Richard E.

Smith (2011) defines Social responsibility is an ethical or ideological theory that an entity whether it is a government corporation, organization or has a responsibility to society (p.2). According to Archie Carroll, corporations should always satisfy four different types of responsibilities. Those responsibilities are: Economic, legal, ethical and discretionary (Hunger, & Wheelen, 2012, p. 73). Unlike Milton Friedman who contends that a companys only social responsibility is to engage in open and free competition without deception and fraud (Hunger, & Wheelen, 2012, p. 72). Carroll realizes that a business needs to make money while being ethical. In Carrolls view, a business can survive by putting economics first while other responsibilities follow. In order of priority, Carroll itemizes these responsibilities into four categories namely economic, legal, ethical and discretionary. Following Carrolls order of priority, the following stakeholders fall into one or more of these categories. Responsibility towards owners and investors: Owners are the persons who own the business. They contribute capital and bear the business risks. The primary responsibilities of management is to assure a fair and reasonable rate of return on capital and fair return on investment can be determined on the basis of difference in the risks of business in different fields of activity( MIT, 2011). With the growth of business the shareholders can also expect appreciation in the value of their capital. Investors are those who provide finance by way of investment in debentures, bonds, deposits etc. Banks, financial institutions, and investing public are all included in this category.

Responsibilities towards Employees: One thing that all companies must keep in mind is that employees are stakeholders in the business. They have a vested interest in what the company does and how it is run. When the company is perceived to feel that their employees are a valuable asset and the employees feel they are being treated and such, productivity increases ( MIT, 2011). By making decisions that affect its health as seen to those stakeholders that are outside of the business environment. Responsibility towards the Governments: As a part of their social responsibility, management must conduct business affair in lawful manner, honestly pay all the taxes and dues, and should not corrupt public officials for selfish ends. Business activities must also confirm to the economic and social policies of the government. Responsibility towards consumers: In a competitive market, serving consumers is supposed to be a prime concern of management. But in reality perfect competition does not prevail in all product markets. In the event of shortage of supply there is no automatic correction (the economist, 2011, p.79-81). Besides consumers are often victims of unfair trade practices and unethical conduct of business. Consumer interests are thus protected to some extent with laws and pressure of organized consumer groups. Management should anticipate these developments, satisfy consumer needs and protect consumer interests. Goods must be of appropriate standard and quality and be available in adequate quantities at reasonable prices. Management should avoid resorting to hoarding or creating artificial scarcity as well as false and misleading advertisements. Responsibility towards the community and society: The socially responsible role of management in relation to the community are expected to be revealed by its policies with respect to the employment of handicapped persons, and weaker sections of the community,

environmental protection, pollution control, setting up industries in backward areas, and providing relief to the victims of natural calamities etc. Relativism with respect to ethics is the position which maintains that moral codes are the relative standards of a particular culture or society (the economist, 2011, p.79-81). However, there are some normative issues concerning rights, fairness, and justice that be applicable throughout the world. Ethical issues cannot possibly be reduced to questions of statistically interpretable facts or to the determination of maximally efficient strategies for reaching ethical goals. They concern questions of rights, fairness, and justice. While culture does permit some behaviors that many might consider as unethical in other parts of the world, to build a truly great global business, business leaders need to adopt a global standard of ethical practices ( MIT, 2011). One reason for this idea is because in many parts of the world, businesses are required to make payments or bribe an official in order to seek a contract. While this is common practice in these countries, in America, we consider it as unethical. According to James Harrison, What's significant about these ethical scandals is the damage they do to great institutions (2012, p.479). Global standards should take into consideration all areas of morality or ethics that could affect more than one part of the world. An organization such as The International Standards Organization (ISO) has determined that there are five standards, act with integrity, always provide a high standard of service, act in a way that promotes trust in the industry, treat others with respect, and take responsibility (2011). there are a number of shortcomings. A significant flaw is that the standard attempts to create the same guidance for private and public sector organizations. While these standards are good, there are still small flaws, Smith (2011) argues that in addition to these standards, profit is necessary for a corporate social responsibility to flourish (p.6).

References Hunger, D., & Wheelen, T. (2012). Strategic management and business policy: Toward global sustainability. Upper Saddle River, N.J: Pearson Prentice Hall. Smith, R. (2011). Defining Corporate Social Responsibility: A Systems Approach For Socially Responsible Capitalism. Retrieved from repository.upenn.edu/cgi/viewcontent.cgi?article=1009&context=od_theses_mp Harrison, J. (2012). Stakeholders, social responsibility, and performance: Empirical evidence and theoretical perspectives. Academy of Management Journal, 42(5), 479. International Standards Organization. (2010). ISO 26000 project overview. Retrieved March 12, 2011 from, http://www.iso.org/iso/iso_26000_project_ overview.pdf. Let a million flowers bloom. (2011, March 12). The Economist, 398(8724), 79-81. Massachusetts Institute of Technology. (2011). Sustainability: The embracers seize the advantage. MIT Sloan Management Review. Retrieved from http://c0426007.cdn2. cloudfiles.rackspacecloud.com/MIT-SMR-BCGsustainability.