Coupon Accepted Successfully!



Concept of Social Responsibility
Social responsibility of business deals with taking those decisions and performing those actions that benefit the society. By assuming social responsibility, the business enterprise not only respects the aspirations of the society but also helps in implementing these aspirations along with their profit interest. This is in contrast to the common notion in the society that business exists only for profit maximization and not for the welfare of the public. It follows that a responsible business must act with due concern for the effects on the lives of other people. Accordingly we can say that social responsibility is broader than legal responsibility of business. Legal responsibility is fulfilled by mere compliance with the law. But social responsibility follows obligations laid down by law along with part of business which benefits the society.

Need for Social Responsibility
The concept of social responsibility is essentially an ethical issue, since there raises a question of the firm's responsibilities. It is considered to be a voluntary action on the part of the business person who decides whether to take up or not to take up any such responsibilities. They also enjoy their freedom of deciding the extent to which they would like to serve various sections of society. Not all business people feel equally responsible towards society

Arguments for Social Responsibility Justification for Existence and Growth:
The prosperity and growth of business is possible only through continuous service to society. Though, profit motive is an important justification for undertaking business activity, it should be looked upon as an outcome of service to the people. Thus, assumption of social responsibility by business provides justifications for its existence and growth. Long-term interest of the firm, Avoidance of government regulation, Maintenance of society, Availability of resources with business, Converting problems into opportunities, Better environment for doing business, Holding business responsible for social problems were the major points that were discussed in detail in this chapter.

Arguments against Social Responsibility
Violation of profit maximization objective, Burden on consumers, Lack of social skills and Lack of broad public support were the major points that were discussed as the arguments against Social responsibility.

Reality of Social Responsibility
On the basis of the above arguments for and against social responsibility, one may wonder what the businessmen do in reality. The most important recent change in the attitude of business people has been the realization towards social obligations besides ensuring their own existence through profitable activity. Sometimes this realization is not genuine and is just quoted for the survival of private enterprise. But at the same time it cannot be denied that private business does realize and recognise that people in the democratic society have certain human rights and therefore, can demand responsible conduct from the business. Unless the business is prepared to play its legitimate role as an organ of society, it has little chance of success.

Kinds of Social Responsibility
Social responsibility of business can broadly be divided into four categories, which are as follows:
  1. Economic responsibility,
  2. Legal responsibility,
  3. Ethical responsibility,
  4. Discretionary responsibility were the categories that were dealt with in detail in this chapter.
Social Responsibility towards different Interest Groups
It is important to know to whom and for what the business and its management are responsible. A business unit has to decide in which areas it should carry out social goals. Some of the specific responsibilities and enterprise were also explained well to the students.

Business and Environmental Protection
Protection of the environment is a serious issue that confronts business managers and decision makers. The environment comprises both natural and man-made. These resources are natural resources like land, water, air, fauna and flora and raw materials; or man-made resources such as cultural heritage, socioeconomic institutions and the people. It is a fact that the quality of the environment is fast deteriorating particularly due to industrial activity.

Causes of Pollution
It must be recognised that all sectors of our society viz., industry, government, agriculture, mining, energy, transportation, construction, and consumers generate waste. Wastes contain pollutants which are the materials of chemicals that have been discarded during the process of production or consumption. Among the various sources of pollution, industry is a major generator of waste in terms of both its quantity and toxicity. Business activities such as production, distribution, transport, storage, consumption of goods and services are known to be the most critical sources of environmental pollution problems. Many business enterprises have been responsible for causing
  1. air,
  2. water
  3. land, and
  4. noise pollution
Need for Pollution Control
Pollution prevention or control is needed to preserve precious environmental resources and to improve the environmental quality. The amount of damage to a particular medium (air, water, land) varies according to the type of pollutant, the amount of pollutant disposed of, and the distance from the source of pollution. But all pollutants alter the quality of the environment and render it, to some degree, unfit to preserve normal life.

Role of Business in Environmental Protection
Since the quality of the environment is important for all of us, we have a collective responsibility to protect it from being spoiled. Whether it is government, business enterprises, consumers, workers, or other members of society, each one can do something to stop polluting the environment. Government can enact laws to ban hazardous products.

Business Ethics
From the social point of view, business exists to supply goods and services to the people and from the individual point of view; the primary objective of a business firm is to earn profit. Business enterprises are run by human beings whose decisions and actions may not always be in accordance with the expectations of society. An enterprise may be good in terms of economic performance (like revenue, costs and profits) but poor in terms of social performance like supplying products of reasonable quality and at reasonable prices. Business enterprises are products of and are influenced by society and have to interpret and adjust to the preferences or values of society. The concepts of business ethics and the elements of business ethics were also explained well to the students.

Test Your Skills Now!
Take a Quiz now
Reviewer Name