Social Responsibility of a business can simply be defined as activities that a business conducts over and above the statutory requirements of a business for the benefit and welfare of the society.
According to Howard R. Bowen “Social Responsibility of business refers to the obligation of business to pursue those policies, to make those decisions or to follow those lines of action which are desirable in terms of objectives and values of the society”
The obligation that every business is subjected to can be divided into four responsibilities –
Discretionary Obligation – These refer to voluntary contributions made by a business for the benefit of the society without any government intervention.
Ethical Obligation – These obligations make a business responsible to follow and respect the social and cultural norms laid down by the society.
Legal Obligation – It is the responsibility of every business to abide with the laws of the county and follow the legal rules and regulations laid down by the government.
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.
Factors affecting Social Responsibility of Business –
- Promoters and Top management
- Board of directors
- Shareholders
- Societal Factors
- Industry and Trade Associations
- Government and Legal System
- Political Influences
- Competitors
- Resources
Social Responsibility towards different groups/sections in the society
Towards Shareholders –
- To ensure safety of their investment
- Regular payment of dividend and Timely payment of loans
- To provide adequate information before investment
- To ensure a good public image
- To make good and profitable decisions to give a good return on investment
Towards Employees –
- Payment of Fair wages
- Providing a good working environment
- Providing proper training and education
- Providing fair performance appraisal and career growth opportunities
- Providing opportunity to participate in management decision making
- Providing adequate grievance handling, recreational and retirement facilities.
Towards Consumers –
- To provide goods and services at a reasonable price
- To ensure good quality in products
- To introduce new and innovative products by proper research and development
- To not mislead the customer
- To provide adequate information about the product
- To provide good after sale services
Towards Society –
- To take measures for maintaining environmental harmony
- To raise the standard of living of the society
- To help in development of backward areas and promote small scale industries
- To help in economic development of the society
- To conserve the natural resources of the country
- To follow the norms and traditions laid down by the society
- To maintain a fairness and equity in recruitment and compensation of manpower
Towards Competitors –
- To have a healthy competitive spirit
- To not use unfair means to succeed in business
- To not harm or defame the competitors
- To not copy competitors strategy
Towards Government –
- Timely payment of taxes and duties
- To not involve in corruption
- To follow the norms and guidelines laid down by the government
- To follow the legal system of the country
- To support the government in its public welfare initiatives
Towards Suppliers/Creditors –
- To make regular orders for purchase
- To deal on fair terms and conditions
- To Have a fair credit policy
- Timely payment of dues
Indeed a great post.
Companies has too many things to handle but one thing which is most important to do is to take care of our environment. Recently Amazon fire was in news and it shook the world. Many people were sad and were willing to do anything to save it. Similarly there were few companies which decided to do something for environment. It created an impact on people mind that people are ready to change themselves.