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Social Responsibility and Organizational Ethics

SOCIAL RESPONSIVENESS
Social responsiveness is the degree of effectiveness and
efficiency an organization displays in pursuing its social
responsibilities. The greater the degree of effectives and
efficiency, the more socially responsive the organization is
said to be. The socially responsive organization that is
both effective and efficient meets its social responsibilities
without wasting organizational resources in the process.
Determining exactly which social responsibilities an
organization should pursue and then deciding how to
pursue them are perhaps the two most critical decision-
making aspects of maintaining a high level of social
responsiveness. That is, managers must decide whether
their organization should undertake the activities on its
own or acquire the help of outsiders with more expertise
in a specific area.
In addition to decision making, various approaches to
meeting social obligations are another determinant of an
organization’s level of social responsiveness. A desirable
and socially responsive approach to meeting social obliga-
tions involves the following:
• Incorporating social goals into the annual planning
process
• Seeking comparative industry norms for social pro-
grams
• Presenting reports to organization members, the
board of directors, and stockholders on progress in
Milton Friedman (1912– ) Economist Friedman, winner of social responsibility
the Nobel Prize in economics in 1976 and the Presidential
Medal of Freedom in 1988, in Washington, D.C., May 9, • Experimenting with different approaches for meas-
uring social performance
2002. © BROOKS KRAFT/CORBIS
• Attempting to measure the cost of social programs
as well as the return on social program investments

There are several methods of addressing managerial
Government Requirements. Federal law requires that approaches to meeting social obligations. Three of these
businesses perform certain socially responsible activities. are: (1) the social obligation approach, (2) the social
In fact, several government agencies have been established responsibility approach, and (3) the social responsiveness
and are maintained to develop such business-related legis- approach. Each of these approaches contains behaviors
lation and to make sure the laws are followed. The U.S. that reflect a somewhat different attitude with regard to
Environmental Protection Agency does indeed have the businesses performing social responsible activities. The
authority to require businesses to adhere to certain socially social obligation approach considers business as having
responsible environmental standards. Adherence to legis- primarily economic purposes and confines social respon-
lated social responsibilities represents the minimum per- sible activities mainly to conformance to existing laws.
formance standard that business leaders must achieve. The socially responsible approach sees business as having
Managers must ask themselves, however, how far beyond both economic and societal goals. The social responsive-
the minimum they should attempt to go. This difficult ness approach considers business as having both societal
and complicated question entails assessing the positive and economic goals as well as the obligation to anticipate
and negative outcomes of performing socially responsible upcoming social problems and to work actively to prevent
activities. An overarching principle is that business should their appearance.
pursue only those activities that contribute to the busi- Organizations characterized by attitudes and behav-
ness’s success while contributing positively to the welfare iors consistent with the social responsiveness approach
of society. generally are more socially responsive than organizations

674 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION