Social Responsibility

Abstract

Events and newsworthy matters in recent history—the Rio Summit on the preservation of the environment, the use of child labor by household-name companies, the rise of groups protesting against globalization, the events of September 11, 2001, in the USA, and the downfall of Enron leading to tens of thousands of job cuts—have led to debate about the ethics and social responsibility of firms across the world. How socially responsible should a firm be? Some groups, led by well-known economists, argue that the single purpose of a business is to generate profits and increase shareholder value; businesses, they believe, should not be involved in philanthropy. Others claim that social responsibility is one of a firm’s main paths to long-term sustainability.

“Prosperity, if not rooted in a solid morality, will provide the seeds of its own destruction.”

Sage, Order of the Knights of Malta, 16th century