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What are the Social Responsibilities of Business?

Updated on August 31, 2014
C.V.Rajan profile image

C.V.Rajan is a retired Engineer. Backed by 3 decades of industrial experience, he writes on several aspects of business, management and HR.

providing a pollution-free and nature-friendly ambiance is a corporate responsibility
providing a pollution-free and nature-friendly ambiance is a corporate responsibility | Source

As an individual living in a cohesive society, every citizen has certain social responsibilities to care about. Business houses too are parts of society and naturally they too are necessarily bound by certain commitments and responsibilities to the society.

Interestingly, we can take cues from individuals' social responsibilities which most of us are quite aware of and derive corresponding ones applicable to the business towards the society.

Let us take one by one of an individual's responsibility towards society and compare it with a corresponding responsibility of a business house.

Way of making money

An individual should earn his livelihood by certain socially acceptable means which are not detrimental to the welfare of the society. (Eg. Not being a drug peddler, a pick-pocket/ thief)

A business house should not make its profits by producing goods or by rendering services that are detrimental to the welfare of the society. (e.g. A company producing spurious medicines, or a business house engaged in supplying arms and ammunition to terrorists, a grocery shop selling adulterated food items - these are not acceptable to social norms)

Concern for others' welfare

An individual should not behave in such a way to create nuisance or trouble to the society (e.g. dumping garbage on the roads, indecent behavior in public places, producing noise - like playing loud music through blaring loudspeakers) etc.

A business house should not let out their wastes that lead to atmospheric, water and soil pollution. A factory/ workshop should not produce too much of noise that cause disturbance to the workforce and surroundings.

Paying taxes

In individual should be a honest tax payer (income tax, professional tax etc).

Likewise, the business house should pay its taxes and duties to the Government (sales tax, import duties, service tax, VAT etc as applicable in the country) as stipulated in the law by maintaining proper accounts and not resorting to any dubious means of tax evasion.

Law abiding

An individual should respect and obey rules of laws - rules related to driving, payment of taxes, construction of residential buildings, payment of rentals, loans etc.

Business too should be run within the confines of the rules, regulations and laws related to registration, location of business activity, collection and payment of taxes, pollution control, labor relations, mercantile laws etc.

Responsibility towards dependents

Every individual has his responsibility to take care of parents (providing physical and financial support at old age), extending a helping hand to needy relatives in the family etc. Every one has the responsibility of bringing up their children - providing food clothing and shelter with loving care, providing education and help them grow up as responsible citizens.

Likewise, a business house has its responsibilities to its stakeholders like

  • ensuring reasonable returns on investment to investors/ share holders

  • prompt repayment of loans to financial institutions

  • paying salaries and ensuring social security to its employees

  • providing care and comforts to the employees at workplace and meeting statutory requirements like holidays, maternity leave, sick leave, over-time payment etc.

  • payment of taxes to the government

  • providing quality goods and services to the customers for their money's worth

Respecting others' rights

As an individual no one should bulldoze others' legitimate means of survival by acting out of utter selfishness or arrogance.

Likewise, a business house should not try to sniff out competition by monopolizing the business; it should not engage in unlawful activities (e.g. employing child labor) for maximizing profits.

A business is not just a money-making entity in the society. It has a very responsible role to play in the welfare of society irrespective of whether it is bound by statute or otherwise.


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