Posted by Chester Morton / Wednesday, 1 November 2017 / No comments
The social responsibilities of business
SOCIAL RESPONSIBILITY OF BUSINESS
Introduction
The term Social responsibility comes from the idea that a business should be able to balance its profit-making activities with activities that benefit society; it involves developing businesses with a positive relationship to the society in which they operate. Socially, a business is expected to be responsible for the following stakeholders.
Responsibility towards Shareholders or investors
Social responsibility of business towards its shareholders or people who invest in the business is one of the most critical among the responsibilities that a business must fulfill. This is because when a business is able to make profit for its owners (shareholders), they are more likely to invest further in the business. As more investments flow into the business, it is able to expand to a larger scale.
Responsibility towards Personnel or Employees
It is very important for a business to be socially responsible toward its employees, this is vital because they are the company’s most valuable assets. Without the support of its personnel, it will be very difficult for the business to function. Employees are responsible for carrying out the plans of the business by working to produce what the business is offering to the market. If a business is thoughtful about the needs of its human resource (employees or staff or workers), and tries to satisfy those needs, the business will be helping to motivate the workers to give their best. A good remuneration or salary policy will attract new talented professionals who can further contribute in its growth and expansion. Therefore, if the workers are satisfied, then they will work together very hard and help to increase productivity, sales and profit.
Responsibility towards Consumers or customers
From both the sales and profit point of view, it is important for a business to exercise responsibility towards its customers or consumers. When a business satisfies its customers, for example by delivering good quality service or producing high quality products, customers will feel that they are getting their money’s worth when they buy the business’ product or patronize the services of the business. This will make the customers more loyal. In the long run loyal customers will ensure that the business’ customer base will grow and ultimately make the business more profitable.
Responsibility towards the Government
A business must be socially responsible towards state organizations which have been given the authority to regulated the sector in which the business is operating. For example, before a business can engage in selling processed food items, an organization must first obtain clearance or a license from the state agency often referred to as the Food and Drug Board. A business must be responsible in this regard because if a license is refused or revoked, the business can be affected by huge losses. It is therefore important that a business complies with government regulations. In many cases companies are able to continue doing business only if state regulatory bodies are satisfied that they have complied with all regulations concerning their business.
Responsibility to Local Community
Social responsibility of business towards the local community within which it is located is paramount. The reason is that sometimes when the local community is not happy with the business’ activities, there can arise agitations from the local community which can serve as a hindrance to doing business smoothly. Furthermore, industrial activities which are carried out in a locality has direct effect on the lives of the people living in and around the community. As a result some compensation might be needed to keep the community happy. For instance, a company might decide to renovate the library of a community school, build a hospital, construct a community center in a community, or build access road to help alleviate some of the hardships caused by the presence of the industry in that community.
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Responsibility to the Environment
When a business is socially responsible and shows respect for the environment in which it works, it is able to demonstrate that it has the future of the planet at heart. Showing that the firm is keenly interested in protecting nature is becoming a requirement from governments and demanded by the customers. For example, chocolate producers in Switzerland may decide that they will not buy cocoa from countries that do not stand against child labour or child slavery. Another example is that a government may decide to close down a company whose activities are destroying the water bodies in the country. It is therefore important for a business to comply with environmental laws.
Responsibility to the Public
A business can also exercise its responsibility towards the public by proving public places of worship, sponsoring education of poor but brilliant students, footing the hospital bills of children suffering from diseases which require expensive surgery costing beyond the means of their parents.
Finally, social responsibility of business in general can contribute to make the lives of people a little better, and the world is such responsible actions from business organization.
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