Why Should a Business be Socially Responsible?

To reciprocate:  A business organization is part and parcel of the society. The customers, the employees, the suppliers and the Government are the other constituents of the society. As the business is dependent on its customers, the employees, the suppliers and the Government, it also has the responsibility to work for the interest of these various groups.

To be loyal to everyone:  A business should not work for the benefit of the owners/shareholders alone. The participation of the employees, the customers, the suppliers and the Government in the activities of a business is more than the participation of the owners. The business, therefore, has the primary duty to serve these different groups apart from satisfying the owners.

 To compensate adverse effects: The activities of a business do have certain adverse effects on the society. For example, the production process may pollute the environment. There may be air as well as noise pollution due to industrial activity in a particular place. Improper treatment of wastes and effluents may, sometimes, produce foul smell that people living nearby cannot bear. There is also scope for water contamination. The business, therefore, has the responsibility to adequately compensate the society for all these adverse effects.

 To secure goodwill:  It is also possible for a business to secure goodwill by being socially responsible. By offering good quality products at affordable prices and by not indulging in anti-social activities like adulteration. Black-marketing, etc., a business organization will be able to secure the goodwill of its customers.

To behave as a good citizen:  Like any individual who is expected to behave as a good citizen by obeying the laws of the country, the business as a corporate citizen also has to abide by the laws of the nation. The businessman shall pay his tax dues promptly and shall avoid doing anything that is forbidden by law.

 To recognize the dignity of labour:  No business should treat labour as a commodity that can be purchased for a price. The employees, who exert physically as well as mentally for the betterment of the business, are as important as the owners are. The employer, therefore, has the responsibility to compensate the employees adequately for their labour by providing monetary as well as non-monetary benefits.

To have healthy competition:  The competition among businessmen, belonging to the same trade or industry should be healthy. No business should adopt unfair means, e.g., talking ill of the competitors’ products, in order to draw the customers’ attention.