Due mainly to globalization and the widespread use of modern technology, corporations have become far more influential in the world than many governments. With profit serving as a narrow goal and a lack of truly enforceable oversight, the power these firms hold over many communities in the world can result in devastating consequences for people all over the globe. Because self-regulating firms can and do have difficulty coping with their power, a sense of corporate responsibility must impact the behavior of these firms more than a drive for profit.
Corporate responsibility involves the leaders of these businesses considering the impact of their firms’ policies on their consumers, their employees, and the communities in which they operate. From economic to environmental and health issues, an attitude of corporate responsibility ensures companies will minimize their negative impact on society by addressing all the costs of doing business instead of displacing those costs onto society through extremely unhealthy, often damaging practices.
Most unfortunately, an unethical competitor can undermine socially responsible firms and a culture of corporate responsibility across entire industries by failing to account for broader costs. Socially responsible businesses may incur larger costs or lose out on opportunities to profit, because they consider the costs associated with their operations that do not directly impact their bottom line. By looking at short-term gains, unscrupulous firms can expand their market share or drive their competitors to offer lower prices, thus making them unprofitable.
On the other hand, showing loyalty and commitment to those affected by a firm will likely help bolster that company’s reputation. Given enough time, a responsible corporation can build a strong following with employees and customers willing to work harder to support their company. In the long run, the costs for a corporation’s irresponsible behavior will undermine its success while the attitudes of its leadership will spread throughout its business culture to cause employees to engage in even more detrimental behavior.
In time, the harmful behavior of corporations will invite unwanted attacks against these companies and their industries. While firms must spend billions on lobbying to resist government regulation, abusive behavior toward consumers and their communities eventually forces the hands of legislators. Those companies not playing fair will then have to pay an even greater price than those already looking out for the interests of others. In all, being a responsible corporation can be costly at times, yet that firm will see a stronger base of support while a lack of responsibility creates far higher costs for everyone.