{"id":60,"date":"2021-05-09T21:44:09","date_gmt":"2021-05-10T01:44:09","guid":{"rendered":"https:\/\/pressbooks.library.upei.ca\/socialentrepreneurshipsustainabilitycanada\/chapter\/2-3-managing-a-socially-responsible-business-introduction-to-business-openstax\/"},"modified":"2021-08-20T23:19:26","modified_gmt":"2021-08-21T03:19:26","slug":"2-3-managing-a-socially-responsible-business-introduction-to-business-openstax","status":"publish","type":"chapter","link":"https:\/\/pressbooks.library.upei.ca\/socialentrepreneurshipsustainabilitycanada\/chapter\/2-3-managing-a-socially-responsible-business-introduction-to-business-openstax\/","title":{"raw":"Managing a Socially Responsible Business","rendered":"Managing a Socially Responsible Business"},"content":{"raw":"
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Introduction to Business<\/span><\/a> by OpenStax and is licensed under a Creative Commons Attribution 4.0 International License<\/span><\/a>, except where otherwise noted. Edited by Matthew Pauley. Written by: Lawrence J. Gitman, Carl McDaniel, Amit Shah, Monique Reece, Linda Koffel, Bethann Talsma, James C. Hyatt<\/span>.<\/div>\r\n<\/div>\r\n
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What is corporate social responsibility?<\/span><\/h2>\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n
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Acting ethically is one of the four components of the pyramid of corporate social responsibility (CSR)<\/span>,<\/strong> which is the concern of businesses for the welfare of society. It comprises obligations beyond those required by law or union contract. This definition makes two important points. First, CSR is voluntary. Beneficial action required by law, such as cleaning up factories that are polluting air and water, is not voluntary. Second, the obligations of corporate social responsibility are broad. They extend beyond investors in the company to include workers, suppliers, consumers, communities, and society at large.<\/p>\r\n

Figure 1 (see below) portrays economic responsibility as the foundation for the other three responsibilities. At the same time that a business pursues profits (economic responsibility), however, we expect it to obey the law (legal responsibility); to do what is right, just, and fair (ethical responsibility); and to be a good corporate citizen (philanthropic responsibility). These four components are distinct but together make up the whole. Still, if the company doesn\u2019t make a profit, then the other three responsibilities won\u2019t matter.<\/p>\r\n

Many companies continue to work hard to make the world a better place to live. Recent data suggests that Fortune 500 companies spend more than $15 billion annually on CSR activities. Consider the following examples:<\/p>\r\n\r\n