The Evolution of Social Responsibility

Social responsibility is a concept with decades-old roots. In the nineteenth century, the prevailing view among U.S. industrialists was that business had only one responsibility: to make a profit. Railroad tycoon William Vanderbilt summed up this attitude when he said, "The public be demand. I'm working for the shareholders." Caveat emptor was the rule of the day--"Let the buyer beware." If you bought a product, you paid the price and took the consequences. No consumer groups or government agencies would help you if the product was defective or caused harm.

By the early twentieth century, reformers were pushing politicians and government regulators to protect citizens from the abuses of big business. Their efforts paid off. Laws were passed to ensure the purity of food and drugs, limit the power of monopolies, and prevent unfair business practices, among other reforms.

The Great Depression, which started in 1929, led to more disenchantment with business. With 25 percent of the work force unemployed, many people lost their faith in capitalism, and pressure mounted for government to fix the system. At the urging of President Franklin D. Roosevelt, Congress passed laws in the 1930s and 1940s to protect workers, consumers, and investors. These laws established the Social Security system, allowed employees to join unions and bargain collectively, set a minimum hourly wage, and limited the length of the workweek. New laws prevented unfair competition and false advertising and started the Securities and Exchange Commission (SEO) to protect investors.

Public confidence in U.S. business revived during World War II, and throughout the 1950s, the relationship between business, government, and society was relatively tranquil.

However, the climate shifted in the 1960s, as activism exploded on four fronts: environmental protection, national defense, consumerism, and civil rights. These movements have drastically altered the way business in conducted in the United States. Many of the changes have been made willingly by socially responsible companies, others have been forced by government action, and still others have come about because of pressure from citizen groups.


Reference
  • Michael H. Mescon, Courtland L. BovĂ©e, John V. Thill, Business Today, 9th edition, Prentice Hall, 1999