Social Responsibility: employees and workers

• An organization's social responsibility encompasses its decisions' and actions' effects on society and the environment.
• This is achieved through ethical and transparent behavior.
• It contributes to sustainable development, including societal health and welfare.
• Responsibility is the duty to satisfactorily complete an assigned task.
• Accountability is the obligation to explain activities and accept blame for failures.

Social Responsibilities Towards Employees and Workers

• Entrepreneurs must pay employees at least the minimum wage and all earned wages, including overtime and leave.
• Employees are entitled to reasonable and attractive compensation.
• Employees should be assigned jobs based on their skills.
• Entrepreneurs must provide job security and a positive work environment.
• Opportunities for professional development through training and education should be available.
• Mutual understanding and welfare schemes, such as financial aid for health issues, should be developed.
• Employees should be treated humanely, and mistakes should be handled fairly.
• Well-defined service conditions, like promotions and retirement plans, should be in place.
• Wage incentive schemes motivating high-quality work should be adopted.

Social Responsibility Towards Government

• Entrepreneurs must comply with government regulations.
• Entrepreneurs must pay taxes honestly, including income, sales, excise, and tariff duties.
• They must avoid corrupting government processes.
• Entrepreneurs must not seek political favors through unethical means.
• Cooperation with the government for economic development is essential.
• A tariff/duty is a tax governments put on the value of imported goods, freight and insurance included.
• Excise tax is a legislated tax for specific goods/services at purchase e.g. fuel, tobacco, and alcohol.

Social Responsibilities Towards Suppliers

• Suppliers are crucial for providing raw materials, machinery, and labor.
• Entrepreneurs should pay fair prices and make timely payments.
• Suppliers should be informed about future developments and changes in demand.
• Technical assistance should be provided to suppliers for new product development and innovation.
• Healthy competition among suppliers is encouraged.

Social Responsibilities Towards Creditors

• Financial institutions play a vital role in entrepreneurship.
• Entrepreneurs should obtain loans under reasonable terms.
• Mortgage rules and business ethics must be followed when using debt capital.
• Installments and interest should be paid religiously until the loan is repaid.

Social Responsibilities Towards Customers/Consumers/General Public

• Entrepreneurs should provide commodities and services that meet consumer needs at affordable prices.
• Truthful advertising and proper packaging are essential.
• Customer complaints should be addressed promptly.
• Hoarding practices for profit maximization should be avoided.
• Customer research should be promoted to understand changing consumer preferences.
• Efficient distribution should be implemented to avoid high costs.
• Civilized and respectful behavior towards customers is crucial for business prosperity.
• Businesses should provide employment to stakeholders.
• Improving standards of living through scholarships for employees' children can be pursued.
• Good public relations should be promoted to understand public opinions.

Social Responsibilities Towards Stakeholders

• Entrepreneurs have a significant role in the local community.
• Efforts should be made to improve surrounding areas by offering employment and helping those in need.

Responsibility vs. Accountability

• Responsibility can be shared, while accountability cannot.
• Accountability means being responsible and answerable for actions after a task.
• Responsibility can be assigned before or after a task.
• Responsibility involves tasks and duties.
• Accountability involves accepting blame for failures.
• Responsibility: Completing a step in the process.
• Accountability: Ensuring that the step is completed appropriately.
• Responsibility: Many people can be responsible for the action.
• Accountability: Only one person can be accountable for the action.
• Responsibility: The doer.
• Accountability: Where the buck stops.
• Responsibility: Responsible to the person accountable.
• Accountability: Responsible for ensuring that the work, task, or process is completed to the required standard.
• Responsibility: Assigned to do the work.
• Accountability: Make the final decision (sign-off) about the work including "yes" and "no" authority plus veto power.
• Responsibility: Works on the activity.
• Accountability: Has ultimate ownership of the activity.
• Responsibility: Entrusted with the task.
• Accountability: Liable for any faults.
• Responsibility: The person responsible for doing it.
• Accountability: The person accountable to see that it gets done.
• Responsibility: Delivers to Accountable's brief.
• Accountability: Accountable signs-off or approves the work Responsible provides.
• Responsibility: Develops and makes happen.
• Accountability: Sets rules and policy.
• Responsibility: Facilitates, co-ordinates and clarifies.
• Accountability: Directs, validates and approves.

Responsibility vs. Ownership

• Responsibility is assigned or given.
• Ownership is taken.
• People given accountability tend to hide problems.
• People who take ownership naturally have the habit of exposing problems because those issues get in the way of their success.
• They want to overcome problems so they will raise issues.
• They admit short-term failures and ask for help.
• Managers hold people accountable.
• E.g. "I'm going to make this happen. Here's what I will do. Here's what I will accomplish. And here's how I will measure progress."
• "I will"

Supercharging a Business

• Micromanagement involves closely controlling employees' work.
• Micromanagement fails when scaling a business.
• Fostering a culture of ownership eliminates the need for micromanagement.
• Instead: Hire people such that you have to assign accountability, you build a company where employees are engaged and satisfied because they thrive in a culture of autonomy and independence.
• Hire owners, people care a lot more when something is theirs: their idea, processes, and responsibility.
• Outstanding leaders create broad standards and guidelines and then challenge their employees by giving them the autonomy and independence to work the way they work best.
• Some ways to supercharge your business:
  • Hold weekly team meetings.
  • Make everyone accountable.
  • Connect with your customers.
  • Don’t chase your customers, let them come to you.
  • Turn your weaknesses into strengths.

