Understanding the social responsibility puzzle

Abstract In our pluralistic society, business is influenced by all other groups in the system, and business in turn, influences them. Therefore, the businessman must be socially responsible for his actions. Mr. Davis explains why such responsibility has had recent emphasis. Not only are the parts of modern society more interdependent, but the social sciences are giving us new knowledge about how business affects the other parts. Also, in modern business, with ownership and control separated, managerial responsibility must be identified and directed. The power-responsibility equation (social responsibilities of businessmen arise from the amount of social power they have) clarifies managerial obligations. Business, in the long run, to maintain its position of power, must accept its responsibility to the whole of society.