Social responsibility is the idea that an entity needs to act in a way that balances its own gain with societal benefits. Entities include individuals as well as businesses. Companies do need to make a profit, but not at the expense of society or the environment. Businesses should use ethical decision-making practices to make responsible decisions and reduce the need for government involvement such as, for example, Environmental Protection Agency (EPA), which monitors business decisions and practices to prevent pollution.
The notion of social responsibility is far from new. Its roots are in economics and the writings of Andrew Carnegie (1835-1919), a Scottish-born businessman and founder of U.S. Steel. Carnegie's business philosophy was based on two principles: charity (the more fortunate should assist those who are less fortunate) and stewardship (the rich hold their money "in trust" for the rest of society, using it for any purpose society deems appropriate).
Milton Friedman (1912-2006), an American economist and Nobel Laureate, later advocated that corporations exist only to maximize profit and behave in their own best self-interest. He argued that corporations' attempts at social responsibility were "morally wrong," as social issues and concerns were best dealt with by government. In the last half century, highly publicized corporate behavior like the handling of the Exxon Valdez oil spill, the financial scandal of Enron, and the more recent subprime mortgage crisis has undermined trust in corporations. Social responsibility has taken on heightened importance as a way of building trust in relationships .
Oil Spill
Oil spills and other environmental disasters show the need for social responsibility.