Mellorando
Banned
A business Enterprise is not profit oriented alone; it is also set up to contribute to the welfare of the people in his environment. The concept of social responsibility in relation to business means that the firm functions to accomplish its financial objectives and serves the society as well. No business exists in isolation. Every organ of the society contributes towards the success of a business. Thus it becomes imperative that business too does something for the society in return. This responsibility of business towards the society is called social responsibility.
A socially responsible firm should not work solely for profit maximization but should also seek the welfare of different sections of the society. Social responsibility of business refers to its obligations to take those decisions and perform those actions which are acceptable in terms of the objectives and values of the society. “ Social
responsibility of business refers to the obligations of businessmen’s decisions and actions taken for reasons at least partially beyond the firm’s direct economic and technical interest. “Social responsibility is to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society.”
The following reasons have been laid down to explain the significance of social responsibility for a business enterprise:
1. Long-Term Interest:
It is in the long-term interest of the business to discharge its social obligations by serving different interest groups such as employees, consumers, government and citizens. Wise business persons know that unless they serve the society by fulfilling its needs, they will not be able to climb the success ladder. Working for the society, stakeholders and government helps an organization in establishing a strong public image. On the other hand, a business organization with vested selfish interests may get ignored by the society.
2. Indebted to Society:
A business uses the resources of the society for its functioning. Hence, it becomes obligatory for it to pay back its dues by serving the society. Businessmen should tend to the needs of the society and use its resources for community welfare. This practice ultimately helps the organization in establishing itself on the strong foundation of a pleased society and a cooperative labour force.
3. Social Power:
Business persons are endowed with a lot of social power. They have the potential to change the destiny of the population by collectively deciding for the country on crucial issues such as rate of economic progress, distribution of income among different income groups etc. Ideally, business persons should take up social responsibilities in proportion to their social power. If the business enterprise misuses its social powers for selfish motives, the society can intervene via government controls and other laws. Therefore, it is morally right for a business to embrace its social obligations and discharge them loyally.
4. Public Image:
A business devoted towards fulfilling its social responsibilities is regarded highly by the society. Good rapport with employees, suppliers, customers and government helps in building a favourable public image of the business enterprise. Moreover, a socially responsible organization is considered trustworthy by the shareholders and investors.
5. Social Awareness:
These days, employees and customers are more informed about their rights. While consumers expect the seller to abide by the fair trade practices, workers want fair wages and other employee benefits. If the expectations of these interest groups are not met, they may resort to either anti-social activities or seek help from trade unions and consumer courts. This will lead to industrial turmoil and unrest within the society which is harmful for proper functioning of the business.
6. To Avoid Government Intervention:
If a business organization fails to acknowledge and perform its social duties, it is bound to lose its freedom and flexibility in the long-run. The Consumer Protection Act and other legislations passed by the government safeguard the interest of the customers against business persons indulging in black-marketing, adulteration, hoarding and many other illegal trade practices. Since, government intervention is not welcomed by business enterprises, social duties should be voluntarily carried out by all the organizations to avoid such situations.
7. Law and Order:
A peaceful society is congenial to the expansion of business. Unable to withstand exploitation by the business enterprises, the weaker sections can rebel and take the law and order in their hands. As a result, the survival of the business can be threatened.
8. Moral Justification:
A business possesses resources such as finance and talent pool to help bail out troubled masses out of social issues like poverty, dowry, unemployment and illiteracy by organizing special campaigns and programs. Additionally, business houses can assist the government in solving many other issues like lack of foreign exchange etc. Moreover, business organizations increase pollution by releasing untreated sewage into the environment. Thus, it is a moral obligation of the business to render its services in tackling these issues.
9. Socio-Cultural Norms:
India has a rich legacy of business values passed down by the legendary and morally upright business owners like Ratan Tata, Azim Premji, etc. Only those business persons who sincerely abide by the canon of business will get the privilege of being honored by the citizens and the government. Hence, the business should aim to promote equal opportunity and maintain healthy inter-personal relations with all the stakeholders such as customers, employees to carve a niche for itself as a honest enterprise.
