Question

Social responsibility is an obligation whereby organizations should have to behave in ways that do not harm their customers, employees, other people or the environment. In a purely economic sense, this is counter-intuitive. Absent a real threat of financial harm, an organization has no incentive to behave in a socially responsible manner. To state it another way, if it increases the Company's cost but does not increase profits, why should a company behave in a socially responsible manner? Laws and regulations can compel organizations to act in socially responsible ways. Other than that, social responsibility is an ethical decision, consciously embraced by ownership and management. We have spent this quarter talking about the diversity of the consuming population. Can you discuss how this diversity, global and domestic, influences our expectations regarding organizational social responsibility? Think about the chapters on Perception, Personality, Learning, Attitudes, Family and Social Class, and Culture...... Be sure in your answer to consider consumer behavior. This means if you discuss employee treatment, tie it to consumers. For example, if you are concerned about the conditions under which a company produces products, you must also look at what consumers are willing to pay for products. If we are not willing to pay higher prices, what is a company supposed to do? To repeat, DO NOT discuss employee issues unless you tie these to consumer behavior. If you are going to argue that people purchase more from socially responsible companies than from non-socially responsible companies, please provide examples. What are the products in your life that you specifically buy because you approve of the company's behaviors and what are the products you do NOT buy because of the company's behavior? Why do you behave this way?

Answer 1

Diversity, global and domestic influences our expectations regarding organizational social responsibility in various ways. If the society is concerned about the collective good of the society and moral and ethical aspects are inculcated in the fabric of society than yes it is expected out of any organization in that society to owe certain kind of social responsibility. Also whether or not the organization makes profit or not is the issue of the management but the fact they deal with society at large makes them responsible for owing up certain value back to the society.

Consumer behavior influences the pricing of product and strategy of the company. Consumer are of varied nature as well as some will prefer the cheap products and the other are ready to pay higher for same product for a reputed or trusted brand. Again this trust is not created by simply selling the product at cheaper price but by the company’s long performance and the value it stands for.

When customers are not willing to pay higher, there cannot be anything that can be done but this is an exceptional and hypothetical case and even if such events occurs the company can always makeup its balance by incentivizing on other product choices.

To give a conclusion, the best example for that matter is the company called as SHELL. It deals in energy, fuel, renewable and nonrenewable energy business. However, the company brands most of its product as environment friendly that emits less pollution than any other competitor and also invests in social causes.

The price of fuel supplied by it generally cost higher to end consumer but it is evidenced that most of the consumers buys from shell respecting the trust and value that the company stands for. This is the long vision of the company to try to remain environment friendly and socially responsible.