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Social Responsibility of Business, 29, SOCIAL RESPONSIBILITY, OF, BUSINESS, LEARNING OBJECTIVES, After studying this chapter, you should be able to know, Concept of Social Obligation., Responsibilities towards Different Interest Groups., SYNOPSIS, aail, Introduction, 1. Concept of Social Obligation, Case for Social Responsibility Towards Different, Interest Groups, 2., 3. Recent Development, 4. Conclusion, 5. Key Terms, 6. Exercises, Scanned by CamScanner

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Business Organization - (B.Com. – )- (Nag, U, त्य, 30, INTRODUCTION, Business is a socio-economic activity. It has certain social obligations. The, obligations are towards different social groups. Business can function by puk, consent, because the basic purpose of business is to meet the needs of the socis, in which it operates. From this, arose the concept of social obligation of busines, 1. CONCEPT OF SOCIAL OBLIGATION, Meaning and Need, Corporate social responsibility has been influenced by two major concepts, stakeholders model, wherein it is recognised that good business practices entail, engaging all stakeholders in company's business. So good business is not onl, maximising shareholder value but also stakeholder value. The other concept j, triple bottom line, where companies would no longer be judged by conventional, single i.e. financial bottomline, but also on their performance in social and, environmental bottomlines. Corporate social responsibility can be defined as, operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business. It is viewed as a, comprehensive set of policies, practices and programmes that are integrated, throughout business operations and decision making processes that are, supported and rewarded by top management., According to European Union, it is a concept that an enterprise is, accountable for its impact on all relevant stakeholders. It is continuing, commitment by business to behave fairly and responsibly, contribute to economic, development while improving the quality of life of the workforce and their familie, as well as local community and society at large., Social responsibility is the commitment of business to contribute to, sustainable economic development working with employees and their families, the local community and society at large to improve their quality of lit, that are good for business and good for development., In simple terms, Mahatma Gandhi's vision "wealth created from society has, to be ploughed back into society" is the simplest definition. The definition has, evolved from the concept of charity, philanthropy and giving back to society to, sustainability. It means improvement of quality of life of all the stakeholders., Social responsibility covers the following areas :, What do you mean by social responsibility?, in ways, Areas of Social Responsibility, Environmental, Business, Responsibility, Responsibility, Respecting human, rights, Employee welfare, Compliance with, tax laws, Respect for, environment and, environment friendly, technologies, Material and water in, eco-friendly manner, Environment pollution, control, Investing in, scieno, developing, and technology, Fostering ethical, trade practices, Transparent, financial reporting, Consumer protection, Respect for national, sovereignty, Sharing resources with, underprivileged, Investing in sustainable, development programmes, for the community, Rectifying environmental, damage, Treating waste, Preservation of bio, diversity, Promoting and, implementing an, environmental policy, Fig. 2.1, Scanned by CamScanner

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Social Responsibility of Business, 31, Main Social Obligations of Businessman, 1. Supply and Maintenance of the quality of product and/or service, A business enterprise should supply quality goods and services to the, consumers and maintain its quality., 2. Fixing reasonable and fair price, Business enterprises should offer their goods and services at fair and, reasonable prices., 3. Identifying customer's needs, Businessmen need to identify consumer's needs with a view to offering the, consumers the desired goods and services., 4. Proper Utilisation of resources, A business firm should make proper utilisation of resources by avoiding, waste in the interest of the society. Thus, valuable resources can be conserved for, the use of future generations., 5. Fulfilment of social and moral obligations towards the government and, competitors :, a) Regular and prompt payment of taxes etc to the government;, b) Providing financial support to social and cultural activities and thus repay, the social debt, contributing liberally to social activities such, education, rural uplift and development., as, 6. Maintaining Ecological balance, They. should carefully maintain ecological balance by taking necessary, pollution control measures such as anti-pollution devices and spreading, awareness., NEED OF SOCIAL OBLIGATION, A business organisation is a social organisation. It is a part of the society. It, cannot be separated from the society. A business organisation depends on society, for its financial requirements. Hence, it has got responsibility towards society., Merely maximisation of profits shouldn't be the sole objective of business firm., There should be a reconciliation between the objectives of maximisation of profits, and social responsibility., Need of social obligation arises due to the following :, 1. Protection of Environment, A business organisation uses natural resources and human resources, for production of goods and services. These resources should not be misused., The organisation should prevent environmental pollution and ecological, imbalance., 2. Public Image, It is necessary for the organisation to create favourable image in the minds of, the public. The image of the organisation can be brightened by discharging social, responsibilities effectively. The organisation which cares for its employees,, consumers and shareholders is held in high esteem., Scanned by CamScanner

