Corporate social responsibility impediments and managerial solutions

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 or to at least minimize the impact of this on people's perception of the firm. 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.

The company has been following the ethical conduct which is rather odd because while it wants to be a socially responsible firm, it has also been focusing on cutting costs by producing cheap fortified wines. It must be understood that fortified wines are frowned upon because of their very highly alcoholic content and cheap price. By offering this range of wines, the company is showing that it does care about ethics but believes that ethics is everybody's responsibility and it is not the job of a manufacturer to force anyone to adopt ethical behavior.

While this approach may work for the firm as it needs to carve a niche for itself but at the same time, it is also the highly risky because people can take the company to task for producing cheap wines which is helping habitual alcohol drinkers satisfy their urge for alcohol at the cost of their health. The firm is a respectable name for other wines that it makes but in an effort to stay near the top in wine industry, it has been trying to cut corners by producing a cheap variety of wine which is helping the firm in maximizing profits at the risk of hurting the health of the underprivileged and underage drinkers.