Legal responsibility indicates that organizations must fulfill their economic objectives within the legal framework requirements. Ethical responsibility requires the organizations to follow the moral rules. Discretionary responsibility incorporates those activities of an organization that are not mandated, not required by law, and not expected of organizations in an ethical sense (cf. Carroll, 1979, p. 500). For instance, organizations fulfill their discretionary responsibility by providing a day-care center for working mothers. (Maignan and Ferrell, 2000, p. 283)
Corporate social responsibility (CSR) is an approach to business activities encompassing the basic questions relating to the role and purpose organizations play in the society. Central to this approach is the pledge to the so-called triple bottom-line of economic, social and environmental concerns. As per the principle of CSR, business must recognize that they get legitimacy to do business in society and must account for their social and environmental impact accordingly. As the business organizations are operating in the society, so the businesses must give something back to the society. By the same token, it is expected that business concerns will behave responsibly and will not engage in any activities that will cause harm to the society. NGOs and other campaigning organizations are putting pressure on certain Multinational companies, especially those engaged in hazardous activities like biological, mining, chemical and oil sectors. Nevertheless, in spite of the pressure from NGOs, promotion of CSR activities within the business practices of the organizations is also very strong. Some of the advantages for integrating CSR principles encompass reduction of risk, higher satisfaction among employees, low employee turnover and securing long-term financial performance. (Susan, 2003, P. 130)
Organizations have noticed that social responsibility is good for their business for, and from, each part of the seven main azimuths within which they carry out their business activities. These parts are their shareholders and potential investors; managers; employees; customers; business partners and contractors or suppliers; the natural environment; and the communities within which they operate, including national governments. (Michael, 2003, P. 4). The social performance of an organization is a very crucial factor for the overall success of a business entity. If an organization engages in activities that adversely affect the environment, the environmentalists will surely speak against the organization that will badly affect the social performance of the organization. Furthermore, poor social performance will drive away potential investors. In today's increasingly competitive business world no business concern will want to loose the confidence of its potential investors.
Today consumers avoid what they consider as socially irresponsibly made products or products of businesses that have allegedly not acted in the best interest of the society. (Michael, 2003, P. 3). It stands to reason that no business concern will surely take the risk of loosing its customer by acting against the interest of the s