Every
business enterprise is an integral part of the society. It uses the scarce
resources of the
society to continue and grow. Hence, it is important that no activity of
business is injurious
to the long run interests of the society. However, it is observed that, in
practice, there
are a few socially undesirable aspects of business such as, polluting the
environment, non-payment
of taxes, manufacturing and selling adulterated products, giving misleading advertisement
and so on. This has resulted in the development of the concept of social responsibility
of business whereby the owners and managers of business are made conscious about
the responsibilities of their business towards the community and its customers,
workers etc.
MEANING
OF SOCIAL RESPONSIBILITY
Social
responsibility of business refers to the obligation of business enterprises to
adopt policies
and plans of actions that are desirable in terms of the expectation, values and interest
of the society. It ensures that the interests of different groups of the public
are not adversely
affected by the decisions and policies of the business.
SOCIAL RESPONSIBILITIES TOWARDS DIFFERENT GROUPS
It
needs to be noted that the responsibilities of those who manage the business
cannot be limited
to the owners. They have to take into account the expectations of other
stakeholders like
the workers, the consumers, the government and the community and public at
large.
Let
us now look at the responsibilities of the business towards all these groups.
(a) Responsibility
towards the shareholders or owners: The shareholders or owners are
those who invest their money in the business. They should be provided with a
fair return
on their investment. You know that in case of companies it takes the
form Business dividends.
It has to be ensured that the rate of dividend is commensurable with the risk involved
and the earnings made. Besides dividends, the shareholders also expect an appreciation
in the value of shares. This is governed primarily by company’s performance.
(b)
Responsibility towards the Employees: A business enterprise must ensure a fair wage
or salary to the workers based on the nature of work involved and the
prevailing rates
in the market. The working conditions must be good in respect of safety,
medical facilities,
canteen, housing, leave and retirement benefits etc. They should also be paid reasonable
amount of bonus based on the business earnings. Preferably, there should also
be a provision for their participation in management
(c)
Responsibility towards the Consumers: A business enterprise must supply quality goods
and services to the consumers at reasonable prices. It should avoid adulteration, poor
packaging, misleading and dishonest advertising, and ensure proper arrangement for
attending to customer complaints and grievances.
(d)
Responsibility towards the Government: A business enterprise must follow the guidelines
of the government while setting up the business. It should conduct the business in lawful
manner, pay the taxes honestly and on time. It should not indulge in any corrupt
practices or unlawful activities.
(e)
Responsibility towards the Community:
Every business is a part and parcel of our
community. So it should contribute towards the general welfare of the
community.
It
should preserve and promote social and cultural values, generate employment opportunity
and contribute towards the upliftment of weaker sections of the society. It must
take every step to protect the physical and ecological environment of the
society. It
should contribute to the community development programmers like public health care,
sports, cultural programmers.
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