Fundamentals of Management, 8th ed

social responsibility

The set of obligations

that an organization

has to protect and

enhance the societal

context in which it

functions

Chapter 2: The Environments of Organizations and Managers

4 7

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business: to earn profits for owners. For example, money that Chevron or General

Electric contributes to social causes or charities is money that could otherwise be distrib-

uted to owners in the form of dividends. Shareholders of Ben & Jerry’s Homemade

Holdings once expressed outrage when the firm refused to accept a lucrative exporting

deal to Japan simply because the Japanese distributor did not have a strong social

agenda.

19

Another objection to increasing the social responsibility of businesses reflects the

position that corporations already wield enormous power and that involvement in social

programs gives them even more power. Still another argument against social responsibil-

ity focuses on the potential for conflicts of interest. Suppose, for example, that one

manager is in charge of deciding which local social program or charity will receive a

large grant from her business. The local civic opera company (a not-for-profit organiza-

tion that relies on contributions for its existence) might offer her front-row tickets for

the upcoming season in exchange for her support. If opera is her favorite form of

music, she may be tempted to direct the money toward the local company when it

might be needed more in other areas.

20

Finally, critics argue that organizations lack the expertise to understand how to assess

and make decisions about worthy social programs. How can a company truly know, they

ask, which cause or program is most deserving of its support or how money might best

be spent?