You are required to do a review on the article given. Your review will consists of: 1. Introduction 2. Review of the article 3. Criticism/opinion 4. Conclusion
You are required to do a review on the article given. Your review will consists of: 1. Introduction 2. Review of the article 3. Criticism/opinion 4. Conclusion
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
Related questions
Question
You are required to do a review on the article given. Your review will consists of:
1. Introduction
2. Review of the article
3. Criticism/opinion
4. Conclusion
![H3
ГОДИНА 1, БР. 4,ОКТОМВРИ - ДЕКЕМВРИ 2012
cultural development, i.e. for subsidizing the work
of artists, organizing exhibitions, etc.
3) Social services program
In the economically developed countries (IBM-
USA) the companies help non-governmental
organizations and support their retired employees
[5]. What is more, the company management
provides fully for all their living expenses. This is
a good practice which for the time being may be
applied only to a certain extent.
4) University support program
The purpose of this program is to provide
(permanent) support for the higher education by
purchasing (providing) advanced technological
equipment, granting yearly scholarships to
excelling students and scholars, providing
financial support to university lecturers to
enhance their qualifications at leading institutes.
and organizations. Hiring tutors to conduct
refresher courses and specializations. Introducing
advantage criteria for the employment of young
university graduates. Sending children with
disabilities to study at specialized university
centres.
5) Funds supporting regional organizations
The companies may implement programs to
support organizations that provide services to
their employees. A company may establish a fund
to help enhance the use of services provided by
these organizations and some material resources
of the company. Such fund can be used in good
support to education (nurseries and kindergartens,
vocational schools and universities).
6) Fund to help the training of disabled people
The purpose of the fund is to provide financial
support to groups of disabled people to help with
their training which takes place in training
centers. It can offer also material assistance, such
as purchasing of computers, to help introduce IT
technologies in education.
IV. ETHICS AND CONTEMPORARY
MANAGEMENT
The main challenges facing social responsibility
are the personal qualities of the members of the
organisation and their perception of right and
wrong. Individuals who believe that "the
organisation has to maximize profits in
compliance with the legal regulations" consider
profitability, effectiveness and strict observance
of the laws to be of primary importance and place
insufficient value to the altruism. They believe
that an organisation is well managed and socially
responsible as long as its activities follow certain
values. To be able to make the right choice of
behaviour an individual should be first acquainted
with the notion of ethics. Ethics is built on certain
70
НОВО ЗНАНИЕ
principles based on the concept of right and
wrong behaviour.
Ethics in business does not relate merely to the
idea of socially responsible behaviour. It
encompasses a wider range of behavioural
decisions for both managers and employees.
The managers of an organisation must exercise
dynamic decision making while respecting the
necessary balance between the business interests
of the organisation and the behavioural limits,
deemed unacceptable by the society [7].
The ethical business problems relate to the
conflict [8] or to a lesser degree to the probability
of such a conflict, between the financial
performance of the organisation, revenues,
expenses and profit and the social responsibility.
performance, expressed through the obligation of
the organisation towards its members and society.
A modern approach to increase social
responsibility performance is to train the
organisation's managers and other responsible
employees how to handle ethical issues which
they encounter in their daily work. Ethics could
be also taught at universities thus creating an
initial understanding of its related issues.
Organisations are undertaking various measures
and decisions, such as specialized training
sessions, to form the ethical norms of behaviour
of their managers and employees.
The ethical norms of an organization represent a
system of shared values and ethical rules, which
should be observed by each employee. Their
purpose is to describe the goals of the
organization, to create a healthy ethical
environment and to determine the ethical
guidelines for decision making. The management
of IBM states that the company expects from each
employee in every situation to act in accordance
with the business standards.
Business ethics are of utmost importance in
international relations as well. It is obvious, that
while acting in their own interests, multi-national
companies must also consider their role as
intermediaries for the exchange of economic and
social development. As such companies tend to
have a lasting impact on parties they engage with
during their business activities, the ethical issues.
should become an important element of the
overall planning of their organization.
The ethical standards are different in the different
countries. The ethics do not have a "maximum
limit". Multinational companies would typically
have a sophisticated organization of the business
and production activities and, in most cases, a
high level of ethical behaviour and control. The
focus of organizations on ethics is expected to
ИЗДАНИЕ НА ВИСШЕ УЧИЛИЩЕ ПО АГРОБИЗНЕС И РАЗВИТИЕ НА РЕГИОНИТЕ
И
NEW KNOWLEDGE
increase with the growth of the economic wealth
of its employees and the society.
V. GENERAL RECOMMENDATIONS
(CONCLUDING REMARKS)
At present, an opinion is being formed and
adopted in our country (and the countries of the
former socialist camp) that organizations should
allocate part of their financial resources and
efforts to support local communities in which they
operate, and the society as a whole. As pointed
out by Lee Preston in [2], "An organization
cannot operate responsibly for a long time while
being in conflict with its environment."
In order to be successful, the organization must be
able to adapt and respond to problems arising in
the social environment so as to make this
environment more favorable to the organization.
Expenditure on social responsibility is justified
also by the fact that it contributes to improving
various segments of society, as well as improving
the public's attitude toward the company.
This has to be associated with higher consumer
loyalty to product manufacturers and hence lead
to general improvement of the condition of
society.
The presented good practices do not apply to the
social behavior of large organizations. All other
small businesses and organizations such as
schools, universities and hospitals, are socially
responsible.
It should be noted, however, that the main
purpose of an industrial enterprise is to secure
wages for the employees who earn their living by
working in it, and only afterwards to attend to the
problems of society. If it is not able to conduct
business at a profit, the question of social
responsibility remains primarily in the academic
sense.
Nevertheless, an organization should conduct its
affairs so as to be consistent with public
expectations. In other words, the social
responsibility of a company means more than just
philanthropy. Naturally, the organization acts
responsibly and in accordance with the concerns
and hopes of the general public.
In conclusion, the following paraphrase of a
statement in book [6] can be expressed: "The
company management is obliged to use all their
talents to achieve maximum profit and growth.
But the enlightened self-interest of the company
requires it to fulfill every reasonable expectation
towards it by the community and the various
public circles concemed. Open recognition of
priorities and socially responsible behavior of the
company ensure the achievement of important
secondary targets. Profitability and expansion go
hand in hand with fair treatment of employees, of
consumers at all levels, and of the local
community.
VI. CONCLUSIONS
1. There are two main points of view on
social responsibility. According to the first one -
an organisation is socially responsible as long as it
maximizes its shareholders' profits while strictly
observing the legal framework of the country.
According to the second point of view-while the
management of the organisation must adequately
react to the economic situation in the country,
they should also observe and be responsible for
the humanitarian and social effect of the
organisations' business on the employees,
consumers and social communities. Both points of
view agree that the organisation should have a
positive effect on society.
2. The legal responsibility, unlike the social
one, requires adherence to specific laws and
regulations, which prescribe the activities that the
organisation may or may not perform. The social.
responsibility, on the other side, is to a certain
degree a voluntarily reaction to specific social
events.
3. There are a number of Pro's and Con's to
social responsibility.
4.
5.
Certain organisations have developed and
are executing social responsibility programmes.
Managers are using a number of
programmes and methods, as well as role models
for ethical behaviour to improve the ethical
standards in their organisations.
6. Organisations can take a number of steps
to stimulate ethical behaviour of their employees.
REFERENCES
Keith Davis and William C Frederick,
Business in Society, 5th ed., McGraw Hill,New York,
1984, p. 27.
Lee E. Preston, Social Issues in Public Policy
[2]
in Business and Management: Retrospect and
Prospect, College Park; University of Maryland Press,
1986
[3] Howard R. Bowen, Social Responsibilities of
the Businessman, Harper & Row, New York, 1953
[4] Neil Jacoby, Corporate Power and Social
Responsibility, Macmillan, New York, 1973
[5]
IBM: About Your Company, Armonk, N.Y.,
1984, pp. 170-171.
[6]
Edward G. Harness, Corporate Ethics Digest,
September-October 1980.
[7] Steven N. Brenner and E. A. Molander, «Is
the Ethics of Business Changing?»> Harvard Business
Review, January-February 1977, pp. 57-71.
[8] www.man-world.info/content/view/261/93/
UNIVERSITY OF AGRIBUSINESS AND RURAL DEVELOPMENT EDITION
71
ISSN: 1314-5703](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fafbd35f5-4485-4cb1-8e32-18c7752cc0af%2F0b20f887-5b22-4e68-8da7-8787350591fe%2Fmshj4dp_processed.png&w=3840&q=75)
Transcribed Image Text:H3
ГОДИНА 1, БР. 4,ОКТОМВРИ - ДЕКЕМВРИ 2012
cultural development, i.e. for subsidizing the work
of artists, organizing exhibitions, etc.
3) Social services program
In the economically developed countries (IBM-
USA) the companies help non-governmental
organizations and support their retired employees
[5]. What is more, the company management
provides fully for all their living expenses. This is
a good practice which for the time being may be
applied only to a certain extent.
4) University support program
The purpose of this program is to provide
(permanent) support for the higher education by
purchasing (providing) advanced technological
equipment, granting yearly scholarships to
excelling students and scholars, providing
financial support to university lecturers to
enhance their qualifications at leading institutes.
and organizations. Hiring tutors to conduct
refresher courses and specializations. Introducing
advantage criteria for the employment of young
university graduates. Sending children with
disabilities to study at specialized university
centres.
5) Funds supporting regional organizations
The companies may implement programs to
support organizations that provide services to
their employees. A company may establish a fund
to help enhance the use of services provided by
these organizations and some material resources
of the company. Such fund can be used in good
support to education (nurseries and kindergartens,
vocational schools and universities).
6) Fund to help the training of disabled people
The purpose of the fund is to provide financial
support to groups of disabled people to help with
their training which takes place in training
centers. It can offer also material assistance, such
as purchasing of computers, to help introduce IT
technologies in education.
IV. ETHICS AND CONTEMPORARY
MANAGEMENT
The main challenges facing social responsibility
are the personal qualities of the members of the
organisation and their perception of right and
wrong. Individuals who believe that "the
organisation has to maximize profits in
compliance with the legal regulations" consider
profitability, effectiveness and strict observance
of the laws to be of primary importance and place
insufficient value to the altruism. They believe
that an organisation is well managed and socially
responsible as long as its activities follow certain
values. To be able to make the right choice of
behaviour an individual should be first acquainted
with the notion of ethics. Ethics is built on certain
70
НОВО ЗНАНИЕ
principles based on the concept of right and
wrong behaviour.
Ethics in business does not relate merely to the
idea of socially responsible behaviour. It
encompasses a wider range of behavioural
decisions for both managers and employees.
The managers of an organisation must exercise
dynamic decision making while respecting the
necessary balance between the business interests
of the organisation and the behavioural limits,
deemed unacceptable by the society [7].
The ethical business problems relate to the
conflict [8] or to a lesser degree to the probability
of such a conflict, between the financial
performance of the organisation, revenues,
expenses and profit and the social responsibility.
performance, expressed through the obligation of
the organisation towards its members and society.
A modern approach to increase social
responsibility performance is to train the
organisation's managers and other responsible
employees how to handle ethical issues which
they encounter in their daily work. Ethics could
be also taught at universities thus creating an
initial understanding of its related issues.
Organisations are undertaking various measures
and decisions, such as specialized training
sessions, to form the ethical norms of behaviour
of their managers and employees.
The ethical norms of an organization represent a
system of shared values and ethical rules, which
should be observed by each employee. Their
purpose is to describe the goals of the
organization, to create a healthy ethical
environment and to determine the ethical
guidelines for decision making. The management
of IBM states that the company expects from each
employee in every situation to act in accordance
with the business standards.
Business ethics are of utmost importance in
international relations as well. It is obvious, that
while acting in their own interests, multi-national
companies must also consider their role as
intermediaries for the exchange of economic and
social development. As such companies tend to
have a lasting impact on parties they engage with
during their business activities, the ethical issues.
should become an important element of the
overall planning of their organization.
The ethical standards are different in the different
countries. The ethics do not have a "maximum
limit". Multinational companies would typically
have a sophisticated organization of the business
and production activities and, in most cases, a
high level of ethical behaviour and control. The
focus of organizations on ethics is expected to
ИЗДАНИЕ НА ВИСШЕ УЧИЛИЩЕ ПО АГРОБИЗНЕС И РАЗВИТИЕ НА РЕГИОНИТЕ
И
NEW KNOWLEDGE
increase with the growth of the economic wealth
of its employees and the society.
V. GENERAL RECOMMENDATIONS
(CONCLUDING REMARKS)
At present, an opinion is being formed and
adopted in our country (and the countries of the
former socialist camp) that organizations should
allocate part of their financial resources and
efforts to support local communities in which they
operate, and the society as a whole. As pointed
out by Lee Preston in [2], "An organization
cannot operate responsibly for a long time while
being in conflict with its environment."
In order to be successful, the organization must be
able to adapt and respond to problems arising in
the social environment so as to make this
environment more favorable to the organization.
Expenditure on social responsibility is justified
also by the fact that it contributes to improving
various segments of society, as well as improving
the public's attitude toward the company.
This has to be associated with higher consumer
loyalty to product manufacturers and hence lead
to general improvement of the condition of
society.
The presented good practices do not apply to the
social behavior of large organizations. All other
small businesses and organizations such as
schools, universities and hospitals, are socially
responsible.
It should be noted, however, that the main
purpose of an industrial enterprise is to secure
wages for the employees who earn their living by
working in it, and only afterwards to attend to the
problems of society. If it is not able to conduct
business at a profit, the question of social
responsibility remains primarily in the academic
sense.
Nevertheless, an organization should conduct its
affairs so as to be consistent with public
expectations. In other words, the social
responsibility of a company means more than just
philanthropy. Naturally, the organization acts
responsibly and in accordance with the concerns
and hopes of the general public.
In conclusion, the following paraphrase of a
statement in book [6] can be expressed: "The
company management is obliged to use all their
talents to achieve maximum profit and growth.
But the enlightened self-interest of the company
requires it to fulfill every reasonable expectation
towards it by the community and the various
public circles concemed. Open recognition of
priorities and socially responsible behavior of the
company ensure the achievement of important
secondary targets. Profitability and expansion go
hand in hand with fair treatment of employees, of
consumers at all levels, and of the local
community.
VI. CONCLUSIONS
1. There are two main points of view on
social responsibility. According to the first one -
an organisation is socially responsible as long as it
maximizes its shareholders' profits while strictly
observing the legal framework of the country.
According to the second point of view-while the
management of the organisation must adequately
react to the economic situation in the country,
they should also observe and be responsible for
the humanitarian and social effect of the
organisations' business on the employees,
consumers and social communities. Both points of
view agree that the organisation should have a
positive effect on society.
2. The legal responsibility, unlike the social
one, requires adherence to specific laws and
regulations, which prescribe the activities that the
organisation may or may not perform. The social.
responsibility, on the other side, is to a certain
degree a voluntarily reaction to specific social
events.
3. There are a number of Pro's and Con's to
social responsibility.
4.
5.
Certain organisations have developed and
are executing social responsibility programmes.
Managers are using a number of
programmes and methods, as well as role models
for ethical behaviour to improve the ethical
standards in their organisations.
6. Organisations can take a number of steps
to stimulate ethical behaviour of their employees.
REFERENCES
Keith Davis and William C Frederick,
Business in Society, 5th ed., McGraw Hill,New York,
1984, p. 27.
Lee E. Preston, Social Issues in Public Policy
[2]
in Business and Management: Retrospect and
Prospect, College Park; University of Maryland Press,
1986
[3] Howard R. Bowen, Social Responsibilities of
the Businessman, Harper & Row, New York, 1953
[4] Neil Jacoby, Corporate Power and Social
Responsibility, Macmillan, New York, 1973
[5]
IBM: About Your Company, Armonk, N.Y.,
1984, pp. 170-171.
[6]
Edward G. Harness, Corporate Ethics Digest,
September-October 1980.
[7] Steven N. Brenner and E. A. Molander, «Is
the Ethics of Business Changing?»> Harvard Business
Review, January-February 1977, pp. 57-71.
[8] www.man-world.info/content/view/261/93/
UNIVERSITY OF AGRIBUSINESS AND RURAL DEVELOPMENT EDITION
71
ISSN: 1314-5703
![H3
ГОДИНА 1, БР. 4, ОКТОМВРИ - ДЕКЕМВРИ 2012
THE ROLE OF BUSINESS IN SOCIETY
Резюме
Статията разглежда основните въпроси,
свързани с мястото и ролята на организациите
ΠΟ отношение на Тяхната
социална
отговорност към обществото днес. Отделя се
сыщо внимание на Тяхната нагласа към
корпоративните служители, определени групи
от хора или обществото като цяло.
VENELIN TERZIEV
UNIVERSITY OF AGRIBUSINESS AND RURAL DEVELOPMENT
Abstract
The article reviews the main issues relating to the
place and role of organizations in terms of their
social responsibility to society today. Attention is
also placed on their social attitude towards
corporate employees, particular groups of people,
or society as a whole.
Key words:
business,
responsibility, support
1. INTRODUCTION 2
The concept of the social role of business was
placed in focus in the 50s of the twentieth century
[1]. This was partly due to the development of
cooperation between business and the
governments of the industrial countries during the
Second World War and later, in the years of the
"Cold War". During this period, the Committee
for Economic Development was established,
which included the most prominent.
representatives of the business world. The main
purpose of the Committee was to advise the
governments on economic and commercial issues.
Its importance, however, proved to be essential,
because in this way it helped extend the
participation of the business world in addressing
issues of social and governmental policy.
*Corresponding author:
Rousse, Bulgaria, 6, Otetz Paisii Street
Tel.: +359 82 820980;
68
It was also in the 50s of the twentieth century
when the first thorough work on the subject [3]
appeared, written by Howard Bowen. In the book,
he discussed the concept of social responsibility
that can be applied in business. Awareness of
broader social objectives in the process of
Fax: +359 82 820982;
E-mail addresses: terziev@skmat.com
society, social
НОВО ЗНАНИЕ
business decision-making can bring social and
economic benefits to society.
The debate about the role of business in society
was sparked by the events during the 1960s and
1970s. Jacoby [4] argues that a serious opposition
emerges in the public opinion against the business
world. In different spheres of society a live
interest arises in problems such as civil rights, the
wars, women's equality, industrial pollution of the
environment and the condition of our living
surroundings as a whole, as well as the laws on
consumer rights protection introduced by
J.F. Kennedy in 1962. During the 1970s and
1980s of the XX century, in the centre of attention
are the problems related to disamament, nuclear
power utilization, saving peoples in the Third
World from starvation.
II. LEGAL AND SOCIAL RESPONSIBILITY
OF THE ORGANIZATION
Social expectations towards business have
changed over the years, and these changes have
turn entailed changes of the opinion of society
about the role of business. Most important in the
process of social evaluation is that distinction is
made between legal and social responsibility of
organizations. Legal responsibility refers to
observance of state laws and of applicable
statutory regulations relating to a specific business
that define what the organization is allowed or not
allowed to do. The organization acting in
compliance with all statutory requirements.
conducts its business in a legally responsible
manner, but this does not necessarily mean it is
socially responsible as well. Social responsibility,
as opposed to legal responsibility, implies a
certain level of voluntary response to the social
problems of the society.
Arguments in favour of and against social
responsibility
Disputes about the role of business in society have
given rise to numerous arguments in favour of and
against its social responsibility [2].
A) Arguments supporting social responsibility
1. Long-term growth perspectives favourable for
the business. The social activities of a company
that improve the living standard of the local.
community or eliminate the need for state
ИЗДАНИЕ НА ВИСШЕ УЧИЛИЩЕ ПО АГРОБИЗНЕС И РАЗВИТИЕ НА РЕГИОНИТЕ
NEW KNOWLEDGE
regulation could be also in its own interest and
contribute to the company's stability in society.
Moreover, sizeable social allowances can, in the
long term, stimulate development and profit
growth, as consumers, suppliers, and the local
community, create a more attractive image of the
organization.
are
2. Changing needs and expectations of buyers.
Business-related social expectations
constantly changing. To narrow the gap between
new expectations and the actual response of
companies, their involvement in solving social
issues becomes an important and necessary task.
3. Availability of resources for rendering
assistance in solving social issues. Essentially,
business has at its disposal human and financial
resources and is expected to make part of these
available for use for social purposes.
4. The moral obligation to behave socially
responsible. A company is a member of society
and therefore must abide by ethic norms that
control its conduct. In other words, the company,
like each individual member of the public, must
act in a socially responsible manner and
contribute to strengthening the moral principles of
society. Furthermore, regulations are not always
sufficient to provide a solution for every case, and
the organization must behave in a responsible
manner to maintain public order and establish
better relations between its members.
B) Arguments against social responsibility
1. Violation of the principle of profit
maximization. The part of the resources allocated
for social needs influences the achievement of
profit maximization. The company does its best to
act a socially responsible one, but first and
foremost it focuses on achieving its economic
interests, leaving social issues to public
institutions and agencies to deal with.
2. Expenses for social security contributions.
These funds are regulated by the government
authorities but ultimately reflect on consumers in
the form of higher prices.
3. Lack of operational transparency to the public.
Most often company managers fail to realize that
they are to a certain extent accountable to the
public, to some of its circles. The market
economic system has a good control over the
economic indicators of the company's standing.
and performance in the market but poorly controls
its social responsibility to the public as a whole or
to particular social groups. Here of utmost
importance is the role of society and its
organizations in establishing moral principles and
obligations and involving public authorities and
businesses in certain social activities that they
otherwise find irrelevant and disregard, without
assuming any responsibility to the public.
4. Insufficient knowledge or skills to solve social
issues. Any company's staff is generally well
prepared to work in the field of economics,
marketing and technology. However, they lack
experience that would allow them to contribute to
finding solutions to social issues concerning the
staff members themselves as well as the society as
a whole. In this regard, the improvement of the
level of social responsibility requires the society
to produce experts who, when appointed at the
respective governmental positions or in charitable
organizations, will be able to work for problem.
solving in the social sphere.
III GOOD PRACTICES OF SOCIAL
RESPONSIBILITY
Studies carried out by foreign authors the
standpoint company managements take about
corporate social responsibility reveal a positive
trend towards enhanced responsibility. Managers.
having participated in the research believe that the
pressure for increasing the social responsibility of
business is real, is of substantial importance, and
will continue its upward trend. Other studies
indicate that representatives of company
managements are involved in the work of various
NGOs and their bodies that deal with the issue of
social responsibility to society.
Among the most substantial obstacles in
developing programs related to social
responsibility are the demands raised by
employees (managers and workers) of the
company for an increase of their income
(salaries). The ambition for a rapid increase in
profits and income forces the company
management to walk away from allocating part of
company resources for programs focused on the
social responsibility to society.
1) Educational level improvement programs
To support people's motivation to pursue
improvement of their education, the companies
may distribute subsidies for further training and
re-qualification in various educational institutions.
In such way additional subsidies are granted to
training organizations whose primary function is
to provide quality education to their students.
2) Subsidy programs for hospitals and cultural
institutions
Within the framework of this program, the
organization signs bilateral agreements with
hospitals for carrying out complete medical
examinations of employees and additional
examinations as needed. Where such possibility
exists, the company allocates funds to support
UNIVERSITY OF AGRIBUSINESS AND RURAL DEVELOPMENT EDITION
69
ISSN: 1314-5703](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fafbd35f5-4485-4cb1-8e32-18c7752cc0af%2F0b20f887-5b22-4e68-8da7-8787350591fe%2Ft4ej9ak_processed.png&w=3840&q=75)
Transcribed Image Text:H3
ГОДИНА 1, БР. 4, ОКТОМВРИ - ДЕКЕМВРИ 2012
THE ROLE OF BUSINESS IN SOCIETY
Резюме
Статията разглежда основните въпроси,
свързани с мястото и ролята на организациите
ΠΟ отношение на Тяхната
социална
отговорност към обществото днес. Отделя се
сыщо внимание на Тяхната нагласа към
корпоративните служители, определени групи
от хора или обществото като цяло.
VENELIN TERZIEV
UNIVERSITY OF AGRIBUSINESS AND RURAL DEVELOPMENT
Abstract
The article reviews the main issues relating to the
place and role of organizations in terms of their
social responsibility to society today. Attention is
also placed on their social attitude towards
corporate employees, particular groups of people,
or society as a whole.
Key words:
business,
responsibility, support
1. INTRODUCTION 2
The concept of the social role of business was
placed in focus in the 50s of the twentieth century
[1]. This was partly due to the development of
cooperation between business and the
governments of the industrial countries during the
Second World War and later, in the years of the
"Cold War". During this period, the Committee
for Economic Development was established,
which included the most prominent.
representatives of the business world. The main
purpose of the Committee was to advise the
governments on economic and commercial issues.
Its importance, however, proved to be essential,
because in this way it helped extend the
participation of the business world in addressing
issues of social and governmental policy.
*Corresponding author:
Rousse, Bulgaria, 6, Otetz Paisii Street
Tel.: +359 82 820980;
68
It was also in the 50s of the twentieth century
when the first thorough work on the subject [3]
appeared, written by Howard Bowen. In the book,
he discussed the concept of social responsibility
that can be applied in business. Awareness of
broader social objectives in the process of
Fax: +359 82 820982;
E-mail addresses: terziev@skmat.com
society, social
НОВО ЗНАНИЕ
business decision-making can bring social and
economic benefits to society.
The debate about the role of business in society
was sparked by the events during the 1960s and
1970s. Jacoby [4] argues that a serious opposition
emerges in the public opinion against the business
world. In different spheres of society a live
interest arises in problems such as civil rights, the
wars, women's equality, industrial pollution of the
environment and the condition of our living
surroundings as a whole, as well as the laws on
consumer rights protection introduced by
J.F. Kennedy in 1962. During the 1970s and
1980s of the XX century, in the centre of attention
are the problems related to disamament, nuclear
power utilization, saving peoples in the Third
World from starvation.
II. LEGAL AND SOCIAL RESPONSIBILITY
OF THE ORGANIZATION
Social expectations towards business have
changed over the years, and these changes have
turn entailed changes of the opinion of society
about the role of business. Most important in the
process of social evaluation is that distinction is
made between legal and social responsibility of
organizations. Legal responsibility refers to
observance of state laws and of applicable
statutory regulations relating to a specific business
that define what the organization is allowed or not
allowed to do. The organization acting in
compliance with all statutory requirements.
conducts its business in a legally responsible
manner, but this does not necessarily mean it is
socially responsible as well. Social responsibility,
as opposed to legal responsibility, implies a
certain level of voluntary response to the social
problems of the society.
Arguments in favour of and against social
responsibility
Disputes about the role of business in society have
given rise to numerous arguments in favour of and
against its social responsibility [2].
A) Arguments supporting social responsibility
1. Long-term growth perspectives favourable for
the business. The social activities of a company
that improve the living standard of the local.
community or eliminate the need for state
ИЗДАНИЕ НА ВИСШЕ УЧИЛИЩЕ ПО АГРОБИЗНЕС И РАЗВИТИЕ НА РЕГИОНИТЕ
NEW KNOWLEDGE
regulation could be also in its own interest and
contribute to the company's stability in society.
Moreover, sizeable social allowances can, in the
long term, stimulate development and profit
growth, as consumers, suppliers, and the local
community, create a more attractive image of the
organization.
are
2. Changing needs and expectations of buyers.
Business-related social expectations
constantly changing. To narrow the gap between
new expectations and the actual response of
companies, their involvement in solving social
issues becomes an important and necessary task.
3. Availability of resources for rendering
assistance in solving social issues. Essentially,
business has at its disposal human and financial
resources and is expected to make part of these
available for use for social purposes.
4. The moral obligation to behave socially
responsible. A company is a member of society
and therefore must abide by ethic norms that
control its conduct. In other words, the company,
like each individual member of the public, must
act in a socially responsible manner and
contribute to strengthening the moral principles of
society. Furthermore, regulations are not always
sufficient to provide a solution for every case, and
the organization must behave in a responsible
manner to maintain public order and establish
better relations between its members.
B) Arguments against social responsibility
1. Violation of the principle of profit
maximization. The part of the resources allocated
for social needs influences the achievement of
profit maximization. The company does its best to
act a socially responsible one, but first and
foremost it focuses on achieving its economic
interests, leaving social issues to public
institutions and agencies to deal with.
2. Expenses for social security contributions.
These funds are regulated by the government
authorities but ultimately reflect on consumers in
the form of higher prices.
3. Lack of operational transparency to the public.
Most often company managers fail to realize that
they are to a certain extent accountable to the
public, to some of its circles. The market
economic system has a good control over the
economic indicators of the company's standing.
and performance in the market but poorly controls
its social responsibility to the public as a whole or
to particular social groups. Here of utmost
importance is the role of society and its
organizations in establishing moral principles and
obligations and involving public authorities and
businesses in certain social activities that they
otherwise find irrelevant and disregard, without
assuming any responsibility to the public.
4. Insufficient knowledge or skills to solve social
issues. Any company's staff is generally well
prepared to work in the field of economics,
marketing and technology. However, they lack
experience that would allow them to contribute to
finding solutions to social issues concerning the
staff members themselves as well as the society as
a whole. In this regard, the improvement of the
level of social responsibility requires the society
to produce experts who, when appointed at the
respective governmental positions or in charitable
organizations, will be able to work for problem.
solving in the social sphere.
III GOOD PRACTICES OF SOCIAL
RESPONSIBILITY
Studies carried out by foreign authors the
standpoint company managements take about
corporate social responsibility reveal a positive
trend towards enhanced responsibility. Managers.
having participated in the research believe that the
pressure for increasing the social responsibility of
business is real, is of substantial importance, and
will continue its upward trend. Other studies
indicate that representatives of company
managements are involved in the work of various
NGOs and their bodies that deal with the issue of
social responsibility to society.
Among the most substantial obstacles in
developing programs related to social
responsibility are the demands raised by
employees (managers and workers) of the
company for an increase of their income
(salaries). The ambition for a rapid increase in
profits and income forces the company
management to walk away from allocating part of
company resources for programs focused on the
social responsibility to society.
1) Educational level improvement programs
To support people's motivation to pursue
improvement of their education, the companies
may distribute subsidies for further training and
re-qualification in various educational institutions.
In such way additional subsidies are granted to
training organizations whose primary function is
to provide quality education to their students.
2) Subsidy programs for hospitals and cultural
institutions
Within the framework of this program, the
organization signs bilateral agreements with
hospitals for carrying out complete medical
examinations of employees and additional
examinations as needed. Where such possibility
exists, the company allocates funds to support
UNIVERSITY OF AGRIBUSINESS AND RURAL DEVELOPMENT EDITION
69
ISSN: 1314-5703
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