Future Business Leaders of America (FBLA) Entrepreneurship Practice Test

If a small business contributes resources to the community which improves the quality of life, it is fulfilling which area of social responsibility?

1. Legal Responsibility

2. Ethical Responsibility

3. Philanthropic Responsibility

4. Economic Responsibility

The correct answer is: Philanthropic Responsibility

A small business that contributes resources to the community to improve quality of life is demonstrating philanthropic responsibility. This area of social responsibility focuses on the voluntary actions businesses take to benefit society, beyond their core operations and legal obligations. Philanthropic efforts can include charitable donations, community service, and initiatives aimed at enhancing social welfare. The other areas of social responsibility differ in focus. Legal responsibility refers to a business’s obligation to follow laws and regulations, ensuring that their operations are compliant with legal standards. Ethical responsibility involves the company’s commitment to conduct its operations in a manner that is fair, just, and respects stakeholder rights, essentially going beyond mere legal requirements. Economic responsibility pertains to a business's duty to be profitable and provide economic value to its stakeholders. While these aspects are important, they do not specifically capture the essence of contributing to the community for the sake of enhancing quality of life, which is inherently philanthropic in nature.