Companies have a social responsibility when producing and selling products. All production should be completed with customer safety in mind. For example, warning labels on prescription drugs should be used to prevent accidents that could result from misuse. Full information on side effects should be listed for public safety. Responsibility extends into the sales process as well. For example,
a common problem is that product may be overpriced because the salesperson is more interested in making a higher commission (rather than saving the customer money). Salespeople may also be inclined to withhold information just to make the sale.
Responsibility to Customers
Firms have a social responsibility to ensure that their products, services, and actions affect society in a beneficial way.
Responsibility to Employees
Employee safety can be improved upon by closely monitoring the production process to provide a safe working environment. Equal opportunity for all prospective employees regardless of their national origin, race, gender, or religion.
Responsibility to Stockholders
In an effort to ensure responsibility to stockholders, employee decisions are monitored to determine that they are made in the best interests of the owners (i.e., maximizing the firm’s value).
Responsibility to Creditors
Firms must meet their financial obligations to their creditors, those who have provided loans to the firm. Firms violate their responsibility to creditors when they provide misleading financial information about their financial condition.
Responsibility to the Environment
To prevent air pollution, firms have implemented changes in their production processes in order to minimize airborne emissions. As a result of the production techniques used by certain firms, nearby land has been polluted by toxic waste.
Responsibility to the Community
This is demonstrated by firms sponsoring local events and donating to local charities.
Source:
Introduction to Business,(2006) by Jeff Madura (4th ed.). Thomson.
No comments:
Post a Comment