Social Responsibility Practices of Business Organizations: Bangladesh Perspective

Abstract

In recent years, popular theories such as ‘stakeholder theory’ and ‘legitimacy theory’ have emphasized the importance of the ‘social responsibilities of businesses’ in a greater way. These theories are based on the argument that, apart from pursuing the profit-maximizing objective, organizations need to be responsible for their activities in society. Further, the continued operation and success of business activities are dependent on compliance with societal expectations and gaining support for continued existence in society.¹ Stakeholder theory argues that corporations should be accountable not only to shareholders but also to other stakeholder groups, such as employees, consumers, the government, suppliers, interest groups and the public. In general, a stakeholder can be defined as any group or individual who can affect or is affected by the achievement of the firm’s objectives.² It has been said that:

…social responsibility activities are useful in developing and maintaining satisfactory relationships with stockholders, creditors and political bodies. Developing a corporate reputation as being socially responsible through performing and disclosing social responsibility activities is part of a strategy for maintaining stakeholder relationships.³