The Social Responsibilities of Management

The Social Responsibilities of Management

The social responsibilities of management

A New York Times survey conducted to learn the ideas of fifty-two leading executives of the largest corporations about the social responsibilities of management is revealing. "The sampling found every executive who replied emphatic in expressing his belief that business had a social responsibility beyond providing quality goods and services to consumers."8 The respondents thought of themselves as "environmentalists"-administrators who must integrate their enterprises into society. George S. Moore, president of the First National City Bank, New York, put it this way:

Social responsibility is not an attitude that a 'business organization adopts in a fit of benevolence like a decision to hold a company picnic. Its social responsibility is, instead, inseparable from its response to the kind of world in which we live. For today's institutions-banking or business, public or private-cannot exist in modern society without reacting constructively to (1) the goals of society, and (2) the economic, technological, social and political forces that mould that society.9

The executives pointed out that a business enterprise must earn a profit to survive and grow, but none of them took the position that a firm should maximize profits. They believed that management cannot escape responsibility for balancing the interests of stockholders with those of other groups in society. As Lammot du Pont Copeland, president of Du Pont, said, "Management, it seems to me, must reach for a balanced solution within the framework of one unassailable precept: business is a means to an end for society and not an end in itself, and therefore business must act in concert with a broad public interest and serve objectives of mankind and society or it will not survive."0

Some evidences of socially responsible management are the participation by executives in political affairs, corporate support of educational institutions, various employee welfare measures, community relations programs, and intensified public relations campaigns. These activities are considered essential to safeguard the position of the corporation, and sometimes they are justified on this basis alone. "A prudent regard for all the interests that merge in making the business a going concern now and in the future is, in fact, the only way to protect and to augment shareholder equity.""

Social responsibility of management is not, however, merely a public relations gesture that has as its objective the protection of the firm's profit position. "Self-conscious dedication to social responsibility may have started as a purely defensive manoeuvre against strident attacks on big corporations and on the moral efficacy of the profit system. But defence alone no longer explains the motive.1112 There is a sincere desire on the part of responsible executives to gain the respect of the general public by utilizing their considerable power for the common good. The company is regarded as a multipurpose social institution, and the pursuit of profit is secondary in importance to the public interest.

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