Chapter - 21

Social Responsibility of Business

ORIGIN AND GROWTH OF CONCEPT

► Although the subject “social responsibilities of business” in

its present form and content has gained popular attention
only in the recent years, its origin can be traced back to
the evolution of the concept of a welfare state
 MEANING AND DEFINITION
► Business
is an economic activity to earn profit for
the owner, and social responsibility means serving
community without any expectation.
 DEFINITION THROUGH VARIOUS
DIMENSIONS
► Social responsibility is a nebulous idea and hence,
it is defined in various ways.

► AdolphBerle defined social responsibility as the

manager’s responsiveness to public consensus.

► According to Keith Davis, the term “social

responsibility” refers to two types of business
obligations: (a) the socio-economic obligation b)
socio human obligation
THE NEED FOR SOCIAL RESPONSIBILITY OF
BUSINESS
SOCIAL RESPONSIBILITIES OF BUSINESS
TOWARDS DIFFERENT GROUPS
► Responsibility Towards the Customers

► Social Responsibility to Prospects

► Social Responsibility to Community

► Responsibility to Human Resources

► Responsibility to Society and Ecological Environment

► Responsibility to Government

► Social Responsibility to Global Business Environment

 BARRIERS TO SOCIAL RESPONSIBILITY

► Every business organisation has some obstacles which hinder the effective
fusion of the social welfare objective in the corporate policy.

► The desire for profitability and excessive wealth motivates businessmen to

exploit the workforce and customers.

► The need for tackling internal problems, frequently changing governments,

and law profitability in business are some important barriers in the social
responsibility.
 CORPORATE ACCOUNTABILITY
VIS-À-VIS
SOCIAL RESPONSIBILITY

► Corporate Accountability is the accountability of business to its

various constituents like shareholders, financers,employees,
and customers.

► Business is accountable to its constituents, on the one hand

and responsibility to itself, on the other.
CHALLENGES FOR SOCIAL RESPONSIBILITY
OF BUSINESS
 EMERGING PERSPECTIVES FOR
CORPORATE
SOCIAL RESPONSIBILITY
There are three emerging perspectives that inform
CSR. They are as follows:

► One, a business perspective that recognises the importance of “reputation

capital” for capturing and sustaining markets

► The second is an eco-social perspective

► Rights-based perspective of the corporate responsibility. This perspective

stresses that consumers, employees, affected communities, and shareholders
have a right to know about corporations and their businesses.
 SOCIAL RESPONSIBILITY OF
BUSINESS IN INDIA

► In India, CSR has evolved to encompass employees, customers,

stakeholders, and sustainable development or corporate
citizenship. The spectrum of CSR includes a number of areas
such as human rights, safety at work, consumer protection,
climate protection and caring for the environment, and
sustainable management of natural resources.