What is Social Responsibility?
Social responsibility is a moral obligation on a company or an individual to take decisions or actions that is in favour and useful to society. Social responsibility in business is commonly known as Corporate Social Responsibility or CSR. For any company, this responsibility indicates that they acknowledge and appreciate the goals of the society, and therefore, would support them to achieve these goals.
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Advantages of Social Responsibility
A company can boost its morale and enhance work culture when they can engage their employees with some social causes. There are many factors that can have a positive impact on the business while delivering social responsibilities. Such few factors are
- Justification for existence and growth
- The long-term interest of the firm
- Avoidance of government regulation
- Maintenance of society
- Availability of resources with business
- Converting problems into opportunities
- A better environment for doing business
- Holding business responsible for social problems
Disadvantages of Social Responsibility
Like there are many advantages of social responsibility there are similarly many disadvantages for business. Few factors are mentioned below.
- Violation of profit maximization objective
- Burden on consumers
- Lack of social skills
- Lack of broad public support
Types of Social Responsibilities
Following Are the Different Types of Social Responsibilities:
(1) Economic Responsibility
- Every business is engaged in economic activities.
- So, the prime social responsibility of every business should be economic responsibility.
- Hence they should sell products and service which can satisfy the need of the society.
(2) Legal Responsibility
- The company should comply with the political and legal environment of the country.
- The company should consider protecting the environment.
(3) Ethical Responsibility
- This type of responsibility expects a certain type of behaviour or conduct from the company.
- This behaviour may not be documented by law.
(4) Discretionary Responsibility
- These are voluntary actions taken by the entities in case of natural calamities, helping poor people etc.
- They help them by providing a charitable contribution, education activities etc.
- It prevents investments of charitable funds into speculative activities.
Opinions in Favour of Social Responsibilities:
Following Are the Opinions in Favour of Social Responsibilities:
(1) Justification for Existence and Growth
- Good quality products help in expansion of the business.
- When the business organisation keeps on providing good quality products, it’s actually a fulfillment of social responsibility.
(2) Long Term Interest of the Business
- Every business wants long term profits and gains.
- If increasing no. Of stakeholders are not giving their best, there may be the withdrawal of cooperation of society.
- It can be noted that the public image of the business can be improved by focusing on social goals.
(3) Avoidance of Government Regulations
- Good social behaviour is an ethical aspect of the business. They are beyond the law.
- Business entities avoid government regulations as it their freedom.
(4) Maintenance of Society
- The business should take social responsibilities.
- However, the law is not made for every situation.
- People who are against the organisation can come into conflict. They can also harm the organisation.
- This situation can create criminal intent in society.
(5) Availability of Resources With Business
- Business entities have huge set-ups and good infrastructure.
- These organizations have access to different types of resources.
- These resources should be used for fulfilling social responsibilities.
(6) Holding Business Responsible for Social Problems
- Business activity should see if any type of activity is causing harm to society.
- The business should themselves held responsible for causing harm rather than waiting for any government or social team to come and correct them.
Opinions Which Are Against the Idea of Fulfillment of Social Responsibility:
Following Are the Opinions Against Social Responsibilities:
(1) Violation of Profit Maximisation Objective
- The sole motive of the business is profit maximization.
- Supporting social responsibilities is violating the profit-making objective of the business.
- It would be better if entities increase the profits through increased efficiency.
(2) Burden on Consumers
- Social responsibilities like environment protection, pollution control are very costly in nature.
- If entities opt for these social responsibilities, they always try to shift their burden on ultimate consumers.
- It is not reasonable to charge the customers on the name of social responsibilities.
(3) Lack of Social Skills
- Every entity does not have enough skills and knowledge to solve each and every social problem.
- This can be the reason for a poor image in the society.
- So, these problems should be solved by some specialized parties.
(4) Lack of Broad Public Support
- Generally, society does not accept the involvement of business entities in social programs.
- That is why it gets difficult for the business to solve the problems without the participation of the public.
Social Responsibilities for Different Interest Groups
(1) Responsibility Towards the Shareholders
- Shareholders are the owners of the company.
- The company should make all the efforts to maximize and protect shareholder’s wealth.
- Sharing of useful information with the shareholders, utilization of funds etc.
(2) Responsibility Towards the Workers
- Workers are the key persons behind company success.
- Management of the enterprise must provide the proper working conditions to the workers.
- Workers should get fair salaries and wages.
(3) Responsibility Towards the Consumers
- It is the consumer who buys the company’s product & services.
- So, it is the responsibility of the company to provide the right quality, right quantity with the right price to the consumer.
- There should not be the unfair trade practices like adulteration, poor quality, courtesy to the customers etc.
(4) Responsibility Towards the Government & Community
- Enterprises must follow the laws and regulations of the country/ state in which it is operating.
- The organisation should interact with society to know what they require.
- It should maintain proper infrastructure, proper disposal system and should not cause harm to the society in any manner.
Q.1 Name the Responsibility Which Should Be Fulfilled Towards the Society?
Answer: Social Responsibility
Q.2 Why Social Responsibilities Are Important to Fulfill?
- For avoiding government interventions
- For long term concentration of the business in the society.
Q.3 Name the Responsibility Which is Towards the Fulfillment of Government Compliance?
Answer: Legal Responsibility
Q.4 Production of Goods and Services is the Part of Which Social Responsibility?
Answer: Economic Responsibility
Q.5 Name the Responsibility Which is Codified by the Business Organisations?
Answer: Ethical Responsibility
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