CASE FOR SOCIAL RESPONSIBILITY

Protagonist of social responsibility put forward the following arguments in favor of assumption of social responsibilities by the businessmen.

(i)    Creation of society

A business enterprise is a creation of society. It gets all inputs-men, money, materials, technology, information etc. from society; and unloads its output onto society-by marketing goods and services, in society. Therefore, it must be loyal to society; and perform its social responsibilities. 

(ii) Theory of Trusteeship

Mahatma Gandhi evolved the theory of trusteeship; according to which businessmen are the trustees of the wealth of society, and should not use this wealth for their self-enrichment, at the cost of society. Hence, businessmen must perform social responsibilities to justify their role as trustees of the wealth of society.

(iii) Long-term interest of business 

Fulfillment of social responsibilities is in the long-term best interest of business. Performance of social responsibilities will help in the survival and growth of business enterprises. For example, if the business sector helps in spreading education in society; in the long-run, it will get more skilled and educated manpower for its functioning. If, it takes care of employees; it will get a loyal and dedicated work-force, as a reward for performing social responsibilities.

(iv) ‘Joint-venture’ concept 

A business enterprise, is not an exclusive creation of owners, who provide funds for its functioning. Rather, it is run on a joint-venture concept i.e. employees, consumers, suppliers etc. all support the functioning of the enterprise, in their own ways. Therefore, the business should adopt a balanced approach and meet the expectations of various segments of society, rather than be only concerned with making profits to meet the needs of owners.

(v) Public Image

Performance of social responsibilities makes for the image of business in society. Such public image, is yet another name for the goodwill of business. Creation of business goodwill pays huge rewards to business, in many ways.

(vi) Government Intervention

Businessmen should perform social responsibilities voluntarily. In case otherwise, the government might intervene and force businessmen to perform social responsibilities through enactment and enforcement of suitable legislation vis-à-vis social responsibilities. 

(vii) Ample financial resources 

There is no doubt that the ‘business-class’ is the richest class of society, endowed with huge financial resources. This class is the fittest agency to perform social responsibilities, by virtue of, its financial powers.

(viii) Business leadership needed

Business leadership is very powerful and dynamic. Such leadership is needed to solve those social problems; which even the government cannot solve. Hence, business should make available to society the advantage of its talented leadership, through undertaking critical social responsibilities like controlling environmental pollution, promoting rural development, generation of employment opportunities in society etc.

(ix) No law for all situations 

Government cannot enact legislations covering all aspects and spheres of social responsibilities. The business should morally undertake to perform social responsibilities, in those areas which are not regulated or guided by any of the governmental legislations e.g. eradication of povet1y, holding the price-line, giving up cut-throat competition and so on.