The Importance Of Social Innovation

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Social innovation as the word explains is the implementation of activities and products in order to meet the social needs of the society, or in other words is the means of giving back to the society. Two main topics within it are social responsibility and business ethics. Gallego-Álvarez, I., Prado-Lorenzo, J. & García-Sánchez, I. 2011, explain how social innovation and corporate social responsibility (CSR) highly rely on each other with a view that in order to be sustainable the adoption of innovation is required to be “energy efficient” and help reduce over consumption of resources. On the other hand the requirement of innovation isn’t as much as the customers are willing to choose them in any situation which is why CSR can be implemented at a minimal level. Various theories have been discussed “such as the Agency Theory” where in the agency problem takes a toll implying a wrong use of company resources and benefiting only the managers while Freeman (1984) holds out an argument to explain that along with the interest of the management, other participants of the company such as the customers, workers, related companies and suppliers interests should be focused on as well which highlights the Stakeholder Theory that emphasizes on looking after interests of various other stakeholders as well while focusing on the organization in order to have continuous support by these interest groups. The Stewardship Theory highlights the fact that organizations should take up decisions

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