SOCIAL RESPONSIBLITIES OF BUSINESS

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.

IMPORTANCE OF BUSINESS

Business is the most important activity of mankind. The progress of any country depends upon the development of business of that country. Therefore countries like Japan, Korea, England, Germany, USA, etc. are developed through business. The following reasons clearly show the importance of business:
(1) Fulfillment of Human Wants: In the modern time human wants are unlimited. Business fulfills such human wants through the production of goods and services.
(2) Creation of Utility: Business creates various types of utilities in goods so that consumer may use them according to their preferences and needs. The utility may be form utility, place utility, time utility, etc.
(3) Utilization of Natural Resources: Every country has certain natural resources. The business makes it possible to utilize natural resources to their maximum extent. As for example mineral resources are extracted by extracted by extractive industries. After wards they are used by other industries to make different types of useful articles.
(4) Employment Opportunity: The field of business is also important from the viewpoint of employment. Today a lot of people are employed by the development of business. So business contributes a lot in solving the unemployment problem of the country.
(5) Economic Development: The economic development of a country depends upon the development of business. Hence by utilizing the raw materials available in the country if we can develop industrialization, country could be developed. The economic prosperity of a country is judged by the number of large scale business existing in it.
(6) Supply of Quality Goods: The supply of quality goods and services to the consumers at reasonable prices is the responsibility of the business. The business should aim at consumer satisfaction. A business cannot flourish in the long run if it ignores consumers.
(7) Earning Foreign Currency: Business is the major source of earning foreign currency. By the development of business (industry, trade) finished goods can be exported to foreign countries and earn maximum foreign currency. Such foreign currency again can be used in importing necessary goods and services for the development of the country.
(8) Self-Sufficiency: Business can play an important role in making the country self-sufficient. It should produce all those goods, which are imported from outside. A self-reliant country has more prestige in international community.
(9) Increase in Government Revenue: The development of business also increase the government revenue. Industrial and business firms pay excise duty, income tax, sales tax, etc. to the government. As the number of business enterprises increase government revenue also increases.
(10) International Relationship: By the development of industry and trade we can export-import goods with other countries. The people of different countries come in contact with each other. It creates cooperation, understanding and relations among various nations.

FUNCTIONS OF BUSINESS

A business has to perform a number of functions in order to achieve its objectives. One of the major functions of business is to produce goods from raw materials. Similarly transporting goods from the place of production to the market is also another function of business. Hence, the major function of business can be identified as follows:
(1) Organizing Function: One of the major functions or business is organizing function. Man, machine, materials, machines and money are essential factors for any business. So organizing function accumulates and coordinates all the necessary factors of business. Proper organizing function is helpful in the smooth running of the business and helps to achieve its objectives.
(2) Financing Function: Finance is the life-blood of any business. The availability of factors of production depends upon the availability of finance. So every business needs finance for its success. Hence under this function required capital is estimated, accumulated and properly utilized. A proper capital structure according to the size and nature of the business is essential for the success of the business.
(3) Production Function: Production function is another important function of business. Converting raw materials into finished products to satisfy human wants by creating utility is known as production. Under this function raw materials and semi-finished products are processed and assembled to create utility. Hence the next important function of business is to create utility for satisfaction of the consumers by production of goods.
(4) Marketing Function: The function of business is not complete with the production of goods and services only. The main goal of production is to satisfy human wants through the consumption of goods and services. Hence marketing function helps to transfer goods and services from the producer to the ultimate consumer. Marketing functions can be divided into concentrating and dispersing which include buying, selling, transportation, storage, risk taking, market information, etc.
(5) Employment Function: The next important function of business is to provide employment opportunities in the country. Every activities. So they are helpful in solving employment opportunities. Business sector is possibly the largest employment generating sector in the world.
(6) Research and Development: The progress in any field is the result of research and development. In business also research and development is essential for the development of new technologies and new products. By research new production techniques, interest of the consumers, needs of the market, new markets, etc. can be identified. Hence through research and development business can be increased.
The success of any business depends upon the satisfaction of the consumers. Hence giving the priority of consumer satisfaction the above functions of business must be conducted efficiently in order to run business successfully.