Social responsibility is the theory that a company should build relationships with the society and the environment where it’s located.

This involves actively cultivating and valuing these relationships with society, consumers and even employees instead of just being consumed with maximizing profits.

Although critics have frequently argued that environment is not actually a business stakeholder, businesses have a duty to act in the best interest of both society and their environment. This is otherwise known as Corporate Social Responsibility (CSR).

Companies around the globe take different positions on this and we have broken then down into four approaches to CSR.


Companies that take an obstructionist stance to social responsibility normally attempt to defend their economic priorities by blocking any attempts to point out the lack of social responsibility.

Making profits is the most important aspect of their business and although they are proud of it, they will deny any wrongdoing and use any obstacles available to them to deliberately derail or divert investigation of their practices when faced with specific social demands.


Companies that take the defensive approach to social responsibility aren’t socially responsible but they do a somewhat good job of hiding it.

Making profits is way more important to them than performing socially responsible actions.

They consider themselves neutral hence social responsibility isn’t a topic you can openly take up with them.

These companies make a point of following the law to ensure that others cannot take legal action against them. This does not mean that they do not perform actions that are detrimental to both society and the environment, they just look for legal ways of protecting themselves from lawsuits.


Companies that take this approach actually believe that social responsibility is just as important as making a profit.

They satisfy all legal requirements and normally attempt to meet ethical standards.

Such companies remain transparent about why they take specific actions and strive to be valuable to the society and the environment instead of hiding their actions.

These companies may even decrease waste creation, do away with animal-tested products and pay their employees fair wage.

They keep their records open to the public.

Although they strive to be socially responsible, they may change their policies in response to criticism just so they remain in their shareholders’ good books.


Companies that take a proactive approach to social responsibility make it a priority even if doing so ends up cutting into their profits.

They try to remain ahead of the curve in regards to social responsibility instead of reacting to criticism of their actions.

Most of them even include ethics in their mission statement and try to avoid any harm to the environment, the society or their employees.

Some of the actions associated with a proactive stance in companies include giving all employees living wage and benefits, instituting new recycling programs and donation of a portion of their profits to charity.


Although some companies still fail to give social responsible the respect it deserves, it is actually very beneficial to the overall business of a company if done willingly.

Nowadays, investors and consumers seek investments that aren’t just profitable, but also contribute to the welfare of both society and environment. Embracing  social responsibility can lead to maximization of shareholder value by reeling in those much needed investors while making sure that the consumers and community around you feel just as important.

Engaging in social responsibility will also boost morale for your company especially if you involve your employees in your social causes.

Social responsibility is not just the moral thing to do, it is good business practice.

What is the Purpose of Corporate Social Responsibility?

Corporate social responsibility is a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders. It is also known also known as corporate citizenship.

This self regulated company practice is aimed at improving society or impacting positive change.

It addresses a variety of issues among them, human rights, education, health, safety, corporate governance, working conditions and environmental stability.

CSR efforts ought to be focused on real life challenges and should aim to impact real change.

To be authentic in ones CSR, a company should ensure that the work they do every day is connected to what they care about as a company.

If a company chooses to engage in opportunistic or short lived attempts at social impact instead of going all in to make real change, they are bound to be found out by keen investors and customers who may then discredit their whole mission.

CSR can also be used as a marketing strategy as long as the company continues to put in the work and gain tangible results.

Importance of CSR

  • Improves the company’s public image which appears more favourable to customers.
  • Gives the company an advantage over competitors who aren’t engaged in CSR.
  • Improves brand awareness and value by showing that the company is not just about profits but also reliable positive change.
  • Fuels customer loyalty since most people want to be part of a company with a vision and willingness to do good.
  • Increased revenue.
  • Attracts and retains talented employees.
  • Motivates employees and brings about greater productivity by engaging employees in CSR.
  • Helps the society to find solutions to every day issues.
  • Helps nonprofit organizations find support beyond individual donors because companies with CSR mostly offer donations and voluntary programs to them.
  • Sustainable changes such as reduced packaging actually reduce the production costs.

How Does Government Shape the Social Responsibility of Organizations?

The government, through the national, state and local branches, tries to shape social responsibility practices through both direct and indirect means.

Direct influence involves the establishment of laws and rules that dictate what organizations can and cannot do.

This form of regulation is based on social beliefs and how businesses should conduct themselves.

Such regulation includes company laws, regulations for pension funds, stock exchange regulations, laws on CSR reporting and penalties for noncompliance, among others.

The government can also provide incentive by putting in place tax exemptions for social or philanthropic investments, internet platforms and award schemes that increase the visibility of CSR activities, training and capacity building for Small to Medium Sized Enterprises (SMEs) and providing funding for research on CSR.

We have also witnessed intervention where the government has raised awareness on CSR by demonstrating how companies can contribute to sustainable development while also encouraging public sector engagement in the same.

The government can also partner with companies to tackle issues such as poverty reduction, access to health care and educational infrastructure to ensure that interested companies can really impact the change they desire.

What is Economic Responsibility?

Economic responsibility in CSR aims at striking a balance between business and the environmental and philanthropic practices.

Companies have a responsibility to find a solution that will facilitate the long term growth of the business while also meeting the set standards of both ethical and moral regulations.

Economic decisions made in a company have to be made by considering their overall effects on society and the business.

An example of economic responsibility is where a company incorporates recycled products into its manufacturing process. The company lowers the cost of materials used while taking up fewer resources hence benefitting the society.