Roles of Business, Corporate Social Responsibility and Ethical Conduct
Motivations that drive business: In more specific business terms, businesses in the free enterprise are motivated by: Satisfying the needs and wants of buyers: Needs and wants create demand for goods and services. Competition: Contest between businesses to win consumers Profit: Amount of money left over after a business pays its costs of production. In the United States, profit is the main motivation for starting a business.
Who Benefits from Business? Major Stakeholders of Business Business Owners Employees Government General Society A stakeholder is anyone who has a stake in something, anyone who stands to gain or lose. Business benefits everyone. It is what makes our economy strong. Healthy Businesses = A Healthy Economy But how does it benefit each stakeholder?
Society Benefits from Business Business plays several key roles in the US The most important role of businesses is to make and distribute products and services needed by consumers, government, and other businesses. Business owners make a profit. Businesses provide employment. When people are employed they can buy goods and services. Businesses and workers pay taxes. Governments collect taxes and spend to provide services. Governments also purchase goods and services from businesses. Successful businesses contribute to more jobs, more income, and a thriving economy in the communities where they operate.
Business & Society Businesses have the duty of social responsibility. Social Responsibility: The idea that businesses should act in a responsible and fair way toward their employees and society as a whole. Doing business entails doing things ethically and morally for employees, the environment, and society.
What is social responsibility? Social responsibility refers to the duty of a business to contribute to the well-being of a community. In considering its responsibility to society, a business must weigh the interests and concerns of many groups, called stakeholders. Examples include: protection of the environment, inclusion of minorities and women in the workplace, employments of physically challenged and older workers, and a healthy and safe work environment.
Ethics Ethics are principles of morality or rules of conduct. Business ethics are rules about how businesses and their employees ought to behave. Ethical behavior involves conforming to these rules. Unethical behavior violates these rules. A code of ethics is a set of rules for guiding the actions of employees or members of an organization. The ethical conduct of a business is greatly determined by its top management. Executives who show a strong moral character and make ethical business decisions set the ethical standards for a business.
Profits versus Broader Interests Corporate efforts must be made to balance economic activities (profit-making) with broader stakeholder interests, such as environmental and social needs. “Corporate social responsibility is the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life.” The World Business Council for Sustainable Development (WBCSD)