Social Responsibility Of Business
INTRODUCTION :
Today business is treated as an instrument of economic growth and social transformation. Business and Society are interrelated and interdependent. A business unit comes into existence with the support of the society so business should realize its obligations towards the society.
CONCEPT OF SOCIAL RESPONSIBILITY:
As we are members of a family, we are also part of society. Society and family do several things for our benefit and also expect certain obligations from us.
As a student, as an individual, you have certain responsibilities such as completing your assignment in time, taking care of your parents, eating healthy food and keeping yourself fit and keeping promises.
It is true for business also, business operates within a society. It uses resources of society. It depends on various factors of society for its function.
Land, water and others resources i.e. factors of production required by business units are owned by society. Requirements of capital and financial needs are supported by investors who are members of society. Without employees and customers, the business unit cannot function.
Evolution of social responsibility
1.Society → 4.Social responsibility
2. Factor of production → 3.Business activity
In ancient literature, we found a concept of helping the poor and disadvantaged through profits made by the traders and emperors. So it was a philanthropic concept.
It was developed as the business was growing. We found charitable foundations, education and health care institutions and trust of the community.
Activities of charity such as developing gardens, parks, motivation of research, sponsoring games and sports at national and international level are examples of social responsibility. Modern concept has a wider idea, it includes ethical, legal and economic aspects.
Traditional : → Philanthropic (Welfare of people)
→ Help i.e. poor people disadvantaged section of society
Modern Concept :
-Philanthropic → supporting community to educate people
-Ethical → avoid questionable practices
-Legal → obeying all laws - consumer/environment law
-Economic → minimizing cost and maximize sales revenue
Observing recent trends of business, we find rising globalization and pressing ecological issues That is why the role of business is redefined.
All Companies have two point agenda:
1. To improve quantitatively (positive impact on society)
The International organization for standardization (ISO) has developed an international standard to provide guidelines for adopting and disseminating social responsibilities ISO 26000 for social responsibility.
It was published in 2010. These standards are encouraging voluntary commitments for social responsibility and also its methods of evaluation. The standard describes itself as a guide of dialogue for business.
Traditional Primitive
Modern Wider
CSR - Global
Recents Trends → Improved relations with investors and (CSR) community
→ Better access to capital
→ Strong financial performance
→ Profitability through operational efficiency
→ Enhance employment relation
→ Innovation and productivity
It is an opportunity for corporations to change their purely economic parameters of success. This helps them to build their brand.
Duties are part of routine functions of carrying business activity. There are additional functions of carrying out welfare activity, e.g. drug manufacturing firms take extensive research and produce drugs which are qualitatively superior.
They provide scholarships to employees to study abroad, encourage environmental protection, animal rights, community trade and human rights. They solve problems related to poverty.
ADDITIONAL INFORMATION :
Many companies in India have started CSR programmes:
→ Tata motors provided low cost transportation in the form of Nano. A large portion of profit of the
Tata group companies go to charitable foundations and come back to Indian society.
→ Few years ago, Reliance India Limited launched a country wide programme known as “Project Drishti" to restore the eyesight of visually challenged people from economically weaker sections. They have brightened up the lives of over 5000 people so far.
→ Mahindra and Mahindra has started programmes called "Nanhi Kali”. This is for girls who are deprived from education. Education cost of 1 girl is 1800 per year. Company has adopted 28,000 girls.
They have also started "Pride School" near Pune where socially and economically backwards students get training and they get jobs in chains hotels like Barista.
→ Infosys Foundation has helped poor people through scholarships in the field of education. medical and charity. They have built and staffed the entire hospital and engaged in hundreds of other social projects.
→ Hindustan Uni lever's "Project Shakti'' uses micro-finance principles to create sales forces in the poorest regions of the country.
→ ITC Developed a project in a rural area called "Mission Sunera Kal ''. They provide help to farmers, create job opportunities for women and expand education.
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