Maharashtra Board Class 12 Organization of Commerce and Management Chapter 6 Social Responsibilities of Business PDF Download

Social Responsibilities Of Business

6.1 Introduction

Social responsibility of business means the obligation of business management to protect the interest of the society. No business exists alone. Every part of the society helps the business succeed. So business should do something for the society in return. This responsibility of business towards the society is called social responsibility.

A socially responsible firm should not work only for profit. It should also care about the welfare of different sections of the society.

Every business organisation works in an environment. No organisation can survive without environment. It gets inputs like manpower, money, machines, and materials from the environment. After converting the inputs into output, the organisation gives it to the various sections of the society. These sections are also important parts of the environment. So the existence of a business organisation depends on the society both for getting inputs and giving outputs.

6.1.1 Concept Of Social Responsibility

Social responsibility of business means its obligation to take those decisions and do those actions which are good for the society. So all business activities should be done in such a way that they will not harm any part of society. Rather they will protect and help the society.

Definitions:

Howard D. Bowen - Social Responsibility is to pursue those policies, make those decisions, or follow those lines of action which are good for the objectives and values of our society.

Keith Davis - Social responsibility of business means the obligations of business decisions and actions that go beyond the firm's direct economic and technical interest.

The concept of social responsibility has been followed in India since old times. Philosophers like Chanakya from India and philosophers from the West preached and promoted ethical principles while doing business.

Social responsibility is bigger than legal responsibility of business. Legal responsibility means only following the law. Social responsibility is more than that. It is the firm's recognition of social obligations even though not covered by law along with the obligations laid down by law. In other words, social responsibility involves voluntary action by business people for the benefit of society.

6.1.2 Need For Social Responsibility

Business organisation is run by profit motive but profit maximisation should not be the only aim. Commitment to society is also important. The following points show the need for social responsibility of business.

1) Concept Of Trusteeship:

Trusteeship is a philosophy that was created by Mahatma Gandhi. It means wealthy people should be trustees of trusts that look after the welfare of all people. Businessmen are considered to be trustees of society.

2) Changing Expectations Of Society:

Society's expectations from business firms have changed over the years. In the early days, businesses were only seen as providers of goods and services. But today society expects business to be a responsible citizen and contribute towards social welfare.

3) Reputation:

Businesses spend huge amounts of resources in brand building and strengthening their image. A socially responsible company enjoys good reputation in the society. It results in increased sales, profitability, attraction of talent and sustained growth.

Teacher's Note

Social responsibility means business should think about society, not just money. For example, a factory should not put poison in the river water even if it saves money.

Exam Trick

Remember: Social Responsibility = Business + Society Care. Just like you care for your family, business should care for society. Both are important, not just money.

Points To Remember

Social responsibility means business should help society, not just make profit.
Business gets inputs from society, so it must give back to society.
Mahatma Gandhi taught the idea of trusteeship in business.
A responsible company gets good reputation and more customers.
Business should protect environment and follow laws.

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