Which concept requires businesses to be aware of the impact their decisions have on others?

The concept of social responsibility emphasizes that businesses have an obligation to consider the impact of their decisions on various stakeholders, including employees, customers, suppliers, the community, and the environment. Social responsibility encourages companies to operate in ways that enhance society and contribute to the welfare of the public, rather than solely focusing on profit generation.

By recognizing their social responsibility, businesses aim to balance profit-making activities with the well-being of society at large. This might include ethical practices in sourcing materials, ensuring fair labor practices, engaging in community service, and minimizing environmental harm. Such awareness can foster trust and loyalty among consumers, enhance brand reputation, and ultimately support long-term business success.

In contrast, corporate governance primarily deals with the structures and processes for decision-making within companies, focusing on accountability and control rather than the broader impacts of decisions. Market competition concerns the dynamics between businesses striving for market share without specifically addressing their societal impact. Profit maximization, while a common objective for many businesses, often overlooks the ethical implications of decisions made solely in pursuit of financial gain. Therefore, understanding and implementing social responsibility is crucial for businesses in today's interconnected world.