Arguments against Social Responsibility Business

Arguments against Social Responsibility

In the previous post, we have discussed Arguments for Social Responsibility of Business you can read about this by a just click on this post. 

Now, let discussed Arguments against Social Responsibility!!!

Arguments against Social Responsibility

Around are various arguments against social responsibility however most of these are based on classical economics. These arguments are as follows:

1. Contrary to Basic Function of Business,

The basic purpose of a business is to deliver a product to its customers at a price that is lesser than the level of satisfaction providing by the use of the product.

If this relationship is the wrong way up, the product becomes worthless. Normally, the cost of production matters in defining the product price.

The release of social responsibility enhances cost, henceforth product price, which may opposite the above equation and the business not continue practicing in the long term.

As of this phenomenon, Milton Friedman, a noted economist has observed,

there is one and only one responsibility of business — to use its resources and engage in activities designed to increase its profit so long as it stays within the rules of the game.

2. Conflict with Profit Motive

Social responsibility conflicts with profit reasons of business. Enterprise business includes assuming risk. Making a profit is the prize for this risk. If social responsibility is additional as an aim of business, it decreases profit margin which is against the idea of profit optimization.

Thus, social responsibility and profit reason do not continue in the same way.

3. Misrepresentation in Resource Allocation

Social responsibility principals to misrepresentation of resource allocation. We owe resources in an economic system on the belief that each resource finds its maximum best utilization. This utilization is best possible without social responsibility and not with it.

Thus, social resources might go in unused if it added the concept of social responsibility to business procedures.

 4. Obligation of Business Values

Settling social responsibility includes a lot of influence of the business on society. Hence, by undertaking social responsibility, a business is expected to enforce its own principles on the society, thus changing the social values with business values.

This phenomenon has taken place most times. This is very objectionable from the social point of view.

5. Incompetence in the System

Social responsibility brings incompetence to the system. There is no substitute for the power of self-interest to become people to act. Any replacement of self-interest will do the same.

So, remain fatal to the competence of the system. Social responsibility has a tendency to change the self-interest of business well-defined in terms of the profit motive to a great scope, therefore, making the business as an organization incompetent.

6. Functioning Problems

There are certain functioning problems in applying social responsibility. Practically as well as operationally, social responsibility is an unclear term. 

So executives involved in handling business dealings are not very strong about what they are likely to do under social responsibility.

As a result, actions reaching from simple show lip kindness to responsibility multi-crore existing programs remain included in social responsibility.

So, That is all my side, If you like this post please share with it to your friends on Whatsapp, Facebook, LinkedIn, Telegram or just forward it as it. 

Happy Reading!!

Nadeem Khan
M.Com, M.B.A.
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