Critical Analysis of Social Responsibility of Business to Increase its Profits

According to Ahn and Park (2018), social responsibility develops a systematic approach for conducting entire operations of the business in an ethical process. The development of this process ensures positivity in the existing services and develops proficiency in the activities. On the other hand, implementation of traditional approaches and negativity in the current working culture of an organization affects financial operations. Most of the management of the companies have to develop suitable connection among one another and reduce flaws in the services. The development of negativity in the working culture provides a direct effect n the operations and reduces social responsibility within one another.

Moreover, development of adequate morals and ethics in the working procedures of the workers among the organization helps in maintaining sustainability. The basic principle is to develop sufficient morals and ethics among the workers and reduce efficiency in the operations. It is vital for managing daily activities in the organization and promotes sense of positivity in the activities (Giannarakis et al. .2016). The utilization of appropriate social responsibility operations is essential for minimizing any type of negativity and adding profit to the firm. In this article, there has been extensive focus provided by the author that every member of the organization does not contribute to the success of the firm.

The implementation of suitable approach is useful for predicting existing viability of the operations and develops profit for the firm. It is a vital contributor for deciding existing growth scenario for the organization and minimizes any type of redundancy (Stoian and Gilman, 2017). The implementation of systematic methods in social responsibility helps in ensuring systematic flow and provides direct impact on the wealth of the firm.

CSR Pyramid Theory

Furthermore, implementation of the pyramid theory develops adequate strategies for measuring existing procedures in creating profit and develops and creates a stable working environment. The development of favorable framework helps in maintaining an infrastructure for evaluating responsibility of the organization towards the society (Habib and Hasan, 2019). The development of the theory is vital in analyzing practical approach taken by the organization for improving corporate social responsibility procedures and develops adequate profit. However, according to the Friedman approach there is development of suitable mechanisms for minimizing flaws in the operations and develops co-ordination among the management and employees.

Figure 1: CSR Pyramid Theory

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The implementation of suitable framework ensures stability in the economic operations and develops adequate growth for the company in the market. The management of the organization has to establish a proper strategy for dealing with various types of stakeholders and employees during performance of the business operations.  In the current theory, there has to be development of a systematic collaboration among the employees and the management in developing suitable resources for managing profit scenario (Bae et al. 2019). Most of the organizations have to establish adequate regulations and laws for maintaining proper coordination among management and create suitable social responsibility activities. In addition, development of ethical responsibility and values among entities helps in systematically managing entire operations and improve the profit scenario. On the other hand, Friedman’s approach focuses on developing profit for the company by encouraging various types of illegal activities. It provides a negative impression on the image of the company and lacks appropriate quality in promoting social responsibility in the procedures.

Moreover, the pyramid theory is a modern-day approach adopted by the management to evaluate existing framework in maintaining social responsibility. It provides a direct effect on the operations of the firm and develops extra profit in the future. The management of organizations focuses on creating various types of norms in the culture of an organization. The development of multiple types of norms and values among workers ensures co-ordination and manage operations in an appropriate process. On the other hand, adequate development of corporate responsibility principles leads to conflict among entities and reduces profit. The development of ethical values and morals in the organization creates a good reputation and manages to handle any type of stressful situation. It is a vital framework developed for building sustainability and commitment of the organizations towards the society (Alrowwad et al. 2017). Moreover, development of adequate procedures in social responsibility ensures maximization of wealth and develops a definite edge. It is vital framework developed for managing every aspect in the society and creates profit in the operations among every level for the firm.

Stakeholder Theory

The development of Stakeholder Theory helps in managing systematic process of the company and manages existing production. The main motive of the theory is to develop a smooth decision-making process by the management to establish operations. According to this theory, there should be equal preference provided to every entity in the management that helps in ensuring stability in the activities. It is a framework that helps in creating connection among social responsibility procedures and profit maximization (Chuang and Huang, 2018). The suitability of this theory ensures maintenance of systematic values among the employees and creates flexibility in the operations.

