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Socially Responsible Business

A socially responsible business refers to a venture that is not only profit-oriented, but also focused on leveraging business for a more sustainable world. According to Fatuła and Krstić (2014), the objective of a socially responsible business goes beyond profit maximization for shareholders to include making valuable contributions and creating positive changes to stakeholders such as its staff, customers as well as the community in which it operates. As noted by Fatuła and Krstić (2014), a socially responsible business is socially responsible as well as profit-oriented. As socially responsible businesses seek financial gains, one of their central aims is to the community’s well being. In so doing, such businesses engage in voluntary initiatives focused on improving the environmental and social aspects of society. Notably, the concept of social responsibility in business is grounded in the highest level of engagement between the business and the community in which the business operates with a central goal of making positive contributions, ensuring environmental sustainability and fostering good in society (Stephens n.d). According to Stephens (n.d), a socially responsible business prioritizes a socially responsible activity while seeking to create a long-term relationship with the community in which it operates. This essay seeks to describe a socially responsible business while considering the role of shareholders, stakeholders, and ethics in organizations.

Description of a Socially Responsible Business

As noted above, a socially responsible business is a venture whose focus extends beyond profit maximization for shareholders to include making valuable contributions and creating positive changes to stakeholders such as its staff, customers as well as the community in which it operates (Fatuła & Krstić 2014). Such businesses are focused on giving back to society as well as reducing the impact of their industrial process on humanity and ecology. As a result, socially responsible businesses are not only socially and environmentally conscious but also engage in charitable initiatives focused on improving the wellness of the community in which they operate (Stephens n.d). For instance, Altered Seasons is an eco-friendly candle company founded by Kelly Reddington, at age 14 years, in 2003 with the help of his mother. This company provides a perfect example of a socially responsible business. Evidently, the company is focused on giving back to society and improving the wellness of the community through its charitable initiative based on a one-for-one model (Fallon, 2017). In this model, the company, through its feeding America initiative, provides a meal to an American in need for every candle sold. Another example that illustrates a socially responsible business is the Rainbow Light. This company was founded in 1981 as a seller of spirulina nutritional supplements to health-conscious consumers (Fallon, 2017). According to Fallon (2017), the company is focused on improving the health of its customers and other stakeholders including trade partners, global community, and the planet.  To achieve this, Rainbow Light Company has developed an initiative referred to as the Circle of Care initiative in which the company, through a nonprofit organization called Vitamin Angels that reaches out to at-risk mothers and babies with vitamins, fights global malnutrition with its supplements. The company also uses BPA-free packaging that is 100 percent recycled and recyclable. Evidently, all these efforts are meant to improve the wellness of the global community by the company (Fallon, 2017).  Similarly, the Fashion Project is another example of a socially responsible business. This company was founded by Anna Palmer and Christine Rizk in 2012 as a platform that allows the donation of, and shopping for second-hand clothes by consumers (Fallon, 2017). According to Fallon (2017), this organization provides an opportunity for customers to make tangible differences through purchases and donations. In doing this, the company aims to improve the wellness of the community by ensuring that for every item sold, up to 55 percent of the net profit is given to the donor’s charity of choice (Fallon, 2017). Clearly, all the three business organizations discussed above illustrates the conduct of a socially responsible business by not only being profit-oriented but also making valuable contributions and creating positive changes to stakeholders.

Role of Stakeholders and Shareholders in Organization

Stakeholders, including internal stakeholders such as employees and external stakeholders such as customers, play a significant role in ensuring social responsibility of a business (Aras & Crowther, 2007). For instance, internal stakeholders of a company have a direct role in designing and implementing corporate social responsibility (CSR) initiatives of the organization thereby ensuring that the organization remains socially responsible (Aras & Crowther, 2007). On the other hand, external stakeholders such as customers and shareholders are increasingly becoming more attuned to ethical and sustainability considerations undertaken by the companies they patronize thereby compelling organizations to demonstrate their CSR (Aras & Crowther, 2007). In so doing, external stakeholders play a critical role in ensuring an organization operates ethically and implements its CSR initiatives including giving back to society and reducing the environmental impact of their processes so as to achieve sustainable competitive advantage. For instance, customers prefer consuming goods produced in a socially responsible way. As a result of the growing concern about environmental sustainability among external stakeholders, businesses are compelled to adopt various socially responsible business practices as they give special attention to their activities (Aras & Crowther, 2007). Consequently, stakeholders play a role in ensuring socially responsible practices in organizations as they strive to create value and positive contribution towards stakeholders including employees, customers, and community.

Role of Ethics in an Organization

Ethics are principles and values an organization employs in the running of its operations. Ethics play a critical role in an organization as it defines the appropriate behavior in the operations of the organization. According to Aras and Crowther (2007), ethics play a key role in ensuring social responsibility of an organization by fostering an honest, respectful and fair conduct by the organization in all its engagements with stakeholders. In so doing, ethics promotes socially responsible business practices in an organization.

In summation, a socially responsible business is a venture that whose focus extends beyond profit maximization for shareholders to include making valuable contributions and creating positive changes to stakeholders such as its staff, customers as well as the community in which it operates. Examples of such businesses include the Altered Seasons, the Rainbow Light, as well as the Fashion Project. Stakeholder, shareholders, and ethics play a central role in promoting socially responsible business practices in an organization.