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One of the challenges explained in case of social responsibility is the issue of choosing between profits and welfare. These aspects are crucial and also at times, there are huge opportunity costs involved. CSR leads to value creation incorporated into business strategy and developing human capital and integrates business into the community. It also inspires and motivates the employees to give in their best as they are required to give better quality and additional value to the customers and so societal welfare is extremely crucial in a business organization.
The implementation of any societal welfare measure requires investment of time, effort and money. In case of a joint stock company, shareholders form an extremely important part of the organization. They are its true owners and highest possible returns on their investments is an important duty of the management. But in order to be socially responsible organizations have to let go of a small part of this profits. It has been explained in theory that society has given a business all of the required resources and infrastructure for carrying out the business and so it is necessary that they give back to the society (Chin, MK, Hambrick, DC and Treviño, LK 2013).
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