Meaning of Social Responsibility of Business
It means responsibility of business towards different components of society i.e. owners, investors, employees, suppliers, customers, competitors, government and general public, while taking the major decisions of the company.
An amendment to The Companies Act, 2013 in April 2014, corporate social responsibility (CSR) has been made mandatory, for companies having more than a particular amount of Net Worth/Annual Turnover/Net Profit.
So, it becomes legally compulsory to make a clear cut Corporate Social Responsibility Policy (CSR Policy), for such companies.
Responsibility Towards Different Components of Society
- Responsibility towards owners and Investors
- Run the business efficiently by proper utilization of capital and other resources.
- Ensure growth and appreciation of capital.
- Try to make regular and fair return on capital invested.
- Ensure safety of their investment.
- Make regular payment of interest.
- Make timely repayment of principal amount.
- Responsibility towards Creditors
- Make the payment to the creditors in time.
- Ensure safety of credit allowed by them.
- Responsibility towards employees
- Timely and regular payment of wages and salaries.
- Proper working conditions and welfare amenities to the employees.
- Better career opportunities.
- Job security as well as social security like facilities of provident fund, group insurance, pension, retirement benefits etc.
- Better living conditions like housing, transport, canteen etc.
- Time to time training and development.
- Responsibility towards suppliers
- Give regular orders for purchase of goods.
- Deal on fair terms and conditions.
- Make timely payment of dues.
5. Responsibility towards customers
- Production or sale of products and services should be according to the needs of the customers.
- The products and services must be of good quality.
- There must be regularity in supply of goods and services.
- The goods and services should be sold at reasonable prices.
- The advantages, disadvantages, use and procedure to use the product must be informed to the customers correctly.
- There must be proper after-sales service.
- Grievances of the consumers, if any, must be settled quickly.
- There should not be unfair trade practices like under weighing, adulteration etc.
- Responsibility towards competitors
- Not use aggressive sales policies like offering heavy discounts and /or free products in every sale to its customers.
- Not defame competitors through false or ambiguous advertisements.
- Responsibility towards government
- Governmental regulations must be followed in every respect.
- Pay fees, duties and taxes regularly and honestly.
- Not indulge in unfair trade practices like black marketing, over-charging etc.
- Help in pollution control plans and policies started by the government.
- Responsibility towards society/community/general public
- Help the weaker and backward sections of the society.
- Preserve and promote social and cultural values.
- Generate employment opportunities.
- Conserve natural resources.
Social Responsibility Quiz