Business and Society

Introduction
Business is the cornerstone of prosperity in society: companies create the resources that permit social development and welfare. This write-up describes the role of business in society, both in Nigeria and elsewhere. It shows how companies, through their commercial operations, actively contribute to progress in society.

The question has been asked severally whether there is a clear distinction between what we call the ‘civic involvement’ of companies and what is known as corporate social responsibility, or CSR. Civic involvement relates largely to the extent to which companies need to cultivate and safeguard their relationships with various stakeholders. We describe the ways in which stakeholders influence business operations and the extents to which they achieve this.

Corporate Social Responsibility is a less broad concept than civic involvement. Even though there is no set, internationally accepted definition, this is often described as a voluntary responsibility that transcends the demands of national legislation and encompasses human rights and environmental and social issues. Another definition of CSR uses sustainable development as a starting point. In practice, CSR means that businesses meet the demands of national legislation and, where this is inadequate, look in addition to a collection of established, fundamental freedoms and rights that are globally recognised.

This write up aims to stimulate an attitude among businesses that is thoughtful, ambitious and farsighted as far as norms and values are concerned. We also want to increase awareness of the role of businesses in society and the importance of acting in harmony with social norms. This report does not, however, include any recommendations to member companies that they should handle these issues in any particular way. Each company must develop its own way of working.

The Role of Business in Society
The basic objective of business is to develop, produce and supply goods and services to customers. This has to be done in such a way as to allow companies to make a profit, which in turn demands far more than just skills in companies’ own fields and processes.


Astute entrepreneurs often demonstrate an almost intuitive understanding of the synergies that create success. The social skills of company owners, together with relationships maintained with customers, suppliers and other business people, are always vital if companies are to be run well and developed with a view to the future.
Companies improve their resources by developing materials and ideas. The goods and services produced must meet demands made by customers, other companies or public institutions if companies are to survive. Profitability results when customers are prepared to pay more for goods and services than it costs to produce them.

The ability to produce this kind of added value – profit – is the basic prerequisite for business, but it is also a foundation for prosperity in society. Only profitable companies are sustainable in the long term and capable of creating goods, services, processes, return on capital, work opportunities and a tax base. This is what business does better than any other sector. Hence, companies’ basic commercial operations are the primary benefit they bring to society.

The role of business in the development of society can be described in many ways. For a company to progress and develop, it must nurture relations with its stakeholders, of which there may be many. Some have a strong influence and are of fundamental importance to the survival of the company: these include employees, customers and suppliers. The media, authorities, trade unions and local residents are other stakeholders with a wide-ranging influence.

Corporate social responsibility is a form of corporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. The goal of CSR is to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Furthermore, CSR-focused businesses would proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality.

The long-term survival of companies is partly dependent on maintaining relationships of trust. Deterioration of such relationships will jeopardise the ongoing development of the company. Experience shows that companies with an international outlook, which are open and adopt the long-term approach, are often best at maintaining relationships and hence at developing their operations.

The ability to constantly go on improving products and processes is a basic prerequisite. Companies that want to keep developing have to be receptive to signals from and opinions expressed by the market, staff and the general public. Now that more and more customers – and stakeholders as well – are making demands of companies’ ethical, social and environmental awareness, it is also natural for companies to be receptive to these issues and actively use them in their operations.

Society’s values and current levels of knowledge are reflected in companies’ activities, and companies are judged according to current standards. Companies have always had to interpret society’s moods or else go out of business. Companies have always had to adapt to fit in with values and norms. Then on top of these are the formal regulations that all companies, be they private and public, have to observe.
It is very much in the interests of any company to be ‘a good corporate citizen’.

Companies that have a clear identity and clear business concepts often find it easier to handle and integrate ethical and social values and to take the environment into account. Having clear business objectives makes it easier to formulate and implement goals based on values and norms both within the company and among the general public.