They should seek their profits in a truly scientific way, and use them for public good. And therefore it should support and improve the society whenever it can. The first task of business enter­prise is to stay in business. The management should encourage the establishment of Consumers’ Advisory Councils and Consumers’ Association should bring their complaints before these councils to be finally handled by the management. Learn about the social responsibility of business towards different sections of society:- 1. Before publishing your Article on this site, please read the following pages: 1. (viii) Promotion of ancillarization and small-scale industries. They should be charged a fair and reasonable price which should be well within their reach. There are certain matters of social policy which go with being in business. The industrial waste should be disposed off carefully or if possible can be recycled to minimise pollution. b. A business is a socio-economic institution which is responsible to various interest groups. These problems can be solved through medical help, and the help of social workers. Voluntary dividend restriction is desirable. Social and Economic Objectives of Business: The purpose of business enterprise is to produce quality goods and distribute them and do it ethically so as to serve the general welfare. The development of human potentiality is so important that it is not wrong to say that “management is the development of people and not the direction of things”. The social responsibility of business in this sphere is great, specially because a major proportion of the rural population is doomed to illnesses, squalid existence in techniques ill-planned and filthy houses. A business is a socio-economic institution which is responsible to various interest groups. Company should strengthen the share prices by its growth, innovation and diversification. 4. It is needless to say that unfair competition enters with extortion, bribery, kick-backs and granting of discriminatory advertising allowances or brokerage fees and these should be avoided at all costs. Profiteering, black-marketing, cornering of supplies, unfair trade practices are curbed and legally prohibited. Responsibility of business towards employees is in the form of training, promotion, proper selection, fair wages, safety, health, worker’s education, comfortable working conditions, participation management etc. The depositors may deposit their savings in the savings account or fixed deposit accounts of the company. (ix) To provide an opportunity for being heard and to redress genuine grievances. One part of Social Responsibility is being responsible to people, for the actions of people and for actions that affect people”, hence it means obligation of business towards different social group, i.e. Responsibility of business towards community and society includes spending a part of profits towards civic and educational facilities. Every enterprise, are either in private or the public sector should make efforts to improve the conditions of the public of the surrounding areas, should arrange employment for unemployed and should help the … Collective bargaining is another right of workers and strikes a sharp edged weapon. The supply of goods should be of uniform standard and of reasonably good quality. They shall not only offer wholehearted support and cooperation in the positive efforts of the company but shall also guide and control properly its policies and activities. Hence, it should develop and improve its business and build up its financial independence. Government 5. Let us take an example. Employees, 2. There is hardly anything that is not adulterated. To conclude, it is suggested that business firms should act on the facts of business. This aspect has to be particularly taken note of by public sector enterprises. It permits the company to attract the necessary capital from the market. Company should provide a fair return on the investment made by shareholders. Fitzgerald KBE & Mandy Cormak (2005), Modesto & Oliveira (2006) & Terziev (2012), attempts to investigate the role of the business organizations in the society and their social responsibility towards. At the same time, they shall appreciate the responsibility of the business to other sections of society – to the workers, consumers and the community. If shareholders do not get proper dividend then they will hesitate to invest additional funds in the concern. Owners, 3. For this purpose, identification of areas needing improvement, facilities, skill requirements and financial assistance may be surveyed by business experts. Better living conditions like housing, transport, canteen, crèches etc. Responsibilities towards Owners/Shareholders, 4. Factors affecting Social Responsibility of Business – Promoters and Top management; Board of directors; Shareholders; Societal Factors The business enterprise must provide security with fair wages to its workers, and an equal opportunity for growth and development within the company. (v) Not to resort to indecent advertisements. Social Responsibility of Business towards Society: There are various interest groups in the society which may affect the functioning of a business organisation. Community, 7. A manager has the following responsibilities towards the government: (ii) To observe rules laid down by the government. So, in addition to giving a fair return on the capital invested and risk taken, the company should supply to its shareholders continuous, comprehensive and accurate reports giving full information about its working. The toxic wastes, excessive noise, chemical pesticides, automobile exhaust etc. Society in general. Therefore, free competition must be allowed to operate and should be encouraged by anti- monopoly legislation. They are called as interest groups because by each and every activity of business, the interest of these groups is affected directly or indirectly. It should then assign social responsibilities to business enterprise through mixture of compulsion