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Management Concepts & Organisational Behaviour - Social Responsibilities Of Business

Responsibilities to Various Groups-Social Responsibilities Of Business

   Posted On :  17.05.2018 08:46 am

In a broad sense, business owes a lot to the various groups such as customers, employees, shareholders, government and the community at large in which it exists.

Responsibilities to Various Groups
In a broad sense, business owes a lot to the various groups such as customers, employees, shareholders, government and the community at large in which it exists. These groups in the society are called ‘interest groups’ or ‘stakeholders’ in the business organization. Let us examine how an organization responds in socially responsible ways to cater to the growing demands of all these interest groups.

Towards the Customers

Production and supply of quality goods and services at an affordable price is the primary responsibility of business. Customer service should be the motto of the business. It involves offering a fair deal to the customer by indulging in ethical business practices. Therefore every manager in order to serve the customers in an effective way should restrain from:

1. making misleading advertisements aimed at deceiving the consumer;
2. giving wrong or false information about the ingredients, quality, origin, etc., of the product;
3. entering into collusive agreements with other firms to exploit the customers;
4. making false claims of being an authorized dealer/importer of certain goods; and
5. giving misleading names to the products, etc.

Towards Employees

1. proper selection, training and promotion;
2. recognition of the value of human resource;
3. maintaining cordial relations with employees;
4. recognition and encouragement of constructive unionism;
5. fair wage in relation to the cost of living;
6. better working conditions;
7. initiating appropriate measures for the development of human resource; and
8. increase in productivity and efficiency by recognition of merit, by providing opportunities for creative talent and incentives.

Towards Shareholders


Shareholders are the real owners of the business. In view of the several practical limitations for them in overseeing the day-to-day operations of the business, an organization must strive to provide:

1. Security to their funds;
2. A fair rate of return on their investment;
3. Correct information about the operations of the company; and
4. Proper appreciation of the value of their investment in the company by identifying new opportunities that contributes for the growth of the business.

Towards Creditors/Suppliers

Creditors or suppliers provide the necessary inputs to the business. Business has, therefore, certain responsibilities to them. Business can discharge its responsibilities towards this group by:

1. Realizing the importance of maintaining good business relations with them;
2. Meeting the payment obligations timely;
3. Providing true and correct picture about the financial aspects of the company; and
4. Helping them grow along with the growth of the company, etc.

Towards Government

Government provides various facilities for the development of business. Infrastructural facilities like roads, telecommunication, transport, banking, insurance are some of the facilities created by the government without which no business, worth mentioning can conduct its affairs smoothly. Therefore, business also in turn owes to the government in the following ways.

1. Business enterprises should act like law-abiding citizens;
2. Taxes and other duties should be paid timely and honestly;
3. Compliance with the rules and regulations as stipulated by various laws of the land; and
4. Supplementing the governments’ efforts in the developmental activities, etc.

Towards Society at Large

Any business organization can exist as long as it enjoys societal sanction. If it fails to safeguard the interests of the society, the pressure from various segments of the society mounts up. such a situation eventually leads to the promulgation of various acts by the government. That is why, it is always desirable for the business to keep the government to bay. Some managements conduct their affairs in such a responsible way where governments intervention is not warranted. For instance, the origin of several laws governing the business organizations may be traced back to the failure of business organization in protecting the intensity of the various groups in the society. An organization can act in a socially responsible way by:
1. Properly deciding the product policies in line with the national priorities;
2. Preventing the creation of monopolies;
3. Ensuring hygienic disposal of smoke and waste and other affluents;
4. Providing to the community accurate information about its working; and
5. Preserving the national resources of the nation by not indulging in reckless exploitation of the resources, etc.


Tags : Management Concepts & Organisational Behaviour - Social Responsibilities Of Business
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