Social Responsibility of Business Organization – Introduction to Management

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Social Responsibility of Business OrganizationSocial Responsibility of Business Organization
Principles of Management (POM)
Third Semester | Second year
BSc.CSIT | Tribhuvan University (TU)

Social Responsibility of Business Organization
Social responsibility is the obligation of an organization to protect social norms and rule within which the organization is operating. Business organizations are established, exist and perform functions in the society and they also expand and diversify their business activities in the society. They utilize natural resources in production and distribution activities according to their convenience and facility. It is the responsibility of business organization to perform their activities within the existing rules, regulations and norms of society.

Areas of Social Responsibility
The people and institutions have direct or indirect interest in business organizations which consists of shareholders, customers, suppliers and lenders, government, employees and community at large. Social responsibility of business organization towards them is described as follows;

Towards investors (Shareholders): A shareholder or stockholder is an individual or institution that legally owns a share of stock in a public or private corporation

  • To ensure safety of capital investment
  • To provide fair and regular return on investment in terms of dividend
  • To provide correct and regular information of financial and other transactions
  • To offer reasonable opportunities to shareholders for participating in planning and policy making
  • To maximize value of capital investment through optimum utilization of resources

Towards customers: A person who buys the commodities of a business firm is its consumer. Customers are the main source of revenue. They are basis of growth and development of business.

  • Supply better quality goods at the right time at reasonable price
  • Take necessary steps to improve quality, reduce price and development network for distribution
  • Provide after sale service
  • Truthful advertising
  • better quality and for new product
  • Avoid black marketing and adulteration
  • Health and safety of the consumer

Towards employees: Employees are vital components of a business firm. They are directly involved in production and distribution functions of the organization. The responsibilities of businesses towards employees are:

  • Provide job security
  • Provide fair wages, and other benefits like bonus, allowances, share of profit.
  • Ensure welfare facilities like further education, promotion, medical facilities, foreign visit, training
  • Provide favorable working environment and recognition of their performance
  • Provide opportunity to participate in management and career development

Towards government: Government is responsible for the administrative and developmental work of the country. It protects and controls all the business activities and creates business opportunities in new areas. The major responsibilities towards the government are:

  • Follow strictly the government rules, regulations and laws
  • Pay tax (VAT, Income tax, customs duty) to the government honestly and regularly
  • Avoid monopolistic and unfair trade practices
  • Support to solve national problems (unemployment, poverty, illiteracy, family planning)
  • Emphasize on fair dealing in import and export trade to maintain the reputation of the nation

Towards community (public): Business organizations have responsibilities towards the general public. The major responsibilities towards community are:

  • Check environmental pollution and maintain environmental ecology
  • Create employment opportunities for the people
  • Take necessary steps for maximum utilization of resources available in the society
  • Maintain and develop social and cultural values and norms
  • Involve in social welfare programs like education, health, and sports.
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Posted By : Digvijay | Comment RSS | Category : Third Semester
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  1. deepika barman
    Posted December 14, 2016 at 8:06 am

    Good understanding

    • Digvijay
      Posted December 14, 2016 at 2:03 pm

      Well, thanks for the compliment. Hope you liked it.

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