Social obligation of business

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There were arguments that obligation of business is to maximize long term profit for shareholders in a sustainable way, while others call them to involve more to social responses. Each judgment has its own reasons which this research sought to analyze. Based on that, certain social obligations of business will be addressed with evidences, showing their necessary of being more responsible to social outcomes.

Key words: corporate social obligation, shareholders, corporate profit, social responsibility


There has been a long debate on the role of business in society.
Some people agreed with argument of: “The social obligation of business is to sustainably maximize long-term profits for shareholders.
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In cases where corporate profit and social benefit aligned, CSR might not be considered and therefore irrelevant. Or in other cases where corporate profits and social welfares are opposite, then the profit will be taken into consideration, as business management will always want to prioritize shareholder’s interest.
An example for this is the Vedan Seasoning Manufacturing company in Vietnam where they disposed a large volume (5,000m3/day) of untreated waste water to the Thi Vai River which caused water pollution for the surrounding environment. If the management applied the advanced and automatic treatment system for waste water, which therefore improve waste water quality before discharging to environment then a large share of the investment would cut their profit down, which not all shareholders preferred.
Another example is about salary increasing for staff. Some textile corporations in industrial zones of Binh Duong province (Vietnam) had their workers working overtime to complete urgent garment export contracts. In these cases the managements always had to take into consideration whether they will higher much salary for workers or pay them with small extra amount and keep their profit portions unchanged in their book. Most of the time, the latter choice had been being decided.

Corporate Social Responsible AND corporate profit?

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