((((((((((((((((social Responsibility

By. Rohan Kqpoor

Social Responsibility of business refers to what the business does, over and above

statutory requirement, for the benefit of the society.

Corporate Social Responsibility (CSR) refers to the moral responsibility of the business to

the society by the virtue of being a part of the society.

CSR is about how

companies manage the

business processes to

produce an overall

positive impact on

society.

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Traditional Vs. Modern View of Social Responsibility

Social obligation……social responsiveness……

social responsibility……

Traditional view of Social Responsibility •The prime purpose of the business was

profit maximization- Milton Friedman “ the business of business is business.”

•Friedman argues that the profit earned by business belongs exclusively to the shareholders of the business and these profit cannot be diverted to any other social purpose.-social obligation

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Social Orientation Of Business

•The extent of social orientation of companies vary very widely and change over time.

•Social responsibility models:•Model describes evolution and extent of

social orientation of companies. Following are the corporate obligations.

•Economic•Legal•Ethical•discretionary

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Factors affecting social orientation:

•Promoters and top management•Board of directors•Stakeholders and internal power

relationship•Societal factors•Industry and trade associations•Government and laws•Political influence•Competitors•Resources•Ethical influence

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For social responsibility

•Public expectations•Long-run profits•Ethical obligation•Public image•Better environment•Harmonious and healthy relations with

the society

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Against social responsibility

•Violation of profit maximization•Dilution of purpose•Costs•Too much power•Social actions can not be measured•Lack of skills•Lack of accountability•Increase in the prices of the products or

services.

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Responsibility toward customers/consumer• It has been widely recognized that customer

satisfaction shall be the key to satisfying the organizational goal.

• To understand needs and wants of the customers.

• To improve the efficiency of functioning of business so as to ….

Increase productivity Reduce prices Improve quality and services Smoothen the distribution system

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Responsibility toward employees

•The successful organization depends to a very large extent on the morale of the employees.

•The payment of fair wages•The provision of best possible working

conditions•The establishment of fair work standards

and norms•The provision of labour welfare facility.•Arrangement for proper training and

education of the worker.

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Responsibility toward shareholders

•A fair and responsible return on the capital invested by them

•A part in profit or bonus payment scheme•Political and economical security for

investment through stable govt. law •Knowledge about the working of a n

enterprise.•Fair amount of dividend or retained

earnings.•Voting rights

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Responsibility toward inter-Business• The social responsibility of business include a

healthy cooperative business relationship between diff. businesses.

• Prevention of unfair and unethical competition and unfair interference in the rival’s business.

• Not to spread false rumors about rival’s product.• Not to show unethical advertisement.• Not to create artificial scarcity.• Businessman should adopt better designs, good

advertisements, quick and safe delivery with after sale services, reasonable prices.

Responsibility toward the state (Government)

• It will be a law abiding citizen.• It will pay its dues and taxes other state fully and

honestly.• It will not purchase political support by unfair

means;• It will sell his goods, commodities and services

without adulteration at fair and reasonable prices, and

• It will maintain fair trade practices and refrain from activities like restraint of trade

Responsibilities Towards the Community

• Major areas where business can and does contribute towards community welfare

• Taking appropriate steps to prevent environmental pollution and preserve ecological balance.

• Rehabilitation of population disabled by the business.

• Assisting in over all development of locality.• Taking steps to conserve scarce resources• Improving the efficiency of business operation.• Contributing to R&D• Development of backward areas

• Towards Market Intermediaries• Providing products quiet in advance• Providing freedom to have price margins• Taking back poor quality products• Training the personnel• Providing freedom in promotional

programmes

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