and inducement. A manager should help the Government in the development of the country by observing these laws. Despite the popularity of the Marketing Concept and the growing awareness of consumer rights, consumers all over the world are, by and large, dissatisfied. Money-chasing continues to be the economic objective of business. g. Technological changes, rationalisation, modernisation, leading to false notions of mass employment among labour. Environment! Business houses should set up units at those places where sufficient space is available for housing colonies of workers. To be able to discharge its social responsibilities an enterprise must work towards growth, expan­sion and stability. Once the company is viable the consumers’ claim on its profits is the greatest of all. It will sell his goods, commodities and services without adulteration at fair and reasonable prices and. This will enable the company to plough back ample profits for innovation and expansion. 5. “Management should create such a work environment that the workers are not obliged to use their weapon.”. Privacy Policy 8. Equally, they are a support to consumers’ associations which, by investigation and reporting on the comparative prices and quality of products, can assist them in making a more informed choice of their purchases. The responsibility of the organization to the workers include: (ii) The provision of the best possible working conditions; (iii) The establishment of fair work standards and norms; (iv) The provision of labour welfare facilities to the extent possible and desirable; (v) Arrangements for proper training and education of the workers; (vi) Reasonable chances and proper system for accomplishment and promotion; (vii) Proper recognition, appreciation and encouragement of special skills and capabilities of the workers; (viii) The installation of an efficient grievance handling system; (ix) An opportunity for participating in managerial decisions to the extent desirable. The management should encourage the establishment of the Consumers’ Advisory Councils/Committees so that these bodies could represent the grievances of consumers to the management. more Understanding Market Orientation Environment! Managements also, make a contribution to society as a whole by bringing about economic growth and increased prosperity to the nation. ), improving sanitary facilities (through construction of underground drains, cleaning of existing foul water and waste-carrying open drains, improving roads by filling pits and giving them a regular slope, provision of public toilets and bathrooms and maintaining their cleanliness). need to be checked from time to time. (iii) To take appropriate steps to remove the imperfections in the distribution system, including black-marketing or profiteering by middlemen or anti-social elements. Health is another field in which business firms are uniquely convenient agents. Shareholders 2. To provide service benefits such as medical facilities, education to children, retirement benefits, etc. Business depends on society for inputs like money, men, and skills and also for market where products have to be sold to the customers. Unfortunately, both have failed to fulfill their reciprocal obligations because of the following causes: i. Economic-Political and Organisational Factors: b. Monopolism/groupism among all sectors; c. Business’s apathy to change for lack of time and unwillingness; d. Ideological and methodical conflicts and differences between different states; e. Existence of price-cutting, malpractices and unfair trade practices; f. Division of management and labour into two warring groups, one endeavouring to win over the other and. Major responsibility of business towards different sections of society are as : 1. The first half is to manage the business effectively so as to produce a reasonable profit for them, and the second is to see that the shareholders are aware of company’s progress and are satisfied with its progress. To pay a fair return on their capital investment (dividend or interest). If, however, business firms fail to move voluntarily very far their traditional economic role to assume new responsibilities for social problems, social costs, and social benefits, the government should step in. Rehabilitating the population displaced by business units should also De part of responsibly of business? Business should render its responsibilities towards wholesalers, retailers and franchises. regard to companies’ obligations towards all stakeholders, but to their obligations towards society. The Companies Act 1956 also requires company to give full disclosure in the published statements. Workers 6. In 2011, at the EU level a new definition of CSR, based on this idea, was issued. : a. The business generally interacts with owners, investors, employees, suppliers, customers, competitors, government and society. The social responsibilities of business and its economic activities are so intermingled that so far we have discussed the two together. To handle the customer’s grievances promptly. Economic Obligation – Since every business aims to earn profit, it is the responsibility of every business to generate surplus cash and use it towards further development or welfare of the society. From this point of view a manager has the following responsibilities: (i) To contribute towards international peace. Such measures would reduce preventable and water-borne diseases. This can be achieved by effective and profitable production. Business is accountable towards owners as well as managing business profitably, ensuring fair and regular return on capital employed, consolidating financial position of business, guaranteeing capital appreciation so as to enable the owners to withstand any business contingencies. RESPONSIBILITY TOWARDS SOCIETY:- Every business owes an obligation to the society at large. The goods must meet the needs of the consumers of different classes, tastes and the purchasing power; ii. Business can discharge the responsibility of protecting environment in following way: Scarce natural resources should be used very carefully as these are depleting at a very fast rate. PreserveArticles.com is a free service that lets you to preserve your original articles for eternity. At the same time shareholders shall also offer wholehearted support and co-operation to the company to protect their own interests. 