What does it mean if some company is social responsible? What should some company do in order to become social responsible?

By the term “corporate social responsibility”, people mean of corporate efforts to do good things for the environment where company is located. It is important to know that not every company is social responsible if they just follow the rules. Following the rules about hiring local people, about environment and about other things is not an example of corporate social responsibility. Company must be willing to do more than just following those rules in order to make the community happy to have such company in their neighborhood. Following the rules will keep the community not to be unhappy, but, in order to make them satisfied, companies need to do something for them because they want, not because they must do that. They must show that they care.

Although there are many definitions of CSR, there is no exact definition that could be taken for the best. WBCSD – World Business Council for Sustainable Development has defined CSR as continuous efforts of some company to act ethically and to contribute to development, and improving life quality of their employees and their families, but also local and wider social communities. By the UN, CSR represents total contribution of some company to sustainable development. IFC defines corporative social responsibility as decision of a company to contribute to sustainable development by working with employees, their families, local and wider community with a goal to improve life quality, with achieving welfare for the company itself.

The CSR is not only related to large companies, but, every entrepreneur and the whole SME sector should work hard to achieve positive thinking about themselves in the community by being social active, by contributing to the community. Every company should set the large picture as their goal. Short term costs are easier to see than long term effects that are often a lot more than just a sum of all goods spent in order to be social responsible. In the other words, companies should satisfy customers with respecting expectations of their employees, suppliers and local community. It is important to know that social responsibility gives direct benefits to the company and ensures long-term competitiveness.

We can say that CSR represents a mechanism of self-regulation, the way how companies manage their social, economic and ecological influence and includes their relation to all stakeholders. This term is not only connected to what companies do with their profits, but also how they earn it. It goes over philanthropy and respecting the law, and considers contribution of companies to sustainable development. Finally, these definitions say that it doesn’t only affect well on the community, but also on the welfare of the company.
There is a question that always comes out when we are talking about corporate social responsibility – To whom and for what they are responsible? There are two answers that say about this. The first is named the stockholder theory.This theory says that the primary responsibility of companies is responsibility that they have to their owners – stockholders, so, making profits is the main goal of their activities. On the other side, there are supporters of stakeholder theory, who find companies responsible to all groups concerned with their activities.

Milton Friedman thinks that increasing profits with respecting the rules of the game and laws are the only things companies are responsible for. He says that managers are set by owners and are responsible for their financial welfare. By collecting taxes and budgets, countries are responsible for solving community problems. He finds that it would be too hard if someone expected from companies to solve social problems. The only thing that managers should take care is leading their business well, which is shown with profitability. Every other goal is under the main goal and could be justified only if it increases profits.

On the other hand, Edward Freeman thinks that owners, but also buyers, suppliers, managers, employees have some stake in the company and they take certain risks. Because of that with creating goals of the company, managers should consider interests of every group mentioned. As the matter of fact, the company is responsible to every stakeholder. At the same time, every stakeholder could affect positively or negatively on the company and could be crucial for success. Because of that, none of those groups mustn’t be used as a tool for achieving some final goal, but the company must do their best to create optimal solution that will make every stakeholder satisfied.