Limitations of social responsibility

Answer 1

LIMITATIONS OF SOCIAL RESPONSIBILITIES

The social responsibility actions of business are limited by cost, efficiency, relevance, and scope. As result of these constraints, social responsibility actions fall short of public expectations.

1. Cost

Social responsibility costs money. Whether a firm desires to adopt a village, donate to college or school, built a hospital or undertake relief operations in times of calamity, it costs money and the money could be used for welfare of employees for improving business. As worthy as some social action may be, they do impose costs either on the business or on some groups in society, or both.

2. Efficiency

The cost of social responsibility can reduce a firm's efficiency and affect its ability to compete in the market place. For example, if a firm is pressured by a local community to keep an outmoded, inefficient plant in operation because closing it would mean loss to local people, while its competitors close their old plants and move operations to other countries to take advantage of lower wages there, the business would not survive at all. The mangers who place interests of local employees before the firm's survival, cannot face more efficient competitors.

3. Relevance

According to several critics and as stated earlier, business has no obligations to society. The only obligation is to run the business successfully. Social responsibility is irrelevant. "There is only and only one social responsibility of business: to use its resources and energy in activities designed to increase its profits so long as it stays within the rules of the game & engages in open and free competition, without deception". In short, business should produce goods and services efficiently and leave the solution of social problems to the concerned individuals and government agencies.

4. Scope and complexity

Society's problems are too massive, and too deep-seated to be solved by even the most socially conscientious company or even by all companies acting together. The problems - such as environmental pollution - acid rain, ozone depletion, destruction of rain forests; health problems - AIDS, drug and tobacco use; racial discrimination; and the like defy solutions however conscientious one might be. Each of these constraints influences and is influenced by other limits. All the constraints impact CSR and are influenced by corporate social responsibility.