Chapter 20, Lesson 3

The Social Responsibility of Businesses  Businesses play several important roles in society.  As producers, they supply the food, clothing, and shelter we use to meet basic needs.  They also have a social responsibility, or an obligation to pursue goals that benefit society as well as themselves.  For instance, many businesses support schools with money or supplies.  Corporations give away about $14 billion each year for different causes.  Can you think of any examples?

Foundations  Some families and businesses establish foundations, institutions created to promote the public good, in order to raise funds or awareness of certain causes.  For instance, Bill Gates, the founder of Microsoft, has donated over $23 billion through the Bill and Melinda Gates Foundation.  It is not only the biggest American companies that give either.  About 75% of small companies also give money, products, or services.  Even some law firms and accountants provide free services to poor people or to nonprofit groups.

Responsibilities to Consumers  Laws require businesses to meet certain responsibilities, and business owners and managers may face serious problems or even legal action if they do not follow those laws.  Businesses must sell products that are safe and that work properly, and services must be reliable.  Many companies guarantee their products and services for a period of time.  Businesses also have the responsibility to tell the truth in their advertising and to treat all customers fairly.

Responsibilities to Owners  Another responsibility is to the stockholders, who are the owners of the business.  This is especially crucial for corporations, where the people who own the company are not the people who actually run it.  To protect stockholders, corporations have to release financial reports on a regular basis.  Revealing, or making public, this information is called transparency.  If a manager of a corporation is not honest in these reports, the government can prosecute them for breaking the law.  Part of the reason why this law was created was the Enron scandal.

Responsibilities to Employees  Businesses are required to maintain a safe workplace and to treat all workers fairly and without discrimination.  Decisions on hiring and firing as well as promotions must be based on the quality of the work the employees perform.  Many businesses try to help workers by providing benefits or services like money for college, child care, or fitness centers.  Health insurance is a benefit that many companies have traditionally given their workers.  Large businesses are actually required to offer health benefits to full-time employees, and the government offers tax credits to small businesses who do the same.  Helping workers in these ways benefits the employer as well as the worker.  After all, a worker in good health will be much more productive and miss less work!

Wouldn’t you like to work here??  QRA84