Social responsibility identifies the impact of the company’s business and actions on the society as a whole. It assumes that the company has a responsibility not just to its stakeholders, but to the entirety of the society. Companies must be committed to the values of the society, they must be contributors to the environment and they must contribute to the economic and social goals of society -- people, planet, profits.
Corporate stakeholders expect companies to make a profit. In the past, profit maximization was at the top of a company’s goals. Now, however, contributing to the society as a whole encourages stakeholder and customer loyalty -- and increases profits. In the pursuit of maintaining competitive advantage in their market and industry, companies must at the same time seek to exploit efficiencies to eliminate waste.
Companies must respect the society's values and norms and operate consistently with the society’s expectations. Companies must recognize new ethical movements that the society adopts. Corporate goals must never overshadow the society’s ethical principles. Legal compliance is not enough, however. Corporations must act fairly, morally and respectfully.
In the legal component of social responsibility, companies must work within the law and the government. Companies must be aware of all local, state and federal regulations. Managers must stay current on legal issues so they can adapt operating procedures to comply with new laws. Goods producted must not harm consumers and must meet or exceed product safety requirements.
Companies must be philanthropic. Philanthropy can include charitable donations, fundraising, encouraging the staff to volunteer or adopting special projects. Fine arts and performing arts contributions are options for philanthropy. Public and private school assistance shows the company’s dedication to students and education. Projects that enhance the quality of life for the residents of a community show the company’s commitment to the society's quality of life.