Social responsibility involves a set of obligations on the part of management to protect and enhance the society in which it functions. This means first that the social responsibility is an “obligation” for which the business should be held accountable.
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Second, it is the responsibility of business to protect the society welfare in terms of not polluting the environment, producing safe and quality products, not discriminating, not deceptively advertising and so on.
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Finally, it must enhance the society’s welfare by creating positive benefits for society such as supporting charitable causes, culture and arts, educational institutions and other community projects and programmes which improve the quality of life in general.
Over the years, both society and organizations have taken many different views of social responsibility. In particular, there have been three critical turning points in the evolution of social responsibility in the United States.
The first period, known as the entrepreneurial era occurred during the late 1800s, when such industry stalwarts as John D. Rockefeller, J.P. Morgan, and Andrew Carnegie were amassing fortunes and building financial power.
Unfortunately such power was misused through such practices as labour lockouts, discriminating pricing policies, kickbacks and so on. In response to such abuse of power, public outcry resulted in some laws being passed which regulated businesses and defined a relationship between business, government and society.
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The second turning point occurred during the depression era of 1930s. Most Americans blamed large corporations for irresponsible financial practices which they believed led to the stock market crash of 1929.
This resulted in more laws being passed for protecting social interests including the creating of Securities and Exchange Commission (SEC) in 1934 to protect investors and small businesses.
The third turning point came during the social era of 1960s and 1970s when dynamic social awareness and social unrest energised the public to examine the nation’s values, priorities and goals.
This era induced the government to take active role in regulating businesses such as tighter control on pollution, consumer warnings on products such as cigarettes, truth in lending and truth in advertising laws and so on. Many changes are still continuing.