Social Responsibilities of Business - Meaning and Reasons

We all know about the economic objectives of the business, by these objectives business can not survive but Social Responsibilities of Business also play a very important role in the business. Business is a major part of society so it must try to build up society.

Concept of Social Responsibilities:

For contributing to the social well-being a businessman does voluntary efforts. This is also known as Corporate social responsibility.

Definitions of social responsibilities:

"The idea of social responsibilities supposes that the corporation has not only economic and legal obligations but also certain responsibilities to society which extend beyond these obligations."

- Joseph W. Mcguire

"Social Responsibilities of the business implies that the businessmen's decisions and actions are taken for reasons at least partially beyond the firm's direct economic or technical interest."

-Keith Davis

"Social Responsibilities requires managers to consider whether their action is likely to promote the public good, to advance the basic beliefs of our society, to contribute to its stability, strength, and harmony."

-Peter F. Drucker

Reasons to perform social responsibilities:

1. Self-interest: 

Businessmen earn by performing social responsibilities. To survive and grow in society for a long period the business has to serve according to the expectations of the members of the society.

2. Good Environment for business:

Social responsibility creates a good environment for the business and improves the quality of life, the standard of living, so businesses will get good people to run the business. The better quality labor, better quality customers, and society will be better so by this business will get better opportunities.

3. Contribution to social problems:

Businessmen must take initiative to resolve the problems arising in society. There are some social issues like pollution, the creation of unsafe workplaces, etc. so this is the duty and we can say the obligation of the businessmen to solve such kinds of social problems.

4. Public image:

Businesses can improve their image by performing social responsibilities. If employees feel satisfied with their workplace, customers feel better to buy the product then it will give a big hike to the business which will give success to the business.

5. Avoidance of government interference:

Social responsibilities are very important for the business if there is any activity found related to black marketing, and businessmen avoid responsibilities towards social welfare. Then businesses could suffer from a huge loss and the government can impose fines or strict action against the business.

6. Resources used for moral justification:

The business has various resources such as money, expertise in technical work, finance. So the business can help society to solve the problems related to social differences by setting up industries in backward areas with employment opportunities.

There are some other main factors that have forced businessmen to consider their social responsibilities :

1. labor movements (trade unions, labor unionism) have forced the businessmen to take care of labor rewards and welfare for their efficiency. Because now the labor force is well educated and having knowledge about the labor welfare laws etc.
2. All the customers, investors, employees are well educated and more sensitive towards social issues so, the businessmen cannot ignore the social responsibilities towards them.
3. Today's business organizations are realized that they can survive in the market for the long term if they contribute to society by participating in welfare activities.
   For example, the generation of employment, to educate poor children, clean and green projects for the environment, plantation projects, shelters for homeless people, etc.

 Some important social responsibilities  towards different groups:

1. Responsibilities of business towards consumers: Nowadays business firms have direct contact with their customers so business performs fair trade practices towards the customers to increase the satisfaction level of the customers. Because once the customer is retained it will give long-term benefits to the business. So business performs social obligations towards the customers like to ensure regular supply of products, to handle consumer complaints quickly, being truthful in all transactions.
2.  Responsibilities towards the government: Business performs social responsibilities towards the government in the following ways:

         a) Payment of taxes on time. b) Obeying rules and laws made by the government. c) cooperation with the government in planning and administrative activities.

     3.Responsibilities towards the suppliers: To pay a fair price of goods, maintain healthy business relationships, provide information related to the changing environment, give a guarantee of a minimum price.

     4. Responsibilities towards the investors: full and factual information disclosed to the shareholders, and the persons who are directly and indirectly invest in the business, provide a fair return on investment, maintain healthy relations with investors.

5. Responsibilities towards the local society: It includes the development of lower/backward society people, helps the people of the society in case of natural calamities, generates employment opportunities, provides financial aid for the education to the poor section of the society.

6. Responsibilities towards the employees: provide job security first so that employees feel secure regarding his/her carrier, give clarity about the management objectives and also encourage the employees to participate in the decision-making process, fair and equitable treatment for all employees of the organization, no favoritism, etc.

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