Explain the factors, beginning in the late 1960s, that led to a public outcry for business to be more socially responsible

Question

What will be an ideal response?

Answer 1

The expression of public concern has resulted in part from three factors:
1. The complexity and interdependence of a postindustrial society. No individual or business is an island unto itself. If a company builds a chemical plant in Bhopal, India, and its primary purpose is to make profits for its shareholders, can it be held responsible to the public that lives around the plant when there is a gas leak? The public is dependent on the firm's good conduct, and the firm is dependent on the public and its political representatives to supply labor, an adequate water supply, tax forgiveness, roads, and so on.
2. Political influence that has translated public outcry for socially responsible conduct into government regulation. Whether a malfunction occurs at a nuclear plant at Three Mile Island or a human disaster is caused by a gas leak in Bhopal, India, the political arm of government at all levels sees the solution as more regulation. This attitude pleases the government's constituents and makes its officials more electable.
3. Philosophical differences about what the obligations of business should be. Neoclassical economic theory would argue that the sole purpose of business is to make a profit for its investing shareholders, who, in turn, reinvest, creating expanded or new businesses that employ more people, thus creating a higher standard of living.