Chapter 5
Socially Responsible Business – Doing the Right Thing
By Lizabeth England
Businesses have an ethical responsibility to customers who buy goods and services from them. Socially responsible business means that companies do the right thing for their customers. Companies consider profit, consumer satisfaction, and societal well being as equally important in the way business is conducted. Governments often enact laws that force businesses to function ethically. Consumers also can force businesses to act ethically regarding their purchases. For example, in the United States today, consumers and consumer activists boycott over 800 products.
This chapter is on socially responsible business. Teachers and students want to know about ways in which businesses are held accountable to customers for goods and services that they sell. According to consumer rights laws, people who buy goods and services have four rights: the right to be safe, the right to be informed, the right to choose, and the right to be heard. This chapter will provide teachers and students with opportunities to learn more about socially responsible business and about doing the right thing.
In the United States, businesses are often judged by their socially responsible behaviors. Most people agree that these include the following specific elements: equal employment opportunity for all citizens regardless of their race, religion or sex; respect for employees’ diversity, safety, and health in the workplace; and assurance and full disclosure on the quality of products and services. If any one of these elements is ignored or abused, a business is likely to be subjected to a penalty and sometimes, legal action.
In the 1960s, Ralph Nader, an American economist and consumer advocate, spoke and wrote about the social responsibility for businesses. Today, businesses use his ideas to make sure that customers’ rights are protected.
Many companies use the following list of customers’ rights (based on an abbreviated version of the United Nations’ Universal Declaration of Human Rights) to guide them in their efforts to be socially responsible.
What is socially responsible business?
A socially responsible business provides goods and services in line with a society’s values. Socially responsible businesses in the United States are concerned about how customers are protected and how employees are treated. There are federal and state laws that protect the rights of customers and employees, as well as the environment, from unethical business practices. Businesses in all countries should consider social responsibility as an important part of operations.
A brief description of ways in which customers’ rights are protected in the U. S. and in many other countries follows:
Customer Protection
Mr. Nader’s work in consumerism highlighted the value and need of protecting customers’ rights which is the basis of consumer rights laws.
The Right to be Safe
This right applies to the goods and services purchased by consumers. Injury or damage that consumers incur because of use of products or services are the responsibility of the manufacturer (product liability). As a result, many companies do comprehensive product testing to find any flaws or problems in their products before selling them on the open market.
The Right to be Informed
Consumers have the right to information about the products that they buy. If product or goods information is not clearly and completely available to consumers, they can (and have) sue the company. Groups that protect consumers’ right to information are the Federal Trade Commission and the Food and Drug Administration. The Internet contains many deceptive marketing claims because it is a new area for consumer rights activists in the United States and elsewhere.
The Right to Choose
In a competitive world, consumers have a right to choose among competing brands of goods and services. Ethical businesses encourage customers to "shop around," in order to find what they want to buy. Other companies may mislead and lie to customers in order to coerce them to buy a product which the customer may not want or need. This coercion is called fraud and is illegal. Fraud has become a serious problem for the telephone service industry, and others, in the United States.
The Right to be Heard
Many companies are concerned about customer satisfaction. Some have responded to customer complaints about service and fraud. In some cases, groups within the company are assigned to address customer complaints and to rebuild customer trust in and loyalty to their products. Innovation and change in service and new product development occur within a company, often as a direct result of these efforts.
Employee Protection
Typically, the areas of concern for employers in the United States regarding employee protection are these: equal employment opportunity for all citizens (regardless of their race, religion, sex or sexual orientation); respect for employees’ diversity (religious and cultural), safety and health in the workplace; and high-quality products and services with consideration for environmental protection.
Equal employment opportunity for all citizens
All citizens, regardless of race, religion, sex or sexual orientation, have a right to be considered for employment. This means that employers are not allowed to discriminate against an applicant on the basis of one or more of these factors. For example, it is illegal for an employer to refuse to hire a person because he/she is a member of a racial minority. The Equal Employment Opportunity Commission (EEOC) was established to ensure job opportunities for minorities and women.
Respect for employee diversity
Employees have the right to work in an environment where their individual values are respected. In general, this means that an employee is not singled out or treated differently because of his/her race, religion, sex, or sexual orientation. For example, an employee is allowed to take a holiday for religious observances.
Safety Issues
Historically, many employees have been subjected to extremely unsafe work conditions in the United States. Sweatshops produced life threatening working conditions for work with no fire exits and crowded work areas. Often this included young children working long hours for very low pay. As a result, the federal Occupational Safety and Health Administration (OSHA) was established to assure workplace safety and health. Worker safety is now a priority for almost all employers.
Quality of Life Issues
In recent years, concern for employees’ quality of life has become more common among employers. Businesses want their employees to be productive and to balance family and work life responsibilities. As a result, some companies have developed "flex-time" schedules, day care centers for children inside the company, on site education and training programs for employees, and opportunities for work leave when a family emergency requires the employee to be with a new baby, a dying parent or other relative.
