The Social Responsibility of Business is to Increase Profits Essay

The Social Responsibility of Business is to Increase Profits - Essay Example Corporate social responsibility, a term used to describe a the way in which a corporation operates in regard to the community and environment in which it resides and the ethical and moral standards in which it conducts business; is quickly becoming an increasingly important issue as consumers are holding corporations progressively more accountable for their methods of business practices and operations. With today's current global economy, corporations can no longer operate on the level of autonomy that was once common. This is evidenced in the increasing decentralization of the traditional corporate hierarchy that is becoming more common in corporations across the nation. Costlo has been a leader in the empowerment of its' employees. The team environment has attributed to company's' many success including the current high level of employee efficiency and morale. Regardless of these positive aspects of Costlos' corporate environment, the net losses posted for the last two quarters denotes a need for fiscal policy and business model change while attempting to maintain its' current level of stakeholder confidence. As the fifth largest retailer in Over the years, the topic of corporate social responsibility has been gaining ground both in popularity and importance. The traditional Friedman or shareholder view of a corporations' only role in social responsibility is to "use its resources to engage in activities designed to increase its' profits" (Friedman 1970) in itself may be narrow though it is nonetheless true. While earning and increasing profits will always be the basis of success for any business Friedman's belief that ""business" as a whole cannot be said to have responsibility" (Friedman 1970) is becoming increasingly outdated. More importantly, the public perception of corporations is becoming ever more important. Cutting costs by decreasing employee benefits and enacting salary freezes may temporarily increase the company's net profits, it would do irreparable damage to employee morale as well as public perception of the company, possibly alienating our current consumer base. In the long term, this will negatively a ffect profits considerably. Costlo's achievement of becoming the fifth largest retailer in the United States was done so with virtually no marketing. Highlighting the corporations' continued dedication to its' employees and to the communities in which its' stores operate through advertising, is an ideal way to promote a positive public perception. This will serve as a way to build brand name recognition as well as lure back former customers that may have strayed to competitors. Given the current decline in profits, the initial start-up costs for this marketing strategy may further drive profits down in the short-term. These objections by investors, while justified, are short sighted and it should be noted that not looking toward the long-term as a measure of success as well, is just as short sighted. The fact that corporations can be profitable while maintaining Corporate Social Responsibility 3 corporate social responsibi