SOCIAL RESPONSIBILITY OF BUSINESS

SOCIAL RESPONSIBILITY OF BUSINESS

Social Responsibility: A number of significant changes are taking place in social, economic, political and other aspects. The role of business is being re-examined in the light of these developments. There is a call for social consciousness on the part of business. It is heartening to note that some big business houses are paying attention to the social cause. There is an effort to improve the quality of goods supplied to the society. The research and development programs are directed to find out ways and means for improving the quality of living of the society.

The main responsibility of business is of its owners. Beside owners, business should evolve a balance in the interests of employees, customers, suppliers, government and the general public.

Social responsibility refers to the obligations and duties of business to the society.

“The social responsibility is the obligation of the decision makers to take actions which protect and improve the welfare of the society as a whole, along with their own interest.” Howard R. Bowen

FACTORS RESPONSIBLE FOR SOCIAL RESPONSIBILITY___________




Market Force
Govt.
Intervention
Emergence
Of Professional Growth
Managers of Trade Public
Union Scrutiny

RESPONSIBILITY OF BUSINESS TOWARDS DIFFERENT SECTIONS

SHARE HOLDERS


EMPLOYEES


GOVERNMENT


CONSUMERS


COMMUNITY


Share Holders: An enterprise should provide a fair returns on the investment made by the shareholders. This is essential to encourage them for providing further funds to the company, if necessary.

The shareholders should be provided with correct information about the company, so that they are able to understand the real position of the enterprise. The company act requires management, to give full disclosure in the form of published statement. For healthy growth of business, shareholders may be kept fully informed about the working of the undertaking.

Employees: Management should understand the role of employees in a proper perspective. It is only possible with the wholehearted co-operation of employees for any business to achieve success. The employees are conscious of there right. They demand a share in the profit of the company. The representatives of employees are being made members of Board of Directors. This helps to know the viewpoint of workers and making them a party in decisions.The workers may be offered incentives, additional wages for raising their performance.

Business should look after the mental, physical, economic and cultural satisfaction of the employees. When business looks after the welfare of employees, they will also work whole-heartedly for its prosperity.


Government: Govt is to ensure the best of available natural resources for the welfare of the society. This is possible only with the help of business. Govt sets priorities for the development of the country. Business should not hesitate to enter fields of national importance even if these are less profitable.

The govt forms number of legislations proper regulation and control of business. Business representatives should convey their viewpoint to the govt on such measures and should help it in making these laws successful.

Numbers of taxes are imposed by govt on business for collecting revenue. Business should pay it in time.

Consumers: Business has to serve consumers, by making available required goods and services. The goods produced by the business should be reasonably priced and of good quality. There should not be substitutes for genuine products.

Business unit should study the wants and needs of consumers and manufacture goods accordingly. If it neglects the consumer, it will neglect itself.

Community: The development of business brings number of problems. If these problems are not been taken care, they will affect the society. The industrial waste creates problem of environmental pollution and causes diseases and death. It is the duty of every industry to dispose off its waste in such a way that it does not harm the society.

The business should set a part of the profits, to spend on civic and education, which reduces the burden on govt.

Measuring Social Responsiveness

The various categories for measuring the social responsiveness of organizations are:(What should be measured?)

Ø Contributions
Ø Fund-raising
Ø Volunteerism
Ø Recycling
Ø Valuing diversity
Ø Direct corporate investment
Ø Quality of Work life
Ø Attention to consumers
Ø Pollution Control

Social audits can be carried out to measure these categories of SR.


MERITS:

1. Creation Of Society: Society and business are benefited when there is symbiotic relationship between the two. Business helps in the creation of society through economic development and provision of employment. Any business is set up to produce goods and provide services to the society since business is a part and parcel of society. It must think of social obligation.

2. Long Term Interests Of Business: The performance of society obligation by a business will not only be in the interest of the society but in its own interest also. It increases the profitability of the business in many ways. It also enhances the Goodwill of the company.

3. Moral justification: There is a feeling among businessmen that it is their moral responsibility to help society to over come its problems.

4. Socio-cultural Norms: Business works against traditional values will face resistance and criticism from the society and will be compelled to change its attitude.

5. Useful to Owner’s Interests: Any business enterprise realizes its social responsibilities will protect owner’s interest also. Public will have a good opinion about that enterprise, which are responsible to social obligations.

6. Minimize Government Restrictions: It leads to minimize the government’s restriction on the organization. This gives them grater freedom and flexibility in their operations.

7. Moral of the Employees: It also helps to enhance the moral of the employees, as they will also have the feeling that through this, they can also help the society and can do some social work.

DEMERITS

1. Diverting From Business Objective: Business unit, starts with the main aim of profit maximization, should concentrate on that objective. The involvement of business in social work will divert its attention from its main path. Moreover, it will involve large sum of money and affect the financial position of a concern.

2. Increase in Prices: The money spends on social welfare, will be charged by way of increased prices of goods and services. So, ultimately, it is the consumer who bears the burden of social obligation.

3. Influencing Social Set-up: This influence of business on society may create many social, economic and political problems.

4. Lack of Understanding Skills: Business devotes all its energies in running his unit smoothly and efficiently. It may not be able to tackle social problems properly. It may not have the required skill in solving complex of social problems.

5. Lack of Accountability: The management of business is accountable to the owners for its performance. They are not accountable to anyone for its social obligation. It will not be possible to control the social performance of a business.


CONCLUSION: After whole discussion, we can say that, a business has to deal with society. So it fulfills its social obligation. It is said that SR decreases the profit but it is wrong because it improves the images of organisation and increase its profit by more sale. Economic concern and social concern are not different from each other rather with cooperation of these two concerns; a business can increases its profitability.







Realistic view of Business Responsibility
. He believed that the interest of employees and management were closely linked. He therefore devised the profit-sharing plan under which Bonuses were given productive employees i.e., by production or by suggestion.

3. Henry Robinson Towne: He was president of Yale & Towne manufacturing company and a Mechanical Engineer. He emphasized the need to consider Management as separate field of study on the same level as engineering.