Social Responsibility Of Business
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social responsibility of business

Introduction of Social Responsibility

In your daily life, you perform a number of activities. For example, brushing your teeth, listening to your parents, showing respect to elders obeying traffic rules on road etc.

Why do you perform all these activities? It is because you live in a family as well as

This is true in case of business also. As we know, every business operates within a society. It uses the resources of the society and depends on the society for its functioning. This creates an obligation on the part of business to look after the welfare of society.

Social responsibility of business refers to all such duties and obligations of business directed towards the welfare of society.

Let us take an example. A drug-manufacturing firm undertakes extensive research and thus, produces drugs which are qualitatively superior. It also provides scholarships or fellowships to the family members of its employees for studying abroad. We find, in both the cases, the drug-manufacturing firm is carrying out its social responsibility. In case of the former, it is a part of its routine business function while in the latter case it is a welfare function


Why Should The Business Be Responsible

Public Image - The activities of business towards the welfare of the society earn goodwill and reputation for the business. The earnings of business also depend upon the public image of its activities. Again, good public image also attracts honest and competent employees to work with such employers.

Government Regulation - To avoid government regulations businessmen should discharge their duties voluntarily. For example, if any business firm pollutes the environment it will naturally come under strict government regulation, which may ultimately force the firm to close down its business. Instead, the business firm should engage itself in maintaining a pollution free environment.

Survival and Growth -Every business is a part of the society. So for its survival and growth, support from the society is very much essential. Business utilizes the available resources like power, water, land, roads, etc. of the society. So it should be the responsibility of every business to spend a part of its profit for the welfare of the society.

Employee satisfaction - Besides getting good salary and working in a healthy atmosphere, employees also expect other facilities like proper accommodation, transportation, education and training. The employers should try to fulfill all the expectation of the employees because employee satisfaction is directly related to productivity For example, if business spends money on training of the employees, it will have more efficient people to work and thus, earn more profit.

Consumer Awareness - Now-a-days consumers have become very conscious about their rights. They protest against the supply of inferior and harmful products by forming different groups. This has made it obligatory for the business to protect the interest of

the consumers by providing quality products at the most competitive price.


The business generally interacts with owners, investors, employees, suppliers, customers, competitors, government and society. They are called as interest groups because by each and every activity of business, the interest of these groups is affected directly or indirectly.

· Business

· Investors

· Employees

· Government

· Competitors Society

· Customers

· Suppliers

Responsibility towards owners

Owners are the persons who own the business. They contribute capital and bear the business risks. The primary responsibilities of business towards its owners are to:

· Run the business efficiently.

· Proper utilisation of capital and other resources.

· Growth and appreciation of capital.

· Regular and fair return on capital invested.

Responsibility towards investors

Investors are those who provide finance by way of investment in debentures, bonds, deposits etc. Banks, financial institutions, and investing public are all included in this category. The responsibilities of business towards its investors are:

· Ensuring safety of their investment,

· Regular payment of interest,

· Timely repayment of principal amount.

Responsibility towards employees

Business needs employees or workers to work for it. These employees put their best effort for the benefit of the business. So it is the prime responsibility of every business to take care of the interest of their employees. If the employees are satisfied and efficient, then the only business can be successful. The responsibilities of business towards its employees include:

· Timely and regular payment of wages and salaries.

· Proper working conditions and welfare amenities.

· Opportunity for better career prospects.

· Job security as well as social security like facilities of provident fund, group insurance, pension, retirement benefits, etc.

· Better living conditions like housing, transport, canteen, crèches etc.

· Timely training and development.

Responsibility towards suppliers

Suppliers are businessmen who supply raw materials and other items required by manufacturers and traders. Certain suppliers, called distributors, supply finished products to the consumers. The responsibilities of business towards these suppliers are:

· Giving regular orders for purchase of goods.

· Dealing on fair terms and conditions.

· Availing reasonable credit period.

· Timely payment of dues.


Responsibility towards customers

No business can survive without the support of customers. As a part of the responsibility of business towards them the business should provide the following facilities:

· Products and services must be able to take care of the needs of the customers.

· Products and services must be qualitative

· There must be regularity in supply of goods and services

· Business Studies

· Price of the goods and services should be reasonable and affordable.

· All the advantages and disadvantages of the product as well as procedure to use

· the products must be informed do the customers.

· There must be proper after-sales service.

· Grievances of the consumers, if any, must be settled quickly.

· Unfair means like under weighing the product, adulteration, etc. must be avoided.

Responsibility towards competitors

Competitors are the other businessmen or organizations involved in a similar type of business.

Existence of competition helps the business in becoming more dynamic and innovative so as to make itself better than its competitors. It also sometimes encourages the business to indulge in negative activities like resorting to unfair trade practices. The responsibilities of business towards its competitors are

· Not to offer exceptionally high sales commission to distributers, agents etc.

· Not to offer to customers heavy discounts and /or free products in every sale.

· Not to defame competitors through false or ambiguous advertisements.

Responsibility towards government

Business activities are governed by the rules and regulations framed by the government. The various responsibilities of business towards government are:

· Setting up units as per guidelines of government

· Payment of fees, duties and taxes regularly as well as honestly.

· Not to indulge in monopolistic and restrictive trade practices.

· Conforming to pollution control norms set up by government.

· h. Not to indulge in corruption through bribing and other unlawful activities.

Responsibility towards society

A society consists of individuals, groups, organizations, families etc. They all are the members of the society. They interact with each other and are also dependent on each other in almost all activities. Thus, it has certain responsibilities towards society, which may be as follows:

· to help the weaker and backward sections of the society

· to preserve and promote social and cultural values

· to generate employment

· to protect the environment

· to conserve natural resources and wildlife

· to promote sports and culture

· to provide assistance in the field of developmental research on education, medical science, technology etc.

· Protection of environment.

· Better living conditions like housing, transport, canteen, crèches etc.

· Promotion of sports and culture.

· Opportunity for better career prospects

· Regular supply of goods and services

· Proper working conditions and welfare amenities

· Goods and services at reasonable and affordable price.

· Prompt after sales services.

· Conservation of natural resources and wildlife.

Social values - refer to the general recognition in society about which acts are good and desirable on the part of people and which acts are not. In relation to business, social values of business may indicate:

· The characteristics of good business;

· Objectives which are desirable for business to follow; and

· The manner in which business activities should be conducted in the interest of society.

For example, we consider it bad, if any business indulges itself in selling adulterated goods or charging higher price or polluting the environment. Thus, social values of the business form the base for social responsibilities

Ethics- refers to conduct and activities of people based on moral principles. Honesty, truthfulness, compassion, sympathy, feeling of brotherhood etc. are considered ethical.

Business can also be guided by certain moral principles say, running the business without adopting unfair practices, being honest and truthful about quality of goods, charging fair prices, abiding to laws, paying taxes, duties and fees to the government honestly. Businessmen should charge only fair price for the goods and services supplied


Environmental Pollution and Role of Business

To preserve the society it is important to protect the environment. And, therefore, every business must take measures to protect the environment rather than damaging it. In this section let us learn more about different types of environmental pollution and role of business.

Environmental pollution is of three types:

· Air pollution,

· Water pollution, and

· Land Pollution.

Air Pollution

Air pollution refers to the presence of any unwanted gases, dust particles etc. in the air, that can cause damage to people as well as nature.

Causes of Air Pollution

Let us know how air gets polluted. Pollution simply means presence of any unwanted substance that creates inconvenience in the natural behaviour of living and non-living matter.

Social Responsibilities of Business

· Emission of smoke dust and chemicals from manufacturing plants.

· Emission of gases and dust arising from atomic plants

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