Do businesses have responsibilities to the society in which they operate? Are those responsibilities more important than the responsibility of a business to make profits for its owners?

Answer:

Yes, Businesses have social responsibilities. CSR has now become mandatory in almost all the companies especially MNC. Statistics reveal that about 75% of the top 100 companies in the United States and about 80% of the world’s largest companies publish CSR reports annually. Nestlé’s “Creating Shared Values” CSR program is renowned worldwide. This CSR program enriched the living standards of farmers and welfare of the cattle in Africa and India. Nestle entered global markets to sell milk by establishing local networks. It ran its CSR program by running its truck to the place of the farmer to treat the sick cattle and educate the poor farmers on cattle nutritional diet and its welfare. This CSR initiative resulted in the increase of milk production by maintaining the welfare of the cattle and improving the lifestyle of the local farmers. This benefited the society and at the same time increased profits for Nestle. Other popular CSR initiatives include GE’s Ecomagination and Unilever’s Simple living Plan. Hence it can be concluded that CSR programs and business profitability are positively correlated with each other.  
Social responsibilities and profit-making responsibility of a business are highly correlated. CSR is used by companies as a strategy to increase their profits and publicity but no doubt it benefits the society. Wal-Mart is another example of using CSR as a cost-cutting strategy. Wal-Mart cut down its costs in its supply chain by cutting out 100 million miles travel by its trucks and at the same time contributed to reducing the carbon footprint benefiting the environment as a whole. Mark Kramer and Michael Porter initiated the societal concept in business. Milton Friedman pioneered the CSR concept and debated the relationship between social responsibility and profits of a business. Milton Friedman strongly argues that CSR is an investment for the business to maximize the profits. He explains that by using CSR, business gets free publicity and earns a good reputation among the public. This enables it to sell more of their products and increase the profits. The businesses save millions of dollars to be spent on advertising by getting free publicity by adopting CSR initiatives. Businesses enjoy a high social status as a result of CSR and have powerful lobbying power to obtain licenses for their operation. Businesses in coal mining, sand mining and other fields that affect the environment get licenses to operate by running a CSR program. Businesses build investor confidence through CSR initiatives and make them believe that by investing in the company stocks, they are contributing to the environment and socially responsible.