IMPORTANT VARIABLES IN THE INTERNATIONAL SYSTEM:
- Different National Sovereignties.
- Disparate National Economic Conditions
- Different National Values and Institutions
- Difference in timing of National Industrial Revolution
- Geographical Distance
- Different Areas and Population
Lipson, a desirable and socially responsive approach to meeting social obligations does the following:
- Incorporates social goals into the annual planning process.
- Seeks comparative industry norms for social programs.
- Presents reports to organization members, the board of directors, and stockholders on social responsibility progress.
- Experiments with different approaches for measuring social performance.
- Attempts to measure the cost of social programs as well as the return on social program investments.
S. Prakash Sethi presents 3 management approaches to meeting social obligations:
- Social Obligation Approach: It considers business as having primarily economic purposes and confines social responsibility activity mainly to existing legislation.
- Social Responsibility Approach: It sees business as having both economic and societal goals.
- Social Responsive Approach: It considers business as having both societal and economic goals as well as the obligation to anticipate potential social problems and work actively toward preventing their occurrence.
CONVERTING ORGANIZATION POLICIES ON SOCIAL RESPONSIBILITY INTO ACTION:
A policy is a management tool that furnishes broad guidelines for channeling management thinking in specific directions.
To be effective, social responsibility policies must be converted into appropriate action.
PHASE 1: It consists of the recognition by Top Management that the organization has some social obligation. Top Management then must formulate and communicate some policy about the acceptance of this obligation to all organization members.
PHASE 2: It involves staff personnel as well as Top Management. In this phase, top management gathers information related to meeting the social obligation accepted in phase 1. Staff Personnel are generally involved at this point to give advice on technical matters related to meeting the accepted social obligation.
PHASE 3: It involves division management in addition to the organization personnel already involved from the first 2 phases.
During this phase, top management strives to obtain the commitment of organization members to live up to the accepted social obligation and attempts to create realistic expectations about the effects of such a commitment on organizational productivity.
Staff specialists encourage the responses within the organization necessary to meet the accepted social obligation properly; and division management commits resources and modifies existing procedures so that appropriate socially oriented activities can and will be performed within the organization.
- Enhanced corporate reputation and goodwill.
- Strengthening of the social system in which the corporation functions.
- Strengthening of the economic system in which the corporation functions.
- Greater Job satisfaction among all employees.
- Avoidance of issues with government regulations.
- Greater job satisfaction among executives
- Increased chances for survival of the firm.
- Ability to attract better managerial talent.
- Increased long term profitability.
- Strengthening of the pluralistic nature of American Society.
- Maintaining or gaining Customers
- Investor Preference for socially responsible firms
- Increased short term profitability
- Decreased Short term profitability
- Conflict of economic or financial and social goals.
- Increased prices for consumers
- Conflict in criteria for assessing managerial performance
- Disaffection of stock holders.
- Decreased Productivity
- Decreased Long term profitability
- Increased Government Regulation
- Weakening of the economic system in which the corporation functions.
- Weakening of the social system in which the corporate functions.
SOCIAL OBLIGATIONS OF THE MANAGERS TO VARIOUS STAKEHOLDERS :
- STOCKHOLDERS: To increase the value of the organization.
- SUPPLIERS : To deal with them fairly
- BANKS & LENDERS: To replay debts
- GOVERNMENT AGENCIES: To abide laws.
- EMPLOYEES & UNIONS: To provide safe working environment and to negotiate fairly with union representatives.
- CONSUMERS: To provide Safe Products
- COMPETITORS: To compete fairly and to refrain from restraints of trade.
- LOCAL COMMUNITIES & SOCIETY: To avoid business practices that harm the environment.