The Social Responsibility of Business

The Social Responsibility of Business By Rupal Jain

Business and Society are interdependent. Society depends on business for meeting its needs and welfare, whereas, Business depends on society for its existence and growth.

Corporate Social Responsibility is an ethical or ideological theory; a doctrine, how an entity whether it is a government, corporation, organization or individuals has a responsibility to society and can be defined as, “the obligation of business to pursue those policies, to make those decisions or to follow those lines of actions which are desirable in terms of the objectives and values of your society”.

As rightly said, “It is better to be proactive towards a problem rather than reactive to a problem. One part of Social Responsibility is being responsible to people, for the actions of people and for actions that affect people”, hence it means obligation of business towards different social group, i.e. the consumers, employees, shareholders, society, government, media and so on. As Abraham Lincoln once said that public sentiments is everything. With public sentiments nothing can fail, without it, nothing can succeed.

In 2001, Kaliski believed, “In today’s society a business must maintain ethical principles in order to be successful. Business can use ethical decision leading to strength their business in three main ways. The 1st way is to use their ethical decision making to increase productivity of the employees, the 2nd way to strengthen their business is by making ethical decisions towards their stakeholders that are outside of the business environment, viz customers and suppliers and the 3rd way that business can use ethical decision making to secure their business is by making decisions that allows the government agencies to minimize their involvement with the corporation.

The utilitarian principle says – Act in a way that results in the greatest goods for the greatest number. The Social Responsibility Concept is beneficial to the Business and the Society. “The most significant contribution organized industry can make is by identifying itself with the life and the problems of the people, of the community to which it belongs, and by applying its resources, skills and talents to serve and help them”- Late J. R. D. Tata.

Thus, every business must have a code of conduct as a guideline which directs human behavior and helps to them differentiate between good and bad, right and wrong, fair and unfair, professional and unprofessional as well as determining universal rules and laws of a behavior. It can be seen within the company in various departments like Human Resource Management (recruitment, selection, induction, training, promotion, payroll, retention and motivation); Marketing Management (sales, distribution, advertising, promotion, public relation, publicity); Finance (auditing, risk management, taxation, cost analysis); Production(logistics, warehousing, supply chain, quality control), thus it is an inseparable management activity/function.

Social Responsibility is voluntary; it is about going above and beyond what is called for by the legal responsibility; it can not be imposed by law, thus, it needs willing acceptance and self discipline. As the golden rule says, “Act in a way you would want others to act toward you.”

According to Renowned Indian Jurist Nani Palkivala, “What is the point in having laws and laws upon laws if your inner consciousness is not there, which enables you to do right things for a right conclusion. In other words; if you are to looking for fairness and justice all around it has to be found within the heart of the businessmen. If the ethical sense dies in the heart of the businessmen, no constitutions, no law, no court can save it. It is only within yourself that you have to find the ideals you are struggling to establish.”

Finally, I would conclude by the famous words of Earnest Dale, “It is the duty of business to provide fair returns to the shareholders, fair working conditions to the employees, fair deal to the suppliers and customers to make the business an asset to the local community and the nation.”
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Written By: Rupal Jain, Lecturer, Atharva Institute of Management Studies (MUMBAI)

She can be reached at  jainrupal@sify.com