Social responsibilities constitute an essential part of the functioning of modern companies. In this respect, large companies and multinational corporations are particularly concerned on their social responsibilities. At the same time, the significance of social responsibility of large corporations and goals of contemporary business are often viewed as antagonistic notions since they contradict to each other. Social responsibility is an unnecessary burden for the business. Nevertheless, modern companies have already understood the importance of their social responsibility for the creation of the positive public images of companies and, hence, loyalty of customers.
Basically, there are several categories of social responsibilities. First of all, the main category, which may be viewed as a traditional category of social responsibilities of the company, is the category of the local social responsibilities.
This is the employee safety and health category. What is meant here is the fact that the company should take care of its employees and it should provide them with social guarantees, for instance, sponsoring healthcare services their employees and members of their families need. This social responsibility focuses on the company itself and its personnel and helps create a positive organizational atmosphere within the company (Pride et al., 2008). At the same time, social responsibility of a company in relation to its employees contributes to the unification of the company and decreases the risk of the personnel turnover and loss of valuable and prospective employees. In addition, corporations should avoid any kind of discriminations within the organization, including ethnic or gender discrimination. In fact, all employees should have equal opportunities within organizations.
On analyzing benefits of the social responsibility of the company, it should be said that primarily, it contributes to the growth of the customers’ loyalty. To put it more precisely, modern customers are extremely concerned with the social responsibilities of companies since they need to feel that the business is able to maintain the local communities and can bring social benefits to the community. In contrast, the ignorance of the social responsibility is likely to lead to the deterioration of its public image since customers will perceive the company as being unable to implement socially responsible policies. Hence, customers will perceive social irresponsibility of the company as offensive policy which deteriorates the life of the community. In this respect, it is necessary to remember about ethical implications of modern business since business ethics is of the utmost importance in the contemporary business environment, while social responsibility is an essential part of business ethics, which overall shapes a positive public image of the company and, hence, the customers’ loyalty.
In addition, social responsibilities of the company will put the company in an advantageous position compared to the major rivals which fail to implement socially responsible policies. In this respect, it is possible to speak about competitive advantage in historical and financial terms. To put it more precisely, today, social responsibilities constitute a part of advanced business policies. Being innovative, they give the company a strategic competitive advantage compared to rivals who fail to introduce social responsibilities (Kaliski, 2001). In financial terms, social responsibilities may seem to be an unbearable burden for the company, but, in actuality, the growth of customers’ loyalty and positive public image of the company and its brand will outweigh possible financial losses and, in perspective, can bring substantial financial benefits.
Furthermore, it is necessary to take into consideration the current economic crisis, which put a company in a very difficult position. In such a situation, the decision to cut socially costs seems to be logical, but it will be absolutely erroneous because the implementation of social responsibilities will facilitate the recovery after the crisis. Obviously, well-qualified employees will be confident in the social responsibilities and reliability of the company and they will be likely to join the company as soon as the recovery gets started. In addition, social responsibilities will allow the company to preserve the best specialists and avoid undesirable personnel takeover.
Finally, it is necessary to remember about the reputation of CEOs since due to social responsibilities the CEO’s reputation is seen positively. Hence, employees, customers and business partners grow more confident in the reliability of the CEO and his/her ability to fulfill his/her obligations even in the extremely difficult business environment, such as the current economic crisis, for instance (Pride, Hughes & Kapoor, 2008).
Thus, in conclusion, it is important to underline that social responsibilities play crucial role in the interaction between business and companies, on the one hand, and society, on the other. In such a situation, the implementation of social responsibilities is a strategically correct policy.