Social Responsibility of Business towards Shareholders, Employees, Customers, Dealers, Community & Government

Social Responsibility of Business

Just like businesses have certain ethics, there are certain social responsibilities that businesses should fulfill to contribute to the society, and its different sections.

What is social responsibility? 

It means businesses must act in a manner that benefits society, besides maximizing their shareholder value. Businesses depend on society for resources, like men, money, and skills. They also depend on society for the market to sell their products and services. In short, the existence, sustainability and encouragement for businesses depend on the society.

Having such a great deal of dependency on the society, businesses also have a definite responsibility towards different sections of society. Performing some responsibilities, businesses should satisfy employees, customers, government, shareholders, and community.

Social responsibility of businesses towards:


The success of a business depends on the morale of its employees and their whole-hearted cooperation. Responsibility of businesses towards employees is in the form of promotion. training, proper selection, safety, fair wages, health, comfortable working conditions, worker’s education, participation management etc.

The organization’s responsibility to its employees are:

  • Ensuring equitable compensation;
  • Providing optimal working conditions;
  • Establishing just work standards and norms;
  • Offering labor welfare amenities to the maximum extent feasible and fitting;
  • Establishing effective training and educational programs for employees;
  • Providing fair opportunities and a well-organized system for achievement and advancement;
  • Recognizing, appreciating, and fostering the special skills and capabilities of workers.

A survey conducted at TISCO (Tata Iron and Steel Company) found the company not only upholds its commitments to employees and the broader community on a principled basis, but this approach has also boosted efficiency at TISCO, resulting in exceptional industrial performance, substantial team spirit, and discipline.

These factors, in turn, have contributed to high productivity and optimal capacity utilization. In fulfilling its responsibilities to employees, the business ultimately promotes its own interests.


The responsibility of business extends to both its owners and the effective management of profitability. This involves securing a consistent and fair return on the invested capital, strengthening the financial standing of the business, and ensuring capital appreciation to empower owners in facing unforeseen business challenges.

The organization’s responsibility to owners/shareholders are:

  • The company should ensure a justifiable return on shareholders’ investments.
  • Without adequate dividends, shareholders may be reluctant to inject more capital into the company.
  • It’s crucial to keep shareholders thoroughly updated on the company’s operations to foster robust business growth.
  • The company should enhance its share prices through growth, innovation, and diversification. Simultaneously, shareholders should extend wholehearted support and cooperation to safeguard their own interests.
  • The company strives to maintain a public image that instills pride in its shareholders.


The true essence of business lies in a singular definition: the creation of a customer. A customer forms the bedrock of any enterprise, breathing life into its existence.

Society confides its wealth-producing resources to a business with the expectation that it will cater to the desires and needs of consumers. The consensus is clear: customer satisfaction is the linchpin to achieving organizational objectives.

The organization’s responsibility to consumers are:

  • Boost productivity and lower costs,
  • Elevate quality,
  • Streamline the distribution system for readily available goods.
  • Conducting research and development to enhance product quality and introduce innovative offerings.
  • Implementing measures to rectify flaws in the distribution system, addressing issues like black-marketing, profiteering by middlemen, or involvement of anti-social elements.
  • Furnishing products at fair prices, even in a seller’s market.
  • Delivering necessary post-sales services.
  • Guaranteeing the absence of adverse effects on consumers from the supplied product.
  • Offering comprehensive information about products, covering potential adverse effects, risks, and proper usage care.
  • Steering clear of misleading customers through improper advertisements or other means.
  • Granting a chance for customers to be heard and addressing legitimate grievances.
  • Grasping customer needs and implementing measures to meet those needs effectively.


A company bears significant responsibility to the local community and the broader society in which it operates.

The organization’s responsibility to community are:

  • Implementing measures to avoid environmental pollution and maintain ecological harmony.
  • Providing rehabilitation for any population displaced due to business operations, if applicable.
  • Facilitating the comprehensive growth of the community.
  • Implementing measures to preserve limited resources and explore alternatives when feasible.
  • Enhancing the effectiveness of business operations.
  • Engaging in research and development initiatives.
  • Advancing the development of underprivileged regions.
  • Encouraging the growth of ancillary and small-scale industries.
  • Supporting social causes such as education promotion and population control.
  • Playing a role in the national initiative to construct a more improved society.


Governments periodically establish various legislations to ensure the effective regulation and supervision of business activities.

Business professionals are expected to adhere to legal mandates, fulfill government contracts, dutifully and punctually pay taxes, provide the expertise of executives for governmental purposes, offer suggestions for improvements, and submit proposals for the enactment of new business laws.

The organization’s responsibility to government are:

  • Following government regulations in every respect.
  • Not indulging in unfair, unethical trade practices such as over-charging, black marketing, etc.
  • Pay taxes, fees, and duties regularly and honestly.
  • Aiding in pollution control policies and plans initiated by the government.


Business should protect the environment which has acquired great importance all over the world.

The responsibility of businesses to protecting environment are:

  • Carefully using scarce natural resources due to their rapid depletion.
  • Exploring alternative sources is crucial to conserve these resