What is Social Responsibility?

According to social responsibility, the business or the owner of a company should behave in such a way that to achieve the goal of making more profit out of the business, it should not cause any kind of loss or, harm or damage to society. The business should always look after their social responsibility which will not only benefit them but also the consumer living in the society.  

What is the Socio-Economic Model of Social Responsibility?

• The socio-economic model of social responsibility demonstrates that a business should not only focus or concentrate upon what kind of profit it is making or how will it make more profit in the future but also look after the effect that it is causing on society from time to time. Primarily it should look upon that how the functioning of that company or the business is causing benefit to the society or is it causing loss to the society.   

• In other words, it can be said that this socio-economic model of social responsibility focuses not only on the profit-making motive of the business but thinks that in what way the company can benefit the society with its functioning which can be socially beneficial for everyone.  

• It also takes into consideration that how the standard of living of the society can be improved through its functioning. But it is also important to keep in mind that ethical ways of business should be maintained to maximize profit or even to improve the standard of living. 

What is an Economic Model of Social Responsibility?

• On the other hand, the economic model of social responsibility focuses only on how the business can introduce or initiate the production of profitable products that society requires for its benefit. It also emphasizes on the manufacturing of products which are also called profitable goods for society. The economic model of social responsibility includes decisions that will only help the company to make a profit in the long run.  

• Therefore, it can be said that the socio-economic model of social responsibility is an amalgamation of the economic model as well as the social responsibility which comes together to ultimately bring the profitability of the business and also the social benefit which will help the people to improve their standard of living from time to time. 

Not only the socio-economic model helps the society to get certain benefits but also the consumer of the society, some way or the other witnesses an improved standard of living. Benefiting society socially is important for the business so that it can sustain itself in the long run along with its competitors. Every society has some social issues but it is the social responsibility of the business to solve those issues ethically.  

Since the socio-economic model of social responsibility is a mixture of social responsibility and economic model certain advantages come with it and also some disadvantages do prevail in the model.  

Merits of the Socio-Economic Model of Social Responsibility:

• The first and the foremost merit of following the socio-economic model of social responsibility by a business is that the relations between the public and the business get improved because the business now takes upon the social responsibility of solving social issues and benefiting society as a whole. For this reason, the public or the people of the society will be more comfortable towards buying the products of that specific company which has taken the social responsibility of not only to maximize their profit but also to improve the standard of living of the people residing in that particular society.  

• There is some kind of positivity that is felt by the owner of the business or company as because firstly it is helping the society as a whole which is bringing people closer to the business and also making a positive impact which helps the business to prosper the future or in long-term and also compete in the industry. This in turn improves the reputation of the business or the company.  

Demerits of the Socio-Economic Model of Social Responsibility: 

• The biggest disadvantage of following the socio-economic model of social responsibility is that the government takes an active part in intervening in the business. This is because since the business or the company has taken up the social responsibility which will socially benefit  society, it is the right of the government to intervene in such cases. Afterall the government is responsible for the benefit of the public as well. Therefore the freedom of taking decisions or decision-making is reduced when it comes to the fact of government intervention in the business.  

• Since it is seen that the business not only looks after the profit of its own but also social benefits of the society, there is a part of the profit that the company needs to give away to be a part of the social responsibility by helping people to get an improved standard of living. Therefore, in this case, it can be said that though the company tries to maximize its profit there is always a scope of reduction in profit because it is helping the society to grow by solving social problems and also bring a major social change.  

Key Takeaways

• herefore, it can be said that the business decisions are to be taken under the business model of the socio-economic model of social responsibilities as because it not only takes into consideration the benefit that it does socially but also takes into account what kind of environmental impact does it cause by its functioning.   

• The positive impact that is done by the company or the business socially, has to maintain some ethical norms which will ultimately help the consumer residing in an economy or society to have a better standard of living and ultimately solving social problems.   

• The concept of social responsibility and the economic model of social responsibility are intertwined in such a way that helps to determine the corporate responsibility of a company that works on maximizing the business profit and also bringing some socially positive changes.  

Context and Applications:

This topic is significant in the professional exams for both undergraduate and graduate courses, especially for       

• Bachelors of Business Administration
• Bachelor of Commerce
• Master of Commerce
• MBA/PGDM