Social Responsibilities of Business

Private business which is the hard core of this economic system, has realized by several social economic and political forces that it has social obligation to fulfill besides ensuring its own existence through profitable activity. There is no denying the fact that part of this realization is not genuine and takes the form of mere lip service which is thought necessary to ensure the survival of private enterprises. But it cannot denied also that private business does partly realize and recognize the hare reality that a privately owned firm cannot meet the challenge of socialism and allied doctrines unless it sets its house in order changes its outlook and is prepared to play its legitimate role as an organ of society. It will be useful here to go into some of the forces and factors which have persuaded businessmen’s concern with social responsibilities. Some of the more important among them are:

The threat of public regulation of private ownership.

The pressure of the labour movement.

The development of moral values and social standards applicable of businessmen.

The development of business education and contacts with the government and its problems.

Recognition of human factors contributing to the long-term interests of business.

The development of a professional managerial class with a different motivation and point of view due to the separation of ownership from management in the corporate enterprise.

The increased complexity of the decision-making processes in which many persons participate and in which various points of view and diverse interest are expressed.

The change in public opinion about the role of business in modern society.

These and a number of other social, ethical and economic forces have combined together to make business a socio-economic activity. Business is no longer a mere occupation; it is an economic institution operating, in social environment.

One may even go to the extent of asseting that a business enterprise is a trust of the community which must discharge its obligations towards the various sections of the community. Some of the specific responsibilities of business may be outlined as under:

The enterprise and the shareholders: In the first place, corporate business must provide a fair return on capital to shareholders and must provide them with regular, accurate, full information about the working of the enterprise. The shareholders should also meet their obligations by evincing keen interest in company affairs.

The enterprise and the workers: It is the responsibility of the management to provide opportunities to the workers for meaningful work. Also, the management of a business should try to win the cooperation of the workers to provide recognition to the workers unions, accept the workers right to associate, and to help them to develop their own leadership in the union through education. Social security, profit sharing, fair promotions, proper grievance settlement, and employee welfare are some of the other well recognized responsibilities of business firm to their employees.

The enterprise and the consumers: A business enterprise has the responsibility of providing the goods and other services needed by the community at the most reasonable possible price. It must guard against adulteration, poor quality, lack of service and courtesy of customers, misleading and dishonest advertising, etc.

The enterprises and the community: An enterprise must respect the law and pay taxes regularly and honestly. It must behave as a good citizen and take care to avoid bad effluents, smoky chimneys, ugly buildings, and devote attention to housing and workers living conditions. It has the responsibility of maintaining proper relations with the community through the press and its meetings.