4. The business owes great responsibility to the community in various directions. (i) Providing technical know-how and assistance, (iii) Assuring continuous purchase of inputs, (iv) Helping them in expansion and development. Shareholders should be kept fully informed about the working of the company for healthy growth of the business. Businessmen should pay various taxes in time and help government in collecting funds. Let our business enterprise combine public spirit and shrewd business sense and give up exploitation of the workers and consumers. Social responsibility indicates personal responsibility and obligation of managers and employees, as they act in their own interests, to ensure that rights and legitimate interests of others are in no way sacrificed or prejudiced by their behavi­our and actions. Moreover, internal accountability to consumers should be extended. It is sometimes argued by economists as well as by business men accused of neglecting the public interest, that the business of business is just business. To pay a fair return on their capital investment (dividend or interest). Employees 4. They should play a constructive role in encouraging the directors to pursue a responsible policy towards the company, its obligations to the community, employees and customers, upon which in the long run, the company’s reputation and future prospects depend. Content Guidelines The alternative sources can also be found out to save natural resources like to save forests alternative to wood and pulp can be found, the use of coal can be reduced by alternative source of energy. The business depends on society for existence, sustenance and encouragement. (vi) Contributing to research and development. 3. It may be mentioned here that the shareholders also have certain responsibilities, which they have to discharge to protect their own interests. Community involvement in itself can also be socially responsible. Similarly Godrej & Boyce, Shriram Industries and TVS groups are also good employers. Corporate Social Responsibility of Business towards Society Various interest groups in the society by which a business operates may affect its functioning. Government, 5. ‘TATAS’ have been the first to enforce certain laws in favour of employees. Discretionary Responsibility. Owners/Investors 7. To pay fair wages and salaries to the workers and employees. As a businessman is as human as any other human being, he has to participate in human life, and human life is very largely social. The National Industrial Conference Board of America in its Report on ‘Industrial Aid to Education’ has suggested five different forms of educational aid which business can render to the community. Special training should be given to the displaced people apart from the cash compensation usually offered to them. (ix) Providing for their education and training. By producing goods and services efficiently and by fair means, business can contribute to the economic well-being of the community and its social uplift. A model employer is one who does not exploit his employees. To recognize worker’s participation in decisions affecting their working life. Adequate reserves should be built up so that it will be able to declare a reasonable dividend during a lean period as well. Corporate social responsibility (CSR) is a business model that helps a company be socially accountable to itself, its stakeholders, and the public. 3. In this way great wealth can live up to its non-commercial responsibilities. Again, productivity ratio depends as much on education and training of workers as on economic factors. It will participate in the public life of the country in helping to make policies, fair legislation and working on advisory bodies; vii. The problems responsible for ill-health in the rural areas need solution, for they result from no proper health education, unhealthy environment, unclean habits of living, poverty, poor diet and the social culture. Social responsibility is an ethical framework and suggests that an individual has an obligation to work and cooperate with other individuals and organizations for the benefit of society at large. 4. But series of raids conducted on business houses clearly show that businessmen have failed to discharge their responsibility towards government. Their feelings should be given special attention. We will now attempt a summary discussion of the obligations of business separately to itself, to the shareholders, the workers, the consumers and the community. This is based on the fact that the enterprise is an organ of society, and that its actions have a decisive impact on the social scene. (iii) To help in the development of economically backward countries. To inform them about the new products and new uses of the existing products. (iii) Clearance of the principal amount on or before due date. TOS Responsibility of business towards Community or Society or General Public Corporate Social Responsibility in the Digital Era and Cases of Tech firms following CSR; Corporate Social Responsibility for the Tech Firms: A New Ethics for the Digital Age; The Business Case for Sustainability: Why it Pays off to be Clean and Green; Corporate Social Responsibility in Turbulent Times and the Way Forward for Corporates If a business provide a product or service that is useful or otherwise of value to the community, then it is socially desirable that it continues to function. Legislation is required to prevent deception and fraud being practiced on consumers, and where essential goods are in short supply, their fair distribution should be ensured. 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