Ethical Issues in Entrepreneurship

• Integrity is essential for establishing goodwill.
• Ethical issues involve choosing between right and wrong actions.
• All business actions must be legal.
  • Nepotism is favoring relatives or friends.
  • Entrepreneurs should choose the best person for each position.
  • Intellectual property includes copyrights, patents, and trademarks.
  • Copyright infringement: Using copyrighted material without permission.
  • Patent: Granting property rights to an inventor.
  • Trademark: Using a registered name, symbol, or image for products/services.
  • Always seek permission to avoid conflicts.
  • Workplace fairness is essential for productivity.
  • Employees should be treated fairly.
  • Organizations must maintain integrity in accounting.
  • Unethical accounting practices involve reporting inaccurate financial statements.
  • Businesses must understand basic contract concepts.
  • Tort law protects people from harm.
  • Antitrust law prevents abuse of power, giving small businesses a chance to compete fairly with larger and more established companies.
  • Businesses must fully disclose the truth about their products/services.
  • Truthfulness leads to reliability and credibility.
  • Conflict of interest occurs when multiple interests conflict with each other.

Social Responsibility / Corporate Social Responsibility (CSR)

• It is an individual's or a social entity's accountability and responsibility to maintain a certain behavior and to contribute to the development of society as a whole.
• CSR is a business's responsibility to the society around it.

Models of Social Responsibility

• CSR models are designed to execute and monitor the CSR process.
• CSR benefits people and entities with few or no resources.
• Environmental responsibilities involve behaving in an environmentally friendly way e.g. reducing pollution, rely on renewable energy, plant trees.
• Legal responsibility is compulsory under laws, acts, and constitutions e.g. complying with safety regulations.
• Economic responsibilities involve backing financial decisions with a commitment to doing good.
• Philanthropic responsibilities focus on actively making the world a better place.
• Ethical responsibilities involve behaving consistently with societal norms and values, beyond legal compliance.

Six Models of Social Responsibility

• Carroll's CSR Pyramid Model (not detailed in provided text).
• Intersecting Circles Model:
• Integrates economic, legal, and moral aspects without prioritizing any. None of the aspects are more important than the other.
• Concentric Circles Model:
• Supports social control of business within the business itself for public welfare and private interests.
• Reflects society's control over business activity to ensure social progress and the internalization of social norms.
• Redman's Model:
• Focuses on environmental integrity and human health.
• Ackerman's Model (1976):
• Focuses on internal policy goals and their relation to CSR.
  • Six strategies: rejection, adversary, resistance, compliance, accommodation, and proactive.
• Involves managers understanding social problems, studying the problem, actively working on the project, and evaluating the project
  • Friedman Model (1962-1973):
    • Business owners should perform his duty well as he is performing a social as well as moral duty.
      • Model follows that businesses do not have to perform social responsibilities to any other but his shareholders and stockholders.
        • Spending shareholders money for social interest makes no sense and thus was against the concept

Benefits of Corporate Social Responsibility

• CSR can be a powerful marketing tool, improving a company's image.
• CSR improves employee engagement and satisfaction.
• CSR forces business leaders to examine hiring practices, sourcing, and customer value.

Social Enterprise

• Social enterprises address unmet needs or solve problems through a market-driven approach. Maximizing profits is not the primary goal.
• They generate revenues to fund social causes, unlike charities.
• Preference is given to employing job seekers from at-risk communities.
• Social Mission: A social enterprise exists to achieve a social mission e.g. providing healthcare or safe drinking water for the poor, introducing renewable energy, creating jobs for the unemployed or advancing education initiatives.
• Sustainable revenue differentiates a social enterprise from traditional charities.
• Profits are reinvested into the social mission rather than shareholder payouts.
• A business must have a reason to exist beyond making money.
• Profit cannot be the goal, vision, or purpose of an organization. Seeking profit as a primary business purpose will lead to a lack of strategies and reduced staff motivation.

7 Reasons Not to Use Profit as Your Primary Purpose

• Profit is temporary and can be wiped out, especially in tough times.
• It doesn't motivate salaried staff.
• Customers don't appreciate being seen only for their revenue.
• Consumers are increasingly focusing on values and contribution to society when choosing who to do business with.
• A true vision rests on purpose and values.

6 Reasons to Look Beyond Profit

• Purpose and values motivate and unify staff.
• They provide a solid foundation for decisions.
• They provide a compass for all elements of the business.
• They encourage customer and staff loyalty.
• They encourage a strong culture within the business.

Values

• Core values are defined internally and are embedded in the DNA of an organization.
• Core values do not change with the seasons but are deeply held values already embedded within the DNA (culture) of an organization
• Examples: imagination, product excellence, customer service, respect, quality, market focus, teamwork.

Purpose

• A business's core purpose is its fundamental reason for existing.
• You could ask yourself: “Why does this business exist?"

Is The Purpose of Business to Make Profit?

• Business is a deeply human institution, but its purpose is not to make as much money as possible.
• The purpose is to offer value (through products and/or services) to customers, who pay for the value with cash or equivalents.

Sustainable

• Means ‘the capacity to endure’. In business, that means you’re in it for the long haul.
• Sustainability involves managing environmental, social, and financial concerns for ongoing success.
• Sustainability requires a longer timeline for return on investment (ROI).
• A sustainable business generates profit while improving societal and environmental conditions.