Notes on Social Responsibilities of Business | Grade 11 > Business Studies > Introduction to Business | KULLABS.COM

Social Responsibilities of Business

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Business is a social institution. It is operated within the society, for the people and by the people living in the society. It exists, survives, operates and grows in the society. Therefore, it has certain obligations towards society, which are known as social responsibilities. A business must always recognize and understand the aspirations of society and try to meet them.

According to Keith Davis and Blamestorm, “Social responsibility refers to the obligation of decision makers of the business to take actions which protect and improve the welfare of the society as a whole along with their own interests.”

According to J.L Paluszek, “Corporate social responsibility is seriously considering the impact of the company's activities in society.”

Responsibility towards Investors

Source: www.slideshare.net
Source: www.slideshare.net

Shareholders are the owners of the business. They invest capital for the establishment of the business and bear a risk of loss. Shareholders have a direct interest in the welfare and the development of the business. The main responsibilities of business towards shareholders are:

  • To ensure the safety of Capital Investment
  • To provide equal opportunity to all the shareholders to participate in the management of the business as facilitated by the law
  • To provide a fair and adequate return on shareholders’ investment
  • To provide correct and regular information about financial and other transactions
  • To maximize the value of capital investment through optimum utilization of resources

Responsibility towards Consumers

Source: www.slideshare.net
Source: www.slideshare.net

Consumers are the king of the market. They are the main source of revenue of the business organization. They are the key figures in the market for the growth and development of a business. The main responsibilities of business towards consumers are:

  • To supply better quality goods at the right time at a reasonable price
  • To provide after sale service on the basis of nature of a product
  • To provide information about the changes introduced by the business
  • To take necessary steps to improve quality, reduce price and develop the network for distribution
  • To avoid unfair trade practices like black marketing, adulteration, false advertising etc.

Responsibility towards Employees

Employees are the greatest assets for all business. Business cannot be run alone by inventors and owners only. It needs the help of employees and workers. They are the assets of the business organization and their welfare is moral responsibility of business. The following are the responsibility of business towards its employees:

  • To ensure job security
  • To create a cordial relationship between management and workers
  • To participate employees in decision making and profit sharing programs
  • To provide an opportunity for training, promotion, and career development
  • To hear and handle the grievances of employees and workers

Responsibility towards Community

Community represents the group of people in the immediate surroundings of a business. Business is a social institution, it must be responsible towards its society where it exists, survives and grows. It must consider the social aspirations and try to fulfill them. The main responsibilities of business towards community are as follows:

  • To promote social values and norms
  • To utilize the resources of the community
  • To provide financial assistance to educational institutions hospitals, libraries, clubs etc. for their operations
  • To help to protect the environment from pollution and maintain the ecology
  • To create employment opportunities for skilled, semi-skilled and unskilled workers

Responsibility towards Government

Government plays an important role in creating favorable conditions for the establishment, operation and the growth of the business by formulating appropriate policies and developing necessary infrastructures. The following responsibilities towards the government are as follows:

  • To pay taxes honestly and regularly
  • To support the government to improve the quality of life
  • To follow the rules, regulations and laws of the country
  • To avoid monopolistic and unfair trade practices
  • To provide important business information and advice to the government whenever required

 

 

 

 

 

References:

Khanal, Soma Raj, Surendra Thapa Aslami and Sitaram Dhakal. Business Studies. Kathmandu: Taleju Prakashan, 2067.

Pant, Prem R., et al. Business Studies. Kathmandu: Buddha Academic Publishers and Distributors Pvt. Ltd., 2010.

 

 

 



Social Responsibilities of Business 

  1. Responsibility towards Investor
  2. Responsibility towards Customers
  3. Responsibility towards Employees
  4. Responsibility towards Community
  5. Responsibility towards Government

 

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Very Short Questions

Business is a social institution that exists survives, operates, and grows in the society.  Therefore, it has certain obligations towards society, which are known as social responsibilities. A business must always recognize and understand the aspirations of the society and try to meet them. A business also considers the board social system, its needs expectations while performing its activities.

According to Keith Davis and Blamestorm, “social responsibility refers to the obligation of decision makers of the business to take actions which protect and improve the welfare of the society as a whole along with their own interests "

According to J.L Paluszek,"Corporate social responsibility is seriously considering the impact of company's activities in society."

From the above definitions, that social responsibility is the obligation that a business has to fulfill towards the society in general and stakeholders. It takes decisions and actions that promote social order, values, stability, strength, and harmony.

The main areas of  the business responsibilities are:

  • Social Responsibilities towards  Investor
  • Responsibilities towards Shareholders
  • Responsibilities toward Customers.
  • Responsibilities towards Employees
  • Responsibilities towards Community
  • Responsibilities towards Government

Responsibility towards Investors

Shareholders are the owners of the business. They invest capital for the establishment of the business and bear a risk of loss. Shareholders have a direct interest in the welfare and the development of the business. The main responsibilities of business towards shareholders are:

  • To ensure safety or capital Investment
  • To provide equal opportunity to all the shareholders to participate in the management of the business as required by the law.
  • To provide a fair and adequate return on shareholders’ investment.
  • To provide correct and regular information of financial and other transactions.
  • To maximize the value of capital investment through optimum utilization of resources.

Responsibility towards Consumers

Consumers are the king of the market. It is the main source of revenue of the business organization. Customers satisfaction must be the main motto of business. They are the key figures in the market for the growth and development of a business. The main responsibilities of business towards consumers are:

  • To supply better quality goods at the right time in reasonable price.
  • To provide after sale service on the basis of nature of a product.
  • To provide information about the changes introduced by the business.
  • To take necessary steps to improve quality, reduce price and develop the network for distribution.
  • To avoid unfair trade practices like black marketing, adulteration, false advertising etc.

Responsibility towards Employees

Employees are the greatest assets for all business. Business cannot be run alone by inventors and owners only. It needs the help of employees and workers. They are the assets of the business organization and their welfare is moral responsibility of business. The following are the responsibility of business towards its employees:

  • It ensures job security
  • It creates a cordial relationship between management and workers.
  • It participates employees in decision making and profit sharing programs.
  • It provides opportunity for training, promotion and career development
  • It hears and handles the grievances of employees and workers.

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shankar

Don't understood about business study


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