Figure 2: The Stakeholder Theory

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However, Friedman developed a traditional approach for reducing systematic mechanisms and manages social responsibility within a business (Friedman et al. 1993). The development of complex strategy provides negativity in the operations and reduces total value for the firm. The implementation of the stakeholder theory is vital for managing various interests of the stakeholders and conduct activities within organization in a systematic process.

Furthermore, development of corporate social responsibility within the process of the business helps in maintaining long- term relations among management and employees within a company. The management of the organization focuses on developing numerous ethics and morale principles among the mind of the workers. It is essential for driving confidence among the employees and manages overall process of the organization in an efficient process (Leung and Snell, 2017). However, according to the article there has been development of inadequate procedures in parts of the management that provides direct effect on the operations. The reduction in bonding among one another creates sense of conflict and disrupts entire operations. It provides a direct impact on the existing process in the operations and develops negativity. Most of the directors of the organizations in different parts of the world focus on setting right relation with the employees.

According to Mishra and Modi (2016), development of secure connections among various entities working in the company helps in developing systematic law among the operations. It is a vital indicator used for improving reputation of the company and creates stability in the existing operations. The development of suitable social responsibility framework by the management of the company creates long term strategy and achieves long- term objectives. It is an essential procedure used for measuring reliability in the existing financial structure of the organization and manages long- tem profit in the future. The principle of social responsibility helps in ensuring suitability and providing direct impact on the image of the organization. The utilization of social responsibility creates proficiency in financial performance and regulates operations in a systematic process. 

Conclusion

It can be stated from the above study, that there has been appropriate review regarding the article that helps in evaluating contribution of social responsibility towards the operations in an organization. There has been development of adequate reviews and discussion on various theories on the importance of social responsibility in an organization. It provides an analytical review of appropriate procedures required for managing social responsibility procedures and maximize wealth of an organization. The development of a suitable discussion about various ideas developed by the authors helps in evaluating role of social responsibility in a company. It is vital for improving existing operations and creates a competitive edge for the firm.

References list:

Friedman, M., Donaldson, T. and Werhane, P., 1993. The social responsibility of business to increase its profits. Business in Ethical Focus: An Anthology.

Ahn, S.Y. and Park, D.J., 2018. Corporate social responsibility and corporate longevity: The mediating role of social capital and moral legitimacy in Korea. Journal of Business Ethics, 150(1), pp.117-134.

Giannarakis, G., Konteos, G., Zafeiriou, E. and Partalidou, X., 2016. The impact of corporate social responsibility on financial performance. Investment management and financial innovations, (13, Iss. 3 (contin. 1)), pp.171-182.

Stoian, C. and Gilman, M., 2017. Corporate social responsibility that “pays”: A strategic approach to CSR for SMEs. Journal of Small Business Management, 55(1), pp.5-31.

Habib, A. and Hasan, M.M., 2019. Corporate social responsibility and cost stickiness. Business & Society, 58(3), pp.453-492.

Bae, K.H., El Ghoul, S., Guedhami, O., Kwok, C.C. and Zheng, Y., 2019. Does corporate social responsibility reduce the costs of high leverage? Evidence from capital structure and product market interactions. Journal of Banking & Finance, 100, pp.135-150.

Alrowwad, A.A., Obeidat, B.Y. and Aqqad, N., 2017. The impact of transformational leadership on organizational performance via the mediating role of corporate social responsibility: A structural equation modeling approach. International Business Research, 10(1), pp.199-221.

Chuang, S.P. and Huang, S.J., 2018. The effect of environmental corporate social responsibility on environmental performance and business competitiveness: The mediation of green information technology capital. Journal of Business Ethics, 150(4), pp.991-1009.

Leung, T.C.H. and Snell, R.S., 2017. Attraction or distraction? Corporate social responsibility in Macao’s gambling industry. Journal of business ethics, 145(3), pp.637-658.

Mishra, S. and Modi, S.B., 2016. Corporate social responsibility and shareholder wealth: The role of marketing capability. Journal of Marketing, 80(1), pp.26-46.