SOCIAL RESPONSIBILITIES TOWARDS DIFFERENT GROUPS
It needs to be noted that the responsibilities of those who manage the business cannot be
limited to the owners. They have to take into account the expectations of other stakeholders
like the workers, the consumers, the government and the community and public at large.
Let us now look at the responsibilities of the business towards all these groups.
(a) Responsibility towards the shareholders or owners: The shareholders or owners
are those who invest their money in the business. They should be provided with a fair
return on their investment. You know that in case of companies it takes the form
dividends. It has to be ensured that the rate of dividend is commensurable with the risk
involved and the earnings made. Besides dividends, the shareholders also expect an
appreciation in the value of shares. This is governed primarily by company’s
performance.
(b) Responsibility towards the Employees: A business enterprise must ensure a fair
wage or salary to the workers based on the nature of work involved and the prevailing
rates in the market. The working conditions must be good in respect of safety, medical
facilities, canteen, housing, leave and retirement benefits etc. They should also be paid
reasonable amount of bonus based on the business earnings. Preferably, there should
also be a provision for their participation in management
(c) Responsibility towards the Consumers: A business enterprise must supply quality
goods and services to the consumers at reasonable prices. It should avoid adulteration,
poor packaging, misleading and dishonest advertising, and ensure proper arrangement
for attending to customer complaints and grievances.
(d) Responsibility towards the Government: A business enterprise must follow the
guidelines of the government while setting up the business. It should conduct the business business
in lawful manner, pay the taxes honestly and on time. It should not indulge in any
corrupt practices or unlawful activities.
(e) Responsibility towards the Community: Every business is a part and parcel of
our community. So it should contribute towards the general welfare of the community.
It should preserve and promote social and cultural values, generate employment
opportunity and contribute towards the upliftment of weaker sections of the society. It
must take every step to protect the physical and ecological environment of the society.
It should contribute to the community development programmes like public health
care, sports, cultural programmes.
Looking at the importance of the social responsibilities of business towards various groups,
it would have been better if the companies act provided for the reporting of the social
activity in the annual report of the companies. However, a few large companies have been
voluntarily reporting their social performances in their Annual Reports regularly. The
prominent among them are Cement Corporation of India, Indian Oil Corporation, Tata
Iron and Steel Company, Asian paints and ITC. These reports reveal that companies are
becoming eco-friendly and conscious of their role in community development.
