Social Responsibility Of Business

Business and society has always been inter-related and inter-dependent. Society depends on business for the fulfillment of it's needs whereas business depends on society for much needed inputs like money and men. The growth of business also depends on society.

Therefore, a business has to undertake various social responsibility to keep the society happy. In short, social responsibility of business means duties and obligations of business towards different social groups i.e. consumers, shareholders, employees, society etc. The concept of social responsibility is applicable to all business irrespective of their size and nature of business.

• According to Steiner George, "Social responsibility is to understand public consensus, to recognize it, and to co-operate in achieving this.  Each business has responsibilities in some way to commensurate with it's power."
• According to Howard R. Bowen, Social responsibility means, "obligation of business 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."

Factors Responsible For Popularity Of Social Responsibility Concept:

• Growing Expectations:
  
  In the current business situation, the expectations of different social groups from the business is growing.  Under the cut-throat competition scenario, an organization finds it difficult to ignore such growing expectations of the society.
• Favorable Image:
  
  Reputation and recognition in the society really helps the business in the long run.  So every organization is looking to create a favorable image of itself in the society.  This can only be achieved by accepting more social responsibility.
• Professional Management:
  
  Most of the modern day organizations have introduced professional management.  Professional management knows the importance of social responsibility thus making it popular.
• Fast Changing Business Environment:
  
  Today, the business environment is changing rapidly and consumers and other social groups have become more aware.  This has put pressure on business to accept social responsibility.
• Realization Of Long Term Benefits:
  
  Businesses today realize that they can expand their business only with the support and co-operation of the entire society.  Now, they show keen interest in assuming social responsibility as they realize it's long term benefits.

Responsibilities Towards Shareholders:

• Business should provide fair return to shareholders as they have invested their money and borne the risk in business.
• Business should keep the enterprise stable and dynamic. They should manage the business in a cost conscious and efficient manner.
• It should make effective and optimum use of shareholders fund.
• It should follow all the legal and procedural formalities while accepting and repaying the deposits.
• A business should pay regular returns to it's shareholders.

Responsibilities Towards Customers/Consumers:

• To satisfy consumer needs and guarantee customer satisfaction.
• To avoid artificial scarcity of goods and services.
• To conduct market research activities.
• To supply goods and services at fair prices to consumers.
• To avoid exploitation of consumers through business malpractices.

Responsibilities Towards Competitors:

• Encourage free, open and healthy competition.
• Avoid using unfair means to eliminate competition.
• Treat your competitors as market players and not enemies.
• Don't adopt policies which would remove competitive element from business.