Once upon a time, the main focus of the business sector was scaling profits. Fast forward to today’s world of business, and notice the vitality of profitability is starting to share the prioritization scale with social responsibility. Business leaders must incorporate an additional perspective when making business decisions, which includes considering social and environmental impact when growing and operating a business. The role ethics now play in modern business practices has created tension for traditional efforts and strategies for maximizing profits. Everest Business Funding helps small businesses survive and thrive while adjusting to their call to social and environmental diligence by delivering revenue-based working capital. The firm further discusses the topic of balancing profit and social responsibility below.
What is Social Responsibility?
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Social responsibility is defined as companies and individuals acting as a whole with their environment’s and society’s best interests in mind. When the conversation shifts and focuses only on business, then the duties of social responsibility are referred to as corporate social responsibility (CSR). The present time’s changes in cultural normality have altered the way the old, traditional world of business would have run things, which is why CSR is in the spotlight.
The Pyramid of Corporate Social Responsibility
CSR was broken down and defined in the 20th century by Archie B. Carroll through what is known as the pyramid of corporate social responsibility. This pyramid no longer has a proper place in the modern business world because it simply no longer works.
The pyramid has four layers that highlight key areas: profitability, legality, ethics, and philanthropy. The base, the foundation, and the largest layer of Carroll’s model of the pyramid of CSR is profitability. The lack of equality comes through as not all layers were obligatory. If a corporation did not have profitability, it did not have the foundation to support the next level up the pyramid.
Today’s corporations are being asked to make bigger contributions to their communities, environment, cultures, government, and consumers because they have the profits to do so. No longer does profit come first, but alongside and equal with legality, ethics, and philanthropy efforts.
What is Business Ethics?
Business ethics should not be mistaken as an interchangeable concept with CSR. Ethics in business had its own layer and level above legality on the pyramid of corporate social responsibility. When a business is exercising good business ethics, that means that it is doing the right, ethical thing. When properly engaged, business ethics should govern the business and its people working for it.
The modern age is reorganizing the function of the pyramid of corporate social responsibility. Asking corporations to evenly apply profitability alongside social and environmental conciseness no longer allows profitability to be the base and foundation of the pyramid. Profitability is replaced with business ethics, driving all business action to start at the roots of doing what’s right.
Where is the Tension?
Unfortunately, the corporate sector is experiencing challenges when trying to align business ethics and social responsibility. Some businesses will fail under this new CSR arrangement. The demand for corporations to balance profits with social responsibility and business ethics continues to rise, making it the change businesses cannot ignore, nor can they afford to, thanks to the boom of ethical consumerism.
About Everest Business Funding
If you are a small business owner looking to grow your business and operations, Everest Business Funding can help by providing working capital. They offer a speedy application, approval, and funding process. Whether you require cash for staff, equipment, inventory, marketing, renovations, or any other aspect of your business, Everest Business Funding can offer assistance.