Thursday, March 4, 2010


Every business organization operates in the society. It uses society's resources and sells its production to the society and earns profit. Business and society are meant and exist for each other. Without the help of society business cannot be operated. Business is required to meet the varied needs of the society. It can exist only if it fulfills its responsibility towards the society in the socially a manner. Hence, fulfilling the responsibility towards society is the social responsibility of business. Every business organization must share his prosperity with those members of the society who have helped the business to prosper.
Social responsibility may be defined as the obligation of an organization to protect and enhance society within which the organization operates. According to Keith Davis and Robert L. Blomstorm, "Social responsibility refers to the obligation of decision makers to take actions which protect and improve the welfare of society as a whole along with their own interests".
Every business should think that profit is his remuneration but social service is his main duty. Profit through service is the basis of the concept of social responsibility of business. Hence according to social responsibility of business, following services are to be performed towards the various sections of society.
(1) Towards Shareholders or Investors: Shareholders are the owners of business who invest capital and bear risks. Thus, a business owes a special responsibility towards itself. The responsibilities of business/organization towards them are:
a. Provide fair return or dividend regularly to the owners.
b. Maximization of the net present value of the business.
c. Ensuring full participation of owners in the management.
d. Providing accurate and comprehensive reports and financial information.
e. Provide safety to their investment.
f. Business resources should be fully utilized without any wastage.

Owners also have certain responsibilities, which they have to discharge to protect their own interests. They should whole-heartedly support and cooperate in the positive efforts of the organization. At the same time, they should appreciate the responsibility of the business to other sections of society to the employees, consumers' community and the government.
(2) Towards Employees (Workers): Th employees are the greatest assets of a business. The success of an organization depends to a very large extent on the morale and whole hearted cooperation of the employees. The responsibilities to the employees are:
a. Security of job with fair wages, bonus, profit sharing, etc.
b. Fair selection, training and promotion within the organization.
c. Providing good working condition and secured working environment.
d. Encouraging participative management.
e. Encouraging to develop good trade union leadership.
f. Developing an efficient grievance handling system.
g. Proper recognition, appreciation and encouragement of special skills and capabilities of the workers.

(3) Towards Consumers: The organization cannot be successful unless it satisfies the consumers. Consumer satisfaction is the key to satisfying business goals. The main responsibilities towards consumers are:
a. Understanding consumer needs and to take necessary steps to satisfy these needs.
b. Improving the efficiency of the organization so as to:(i) increase productivity and reduce prices, (ii) improve quality, and (iii) make goods easily available in the right quantity and at the right time.
c. Supplying goods of high quality at reasonable prices.
d. Providing after-sales-services.
e. Conducting research and development to improve quality and introduce new products.
f. Avoiding restrictive trade practices and other undesirable methods to exploit the consumers.
g. Handling customers' complaints and inquiries very carefully and analyzing these objectives.

(4) Towards Community (Society): The existence of an organization depends on the well wishes of the whole community. Hence, it has a lot of responsibility to the community. These responsibilities are:
a. Maintaining environmental ecology and adopting antipollution measures.
b. Producing goods and services efficiently and contributing to the economic well-being of the society.
c. Taking steps to conserve scarce resources and developing alternatives, wherever possible.
d. Assisting in the overall development of the locality.
e. Creating employment opportunities in the society.
f. Participating in social welfare programs such as promotion of education, medical facilities, and population control.
g. Encouraging voluntary organizations engaged in improvement of the weaker sections.

(5) Towards Government: Business activities cannot be performed properly without the protection of the government who is also the best protector of social welfare. It should be conducted according to the rules and regulations of the government. The obligations of business organization to the government are:
a. Strictly following the provisions of the various laws and enactment.
b. Paying taxes regularly and honestly to the government.
c. Supporting the government in its efforts to solve national problems such as unemployment, inflation and regional imbalance in economic development.
d. Voluntarily support in Government efforts aimed at improving the quality of life.
e. Helping the government to stop black-marketing.
In fact government has also the responsibility to create adequate business environment. The government has to develop the necessary infrastructure, adequate rules and regulations, provide facilities and encourage genuine entrepreneurs, and attract productive investments for developing healthy business environment.

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