Bachelor of General Studies (BGS) Degree Practice Exam

What characterizes socially responsible businesses?

1. Maximizing shareholder profits only

2. Ignoring legal obligations

3. Balancing economic, legal, and social obligations

4. Focusing only on community engagement

The correct answer is: Balancing economic, legal, and social obligations

Socially responsible businesses are characterized by their commitment to balancing economic, legal, and social obligations. This holistic approach means that these businesses not only aim to be profitable but also ensure they comply with laws and regulations while actively considering the impact of their operations on society and the environment. By integrating social welfare into their business strategies, they strive to contribute positively to communities and manage stakeholder expectations. This approach reflects a recognition that a company's long-term success is intertwined with the well-being of the society in which it operates. It encompasses various aspects, such as ethical labor practices, environmental sustainability, and community development. Such a balance is essential for fostering trust and loyalty among consumers, employees, and shareholders alike. In contrast, prioritizing solely shareholder profits overlooks the broader implications of business practices, while ignoring legal obligations could lead to reputational damage and legal consequences. Focusing exclusively on community engagement, on the other hand, neglects the economic and legal dimensions, which are also crucial for a well-rounded socially responsible business framework.