What is social responsibility of business? Explain the social responsibility of business towards important interest group in the society. |
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| Ans : Every business operates in society. Social responsibility of business is concerned with the fulfillment of some obligations towards society within which it exists and operates. It is the responsibility of business to operate its activities within the rules, regulation and norms of society. There is need of co-relation between business and society for the fulfillment of common objective. It is the reason that business is considered as socio economic activities.
According to Richard Steers,” Social responsibility focuses on what an organization does to society and what is does for society.”
The responsibilities of business towards important interest group in the society are:
A. Towards investors
B. Towards consumers
C. Towards community
D. Towards employees
E. Towards government
A. Towards investors:- Investors are the owner of the business. They invest capital and bear risk of loss. Investors have direct interest in the business welfare and development of business. The main responsibility of business towards investors are as follow:
i) Safety of investment:-The investors invest money in the business and bear this. So, it is the responsibility of business to ensure safety of their capital investment.
ii) Fair and regular return:-The business should provide fair and regular return on investment to their investors in terms of share of profit or dividend.
iii) Correct and regular information:-The business should provide adequate information about the business from time to time to the investors in correct way.
iv) Participation in decision making:- The business should encourage full participation of the investors in the planning and decision making process for capable shareholders.
B. Towards Consumers:- Consumers are the main source of income of a business organization. Consumers satisfaction helps to achieve organizational goal. The responsibility of business towards consumers are as follows:
i) Supply of quality goods:- The supply of quality goods and services to the consumers at a reasonable price is the main responsibility of business. It’s aim should be consumer satisfaction by meeting their changing needs.
ii) Supply of goods in time:- The main objective of business is to supply goods in proper time to fulfill the needs of customers. It is the responsibility of business to supply goods in the market in uniform basis by developing network of distribution. It fulfills time utility of goods and services and overcomes the problem of scarcity.
iii) Supply of goods in proper price:- Business should provide desirable goods and services at proper price. Effort should made to reduce cost in order to reduce price. When price is decreased the demand for the product will increase.
iv) Satisfaction of consumer:- The ultimate aim of business is to supply quality goods and services for the satisfactions of consumers. So that the demand of his product is maintained. Profit is made by satisfying consumers needs. Satisfied consumers are the backbone of business.
C. Towards Community:- Business is operated in a society and it has to considered the necessity to improve the quality of life and contribute towards well-being of the society. The social responsibility of business towards community are as follows:
i) Community welfare programs:- A part from earning profit, business should set community welfare activities such as education, health, cultural, sports, pollution control, etc. in the society.
ii) Protect environment:- Business organization should protect social environment by controlling noise, sound, air, water pollution etc. which may affect the health of public. It should also protect good social relation with society by taking necessary measures to protect the environment.
iii) Generating employment opportunities:- Business provides employment opportunities to the different people at different level of the bases of their skill, knowledge, experience and educational qualification. Right people should be placed at right job. Business helps to generate more employment opportunities.
iv) Utility resources:- Business utilizes both natural and human resources for the economic development of the country. The factors of production (Men, Money, Material, Machines and Management) are carefully utilized for the benefit of society and business itself.
D. Towards Employees:- Employees are the greatest assets of a business. They are directly involve in the production and distribution activities. Employee should be motivated and encouraged for their better performance. The following are the responsibility of business towards their employees:
i) Fair salary and wages:- The employees and workers should be given fair salary and wages considering their skill, performance, knowledge, working hour, position etc.
ii) Job security:- The job of the employees should be secured. Job security will make the employees tension free and they will be able to work with their full efficiency.
iii) Participation in decision making:- There must be system of participation of employees in decision making process. It helps for cost reduction, safety measures, material handering and operating methods.
iv) Welfare of employees:- Employees are directly involve in the production and distribution activities of business. Facilities of proper salary and wages, good working environment, job security, promotion, medical facilities etc. should be provide to the employees.
E. Towards Government:- Government is the agency that governs all the institution and individual in the country. It is responsible for the administration and development work. All the business activities should be conducted as for the rules and regulations of government. Major responsibilities of business towards government are as follows:
i) Follow rule:- Government enacts certain rules, regulation and law for protection and control of business activities. The responsibility of business is to strictly follow the rules made by the government.
ii) Solve national problem:- Business organization should support the government for solving the national problem such as unemployment, poverty, illiteracy, pollution, population growth etc.
iii) Maintain national pride:- Business is one of the most important means to maintain national pride by maintaining international trade. They should maintain the reputation of nation by dealing with standard and high quality products and services.
iv) Payment of tax:- Business organization pays taxes such income tax, custom duty, excise duty etc. to the government. Government utilizes these taxes to develop infrastructure of the country such as transportation, communication, electricity etc.
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