A century ago, society expected businesses to meet their economic and legal responsibilities and little else. Today, however, when society judges whether businesses are socially responsible, ethical and discretionary responsibilities are considerably more important than they used to be.
Historically, economic responsibility, making a profit by producing a product or service valued by society, has been a business’s most basic social responsibility. Organizations that don’t meet their financial and economic expectations come under tremendous pressure.
Legal responsibility is the expectation that companies will obey a society’s laws and regulations as they try to meet their economic responsibilities.
Ethical responsibility is society’s expectation that organizations will not violate accepted principles of right and wrong when conducting their business. Because different stakeholders may disagree about what is or is not ethical, meeting ethical responsibilities is more difficult than meeting economic or legal responsibilities.
Discretionary responsibilities pertain to the social roles that businesses play in society beyond their economic, legal, and ethical responsibilities.