not. This is the only way to really encourage firms to engage in CSR.