Crafting and Executing Strategy
Social responsibility in corporations is one of the most important subjects of debate these days. Managers are heavily burdened with the job of creating a socially responsible image for their organizations. But while social responsibility is desirable, not all firms can invest in social ventures due to various impediments and one of the main impediments can be lack of funds. While the firms would still try to invest to the extent necessary, they may not find enough funds to invest as much as they might otherwise desire. Managers are then faced with a huge challenge and an important question i.e. how to explain the lack of funds to the public?
Most managers would want the public to see the organization as a social responsibly one but lack of funds can sometimes act as a serious impediment in the way of creating the image as a socially responsible firm. For this reason, the managers need to find a way that would allow it to overcome this impediment...
We must understand that while law would require firms to be socially responsible to some extent, some thinkers including Milton Friedman believe that a firm's job is to maximize profits and not to invest in social ventures. Thus if a firm is unable to do beyond what the law requires, we need to understand that there is another way they are contributing to the welfare of the community i.e. By maximizing profits. Managers need to keep this point in mind when they are questioned about their low investment social ventures. They must be ready to show the public that by focusing on better performance and higher profits each quarter, they are being socially responsible too because with more profits and better financial health, more jobs can be created, more products can be launched, more services can be offered and price benefits can also be extended to customers.
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