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Business Organization - (B.Com. -1)- (Nag. Uni, 32, Need, Protection of Environment, Public Image', Fear of Government restrictions, • Trusteeship, Long term Self - Interest, • Pressure of Trade Union, Pressure from Consumer movement, • Assistance to the Government, Moral responsibility, 3. Fear of Government Restrictions, A business organisation should operate within the legal and moral framework, as well as social limits. The organisation which violates these limits attracts strict, control from the government. Hence, it is necessary for the organisations to, operate within the limits prescribed., 4. Trusteeship, The concept of trusteeship is closely associated with social responsibility. The, organisations should manage the resources as trustees. Hence, social welfare, should be given prime importance., 5. Long term Self Interest, A business organisation serves its long term self interest by discharging its, social responsibility. A business organisation may not be able to earn profits if, the social responsibility, may not contribute to the organisation and tonsumers may not buy the goods., 6. Change in Public Expectations, Business activities are regularly monitored by the society. If there is any, deficiency, the society can withdraw its support. Hence, the organisation should, respond to the expectations of the society. It should not do anything which is, harmful to the interest of the society., ignored, the employees may not work, shareholders, 7. Pressure of Trade Union, The organisation should not undertake its responsibility towards its, employees due to the pressure of the trade union. Trade union can exercise, pressure on the management if fair wages are not paid to the employees. As a, result the relations between the management and the employees spoil. Hence,, before any demand arises, the company should understand its responsibility and, take steps accordingly., 8., Pressure from Consumer Movements, Consumer movements are gaining ground in India. Today consumers are well, organised. They cannot tolerate any injustice caused by the organisation. Hence,, the organisation should see that there are no malpractices followed which affect, the interest of the consumers adversely. Goods of good quality should be supplied, to the consumers at reasonable prices., 9. Assistance to the Government, The Government is overburdened with social economic and political problems, on the one hand and financial crunch on the other hand. The government, expected to provide all the facilities to the society. Business organisations shoule, come forward to extend financial assistance to the government and help solve, social, economic and political problems., Scanned by CamScanner

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Social Responsibility of Business, 33, 10. Moral Responsibility, It is the moral responsibility of the business organisations to undertake, various schemes of social well being., What is the need of social obligation?, 2. CASE FOR SOCIAL RESPONSIBILITY TOWARDS DIFFERENT INTEREST, GROUPS, Business community is a part and parcel of the society, a socio-economic, institution and hence, it has to meet the social needs. It is not an end in itself. It, has to discharge its responsibilities sincerely towards the society. It has to' meet, the economic needs and has to work for maximisation of social welfare. The, society provides various facilities to a business enterprise. The government also, provides an orderly atmosphere so that commercial activities can be performed, smoothly. In return, the businessmen attend to social needs. They have to adopt, human approach in discharging their social responsibilities. Now it has been, clearly recognised that business does have important responsibilities to different, interest groups., Fig. 2.2 : Social responsibility towards different interest groups, A. Responsibilities Towards Employees :, Responsibilitles towards employees, Job Security, • Monetary incentives, • Proper Personnel Policies, Working Conditions, • Medical Check up, Labour participation in management, Grievance procedure, Recognition of union, Education and Traning, Cordial relațions, Scanned by CamScanner