Business Environment and Law-Business And Its Environment
Social Responsibilty-Business And Its Environment
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Social responsibility is the obligation of decision-makers to take actions, which protects and improves the welfare of society as a whole along with their own interests.
Social
Responsibilty
Social responsibility is the obligation of decision-makers to take actions, which protects and improves the welfare of society as a whole along with their own interests. Every decision the businessman takes and every action he contemplates have social implications.
“Social responsibility refers to the business decisions & actions taken to reasons atleast partially beyond firm’s direct economic or technical interest” – Keith Davis
Managers, who are concerned about corporate social responsibility, need to identify various interest groups which may affect the functioning of a business organization and may be affected by its functioning. Business enterprises are primarily responsible to six major groups:
These groups are called interest groups or social stakeholders. They can be affected for better or worse by the business activities of corporations.
Social responsibility is the obligation of decision-makers to take actions, which protects and improves the welfare of society as a whole along with their own interests. Every decision the businessman takes and every action he contemplates have social implications.
Definition Of Social Responsibility
“Social responsibility refers to the business decisions & actions taken to reasons atleast partially beyond firm’s direct economic or technical interest” – Keith Davis
Arguments For Social Responsibility
- Business has to respond to the needs and expectations of society.
- Improvement of the social environment benefits both society and business.
- Social responsibility discourages additional governmental regulation and intervention.
- Business has a great deal of power, which should be accompanied by an equal amount of responsibility.
- Internal activities of the enterprise have an impact on the external environment.
- The concept of social responsibility protects interests of stockholders.
- Social responsibility creates a favourable public image.
- Business has the resources to solve some of social problems.
- It is better to prevent social problems through business involvement than to cure them.
Arguments Against Social Responbility
- Social responsibilities could reduce economic efficiency.
- Social responsibility would create excessive costs for business.
- Weaken international balance of payments
- Business has enough power, and social involvement would further increase its power and influence.
- Business people lack the social skills necessary to deal with the problems of society.
- Business is not really accountable to society.
Social Stakeholders
Managers, who are concerned about corporate social responsibility, need to identify various interest groups which may affect the functioning of a business organization and may be affected by its functioning. Business enterprises are primarily responsible to six major groups:
- Shareholders
- Employees
- Customers
- Creditors, suppliers and others
- Society and
- Government.
These groups are called interest groups or social stakeholders. They can be affected for better or worse by the business activities of corporations.
Social Responsibilitysocial Responsibility Towards Stakeholders Customer:
- Avoid misleading advertisement.
- Avoid misleading name of the product.
- Avoid authorized dealer name for misleading customer.
- Avoid wrong information.
- Avoid exploiting customers.
- Avoid collusive agreements with other firms to exploit customer.
Employees:
- Fair wage, bonus & incentives to employees.
- Cordial relation towards employees.
- Providing better working condition.
- Creating opportunities for creative and talent employees.
- Proper training.
- Proper and transparent performance, appraisal and promotion
Shareholders:
- Assuring security to their fund
- Proper payment of return on investment(roi)
- Providing correct information about the company.
Government:
- The business activities should be law abiding.
- Prompt payment of tax & other duties.
- Abiding by pollution controls.
Creditors & Suppliers:
- Maintenance of cordial relationship.
- Timely payment & obligation.
- Providing true & correct picture of financial position
Society:
- Preventing monopoly.
- Disposal of waste & effluents.
- Creating employment opportunities.
- Balanced regional rural development.
Tags : Business Environment and Law-Business And Its Environment
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