Social Responsibility of Business Organization | Principles of Management

Social responsibility of business towards shareholders, customers, employees, governments and public

Social Responsibility of Business Organization

It is the obligation of a business organization to protect social norms and rule within which the organization is operating. Social responsibility in business organization pertains to people and organizations behaving and conducting business ethically and with sensitivity towards social, cultural, economic, and environmental issues. Each and every activity in the organization has connection with the society. Business organization has existence in the society, it performs several functions in the society, it also expands and diversify their business activities in the society. So by this far, it is the obvious responsibility of business organization to perform their activities within the existing rules, regulations and norms of society.

An organization consists of shareholders, customers, suppliers and lenders, government, employees and community at large. Their direct or indirect interaction builds complete business organization. Social responsibility of business organization towards them is described as follows;

Towards Shareholders or investors

Social responsibility of business towards its shareholders or investors is most important of all other obligations. If a business satisfies its shareholders, they are likely to invest more money in a project. As a result, more funds will flow in and the same can be utilized to modernize, expand and diversify the existing activities on a larger scale.

Satisfaction of shareholders must be taken into consideration in order to give continuity to business organization. For this purpose, a business organization must provide regular return on investment in terms of dividend, safety of capital investment must be ensured and regular flow of financial and other transaction information must be ensured. To offer reasonable opportunities to shareholders for participating in planning and policy making could encourage them more towards business organization.

Towards Customers

A business is incomplete without customers. The survival and growth of business depends on consumer satisfaction, service and support. The business organization must ensure the satisfaction of the customers. This is possible by fulfilling following social responsibilities towards them;

i)                    Quality of products/services

ii)                   Fair prices of products/services

iii)                 Truthful Advertising

iv)                 After Sales Service

v)                  Research and Development

vi)                 Health and safety of the consumer

vii)               Regular Supply

viii)              Attend Complaints

Towards Employees

Social responsibility of business towards its employees is important because they are the pillar of an organization. If a business takes care of the needs of its human resource wisely, it will boost the motivation and working spirit within an organization. Therefore, the responsibilities of a business organization towards the employees should be fulfilled in proper manner because this will give a greater productivity to the organization. Social responsibilities of business organization towards employees are as follows

i)                    Good working condition and job security

ii)                   Fair wages along with bonus, medical allowance, travelling allowances.

iii)                 Prompt payment

iv)                 Maintained physical and mental atmosphere

v)                  Participation in the management and career development

vi)                 Training, Promotion and welfare schemes

vii)               Proper personnel policies

viii)              Health and safety measures

Towards Government

Social responsibilities of business towards government’s regulatory bodies or agencies are quite sensitive from the license’s point of view. If permission is not granted or revoked abruptly, it can result in huge losses to an organization. Therefore, compliance in this regard is necessary. Some of the social responsibilities of business organization towards government are as follows;

i)                    Respect laws and abide by all established regulations while performing within the jurisdiction of the state

ii)                   Follow government rules, regulations and laws strictly

iii)                 Avoid unfair trade practices

iv)                 Regular and honest tax payment

v)                  Support to solve national problems like unemployment, poverty, illiteracy etc.

vi)                 Licensing an organization

vii)               Seeking permissions wherever necessary

Towards public (society)

Business organizations have responsibilities towards the general public and they are as follows

i)       Protection of environment, check environmental pollution and maintain environmental ecology

ii)           Use available resources properly, take necessary steps for maximum utilization of resources available in the society.

iii)                 No participation in anti-social activities

iv)                 Development of backward regions

v)                  Create employment opportunities for the people.

vi)                 Maintain and develop social and cultural values and norms.

vii)               Organize social welfare programs like health, education, and sports