A socially responsible firm should not work solely for profit maximization but should also seek the welfare of different sections of the society. Social responsibility of business refers to its obligations to take those decisions and perform those actions which are acceptable in terms of the objectives and values of the society. “ Social
responsibility of business refers to the obligations of businessmen’s decisions and actions taken for reasons at least partially beyond the firm’s direct economic and technical interest. “Social responsibility is to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society.”
The following reasons have been laid down to explain the significance of social responsibility for a business enterprise:
1. Long-Term Interest:
It is in the long-term interest of the business to discharge its social obligations by serving different interest groups such as employees, consumers, government and citizens. Wise business persons know that unless they serve the society by fulfilling its needs, they will not be able to climb the success ladder. Working for the society, stakeholders and government helps an organization in establishing a strong public image. On the other hand, a business organization with vested selfish interests may get ignored by the society.
2. Indebted to Society:
A business uses the resources of the society for its functioning. Hence, it becomes obligatory for it to pay back its dues by serving the society. Businessmen should tend to the needs of the society and use its resources for community welfare. This practice ultimately helps the organization in establishing itself on the strong foundation of a pleased society and a cooperative labour force.
3. Social Power:
Business persons are endowed with a lot of social power. They have the potential to change the destiny of the population by collectively deciding for the country on crucial issues such as rate of economic progress, distribution of income among different income groups etc. Ideally, business persons should take up social responsibilities in proportion to their social power. If the business enterprise misuses its social powers for selfish motives, the society can intervene via government controls and other laws. Therefore, it is morally right for a business to embrace its social obligations and discharge them loyally.
4. Public Image:
A business devoted towards fulfilling its social responsibilities is regarded highly by the society. Good rapport with employees, suppliers, customers and government helps in building a favourable public image of the business enterprise. Moreover, a socially responsible organization is considered trustworthy by the shareholders and investors.
5. Social Awareness:
These days, employees and customers are more informed about their rights. While consumers expect the seller to abide by the fair trade practices, workers want fair wages and other employee benefits. If the expectations of these interest groups are not met, they may resort to either anti-social activities or seek help from trade unions and consumer courts. This will lead to industrial turmoil and unrest within the society which is harmful for proper functioning of the business.
6. To Avoid Government Intervention:
If a business organization fails to acknowledge and perform its social duties, it is bound to lose its freedom and flexibility in the long-run. The Consumer Protection Act and other legislations passed by the government safeguard the interest of the customers against business persons indulging in black-marketing, adulteration, hoarding and many other illegal trade practices. Since, government intervention is not welcomed by business enterprises, social duties should be voluntarily carried out by all the organizations to avoid such situations.
7. Law and Order:
A peaceful society is congenial to the expansion of business. Unable to withstand exploitation by the business enterprises, the weaker sections can rebel and take the law and order in their hands. As a result, the survival of the business can be threatened.
8. Moral Justification:
A business possesses resources such as finance and talent pool to help bail out troubled masses out of social issues like poverty, dowry, unemployment and illiteracy by organizing special campaigns and programs. Additionally, business houses can assist the government in solving many other issues like lack of foreign exchange etc. Moreover, business organizations increase pollution by releasing untreated sewage into the environment. Thus, it is a moral obligation of the business to render its services in tackling these issues.
9. Socio-Cultural Norms:
India has a rich legacy of business values passed down by the legendary and morally upright business owners like Ratan Tata, Azim Premji, etc. Only those business persons who sincerely abide by the canon of business will get the privilege of being honored by the citizens and the government. Hence, the business should aim to promote equal opportunity and maintain healthy inter-personal relations with all the stakeholders such as customers, employees to carve a niche for itself as a honest enterprise.