Business and Social Responsibility

The Social Responsibility of Business

Capital is not absolutely owned

Business is an activity that basically involves three sectors: labor,
management and capital investment. The desired result of the interaction
of these three sectors are: income for the laborer/employee, profit for
the owner-manager, and a greater capital base to increase and expand the
business. What most business owners tend to forget is that his business
has a social responsibility: meaning the welfare of his employees; and that
his capital is not absolutely owned by him but rather carries with it a social
or social justice dimension.

All these means is that money and profit are not the only aim or goal of a
business. It must be contextualized in a spirit of sharing and fair
distribution of the profits earned in all its activities. Therefore, it
follows the principle of: money at the service of society and not society
at the service of money. If a society were built on the latter principle,
then that society for sure will degenerate and lose the very foundation of
life on which it was originally built.

However, we do not also say that profit is not important. It is also
important because it is the fuel that mobilizes the activities of the
business and furthers on the expansion of the products being manufactured
and the services being rendered. With the growth of the business, more
of society benefits from its products and services. What we are rather
saying here is that a business must avoid all temptations to indulge in
profiteering techniques and processes. A conservative approach to making
it profit is to cut one's business costs - especially the fixed costs,
whenever possible. Variable costs must also be lessened. It is to
the advantage of the business owners whenever they decide something that
would benefit their customers and clients in the short run and benefit
their business in the long term.

If however a business owner makes a profit at the expense and cost of a
client or customer, his business will not thrive in the long run. Some
businessmen are too anxious to make a profit in the short run that they
forget that what is important is the long-term benefit that they can get
if they sacrifice a bigger income now for the sake of the customer. If
they indeed do so, the customer and client feels it and will never patronize
his business again.

Therefore, from what is mentioned above, we can see that what really matters
most in business are: good customer service, a relationship of good will,
some element of self-sacrifice for the business entity, the long-term benefits,
and making the customers feel good about the business. What we eventually
opt for is an optimization of the win-win situation for both business and
customer. The business profits and the customer is satisfied.

And when the business profits well, business owners and should not hesitate
to share their profits with their workers and laborers. For small businesses,
these need not be money but in kind. For large corporations and multinationals,
it could in terms of cash or greater fringe benefits and more perks. So in
this sense, not only is the customer or client-base satisfied but also the
workers and laborers of the business. It is therefore a three-win situation.
The business wins. The customer and client wins. And the laborers and workers
win. It may be the ideal situation not often arrived at but it is the ideal
that we should really strive for.

So all the elements above contribute to the living out of the ideal of being
a business that practices social responsibility. If all businesses - especially
large corporations and multinationals would operate on the principle - the
customer is #1 - and consider exceptionally well their clientele and
customer base; if they would focus on how well they could serve with more
excellence the needs of those who continually patronize them; then for
certain, societies will learn to value the ideal of service, more than
power and sharing, more than greed.

Dennis-Emmanuel Cabrera
May 1, 2005

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