by Tim Peters

Created on: November 13, 2009

Without customers, a business can't profit. Since the 1970s, a concept known as corporate social responsibility has been used to define how businesses incorporate public interests into their practices. While it sounds like a daunting term and can be daunting to properly execute, corporate social responsibility really boils down to one of the oldest business sayings of all time: "Keep your customers happy."

There is no universal standard for assessing what makes a business socially responsible. However, one of the more popular standards involves something called a Triple Bottom Line, often summarized as "People, Planet, Profit." Socially responsible businesses excels in balancing social, economic, and environmental interests internally and externally. It provides goods and services in a such a way that everyone profits with them.

PEOPLE

A socially responsible business does not exploit anyone. It complies with the spirit and letter of the law, offers fair salaries and prices, maintains a hospitable working environment, and supports its related communities and businesses. It raises what Adam Smith referred to as human capital. As he stated regarding beneficial skills learned by people, "those talents, as they make a part of his fortune, so do they likewise of that of the society to which he belongs." Socially responsible businesses play hands-on roles in raising their own human capital as well as that of society.

PLANET

Socially responsible businesses work with the environment, not against it. It is by far the most beneficial long-term policy a business can have, but also the most difficult to enact. A business seeking to minimize its ecological footprint must carefully manage its consumption and waste, as well the environmental impact of its products and services.

PROFIT

Traditional financial profit is not ignored by socially responsible businesses. After all, a business that can't sustain itself also can't sustain its outside interests. However, a socially responsible business does take into account how much others profit from its practices. Both internal profits and societal profits need to be treated equally.

Corporate social responsibility is an acceptance of free trade, not a hindrance of it. If businesses really want to maximize their long-term profits, why not do everything possible to ensure that there will always be people to run it? Why should businesses be responsible only to its current shareholders and not generations of future shareholders? Why should businesses think small? Socially responsible businesses don't ask these questions. They're the ones that will succeed not by confronting their customers, but by working with them.

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