Social Resposibility of Business

Dr. Kavita Srivastava

Dr
Department of Management
ITS Ghaziabad
ITS,
Gh b d

Introduction
y Social responsibility of business refers to what the business

does , over and above the statutory requirement,

requirement for the
benefit of the society
y Responsibility connotes that the business has some moral
obligations towards the society

H.S.
H
S Singhania classifies the nature of the social responsibility
of business into two categories :
y The manner in which a business carries out its own business
activity
y The welfare activity that it takes upon itself as an additional
function
y It can thus be said,
said that the economic consequences of any
business action do not adversely affect the public or the
society in general

Need for Social Responsibility

y Due to globalization of business and in order to establish a

good corporate image, business includes a social

responsibility
espo s ty as co
corporate
po ate oobjective
ject ve
y Very often social welfare is included during the collaboration

agreements which necessitates the collaborating company to

take up social responsibility of business.
y Corporate donations to social welfare projects of approved

NGOs are exempted from income tax in India.

y Social responsibility of business enables the organization to

improve its product positioning and thereby improve its

market
a et sshare.
a e.
y The organizational culture of certain organizations makes it

necessary for them to take up social cause as their moral

responsibility.

CSR towards different Groups

y Responsibility to Shareholders:
y To protect the interests of the shareholders and employees,

the primary aim of business is to remain in business.

business
y If a company fails to cope with the change in a changing and
dynamic world , it becomes its responsibility that by means
of innovation and growth, the company should consolidate
and improve its position and help strengthen its share price.
y It is the endeavour of the company to ensure that its public
image is such that the share holders can feel proud of their
company.

Responsibility to employees
y Payment of fair wages
y Provision of best p
possible workingg conditions
y Opportunities for education, training and promotion
y Workers p
participation
p
in decision-makingg
y Reasonable chances and proper system for accomplishment and

promotion
y Establishments of fair working standards and norms
y Proper recognition, appreciation and encouragement of special
skill and capability of the workers

Responsibility to consumers
y Research and development to improve quality and introduce
y
y
y
y
y
y
y

better and new products

Supply
pp y ggoods at reasonable prices
p
To provide adequate after sales service
To ensure that product sold has no adverse effect on the consumer
To assure that problems of consumers are heard and redressed
Understand the needs of customers and take steps to satisfy there
needs.
To avoid misleadingg advertisement
To remove imperfection in the distribution systems

Responsibility towards the community

y To prevent environmental pollution and preserve ecological
y
y
y
y
y
y

balance
Provide maximum employment
p y
opportunity
pp
y
To conserve scarce resources and to develop alternatives, if
possible
Promotion of ancillary units and SSIs
Rehabilitatingg the population displaced byy operation of
business, if any
Development of Backward area
Making possible contribution to promote education and
population control

Responsibility towards government

y To abide by the laws of the Land
y To
T pay ttaxes hhonestly
tl andd in
i ti
time
y To encourage and fair trade practices
y To avoid monopoly and concentration of economic power
y To avoid corruption

Arguments for Social Involvement of

Business
y Business which survives at the resources of the society has

responsibility towards society

y Social responsibilities like recycling of waste may have
favorable financial effects
y Social involvement may discourage additional government
regulation and intervention
y It will create a better image of company which may help in
attracting customers, efficient personnel and investors

Arguments against CSR

y Business should confine to its own business
business. There are

government and social organizations to carry out social

act v t es
activities
y It could adversely affect the economic health of the
business(TISCO)
y At times the cost of such activities is passed to the consumers
y At times companies involve in such activities for tax
exemptions

Thank you