B2B | Small Business

What Is Social Responsibilty for an Organization?

Author:  Brian Hill
Publish Date: 
A company has a responsibility to not harm the environment. This responsibility was once limited to not contributing to air or water pollution. Increasingly, the concept of sustainability has become an aspect of corporate responsibility as well. Sustainable business activities include making products with recycled or renewable materials. For example, diesel fuel can be made with the oil from the seeds of the jatropha plant, a renewable raw material that can be regrown, in contrast with fossil fuels that are depleted over time. Companies dedicated to environmental responsibility continually review their manufacturing, distribution and purchasing systems to move toward greater sustainability.

Companies benefit from the skilled workforce available in the areas where they operate and from infrastructure provided such as highways, airports and rail transportation systems. Members of the community are many times also their customers. In return for these benefits, a company is expected to get involved in making the community a better place for everyone. Companies use their media visibility to make people aware of social needs or causes the company's management believes are especially worthy. They can encourage their employees to volunteer to serve in charitable capacities, or better yet provide paid time off for employees to do so.

Companies make direct contributions to charities but also get others involved in such ways as matching donations made by their customers. Not just large corporations recognize their charitable responsibility. Many small businesses, for example, support school or youth activities such as sponsoring sports teams. A large corporation might make a multimillion-dollar donation to support an art museum. A smaller company might be a sponsor of the local community theater. In either case, without corporate support these charitable organizations might not have sufficient funding to reach their goals.

Good environmental stewardship can help a company avoid damaging publicity -- or even lawsuits and government fines -- brought on by issues such as dumping hazardous waste in lakes or rivers. Companies that take their social responsibility seriously are viewed by everyone as better corporate citizens. They may receive media recognition for their good works, which can pay dividends such as increasing customer loyalty and enabling them to hire the highest-quality employees available. Efforts to help society can also be of interest to investors. Some companies even discuss their charitable and civic contributions in the annual report they send to their shareholders. The Hershey Co., famous for its chocolate products, even issues a special report that shows the corporate responsibility goals the company set for the year and measures its performance vs. these goals. One of Hershey's goals in 2009 was water conservation -- to reduce the company's water use by 15 percent by 2011. Employee morale can be higher in civic-minded companies because everyone who works there feels a part of the good works the company attempts to do.


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