Corporate responsibility is also known as corporate social responsibility, responsible business, corporate citizenship etc. It is a form of corporate self-regulation integrated into business. This means that business itself would monitor and ensure its adherence to law, ethical standard and international norms.
Every business must undertake the responsibility for the impact of its activities on the environment, consumers, employees, communities and stakeholders. It should proactively promote public interest and avoid practices that harm their growth and development, irrespective of the legal angle.
The Erin Brockovich case which ended in the largest settlement in U.S history has been made popular by the Julia Robert’s movie based on the same person. The Pacific Gas and Electric Company had to pay a whopping $333 million for contaminating the ground water with hexavalent chromium and causing various disorders to those living in the area. Money cannot compensate for the damage that has been done as some health problems are irreversible. The imposition of Government regulations, tariffs, environmental restrictions and restrictions on exploitation of labour ensures corporate responsibility. Added to this, consumers are increasingly aware of the environmental and social implications of their day to day consumer decisions. This further motivates corporates to maintain responsible business.
Incorporating responsibility turns out profitable for businesses as public support is mandatory for them to widen their prospects in the market, in this age of Global competition. Thus, corporate social responsibility ensures the inclusion of public interests into corporate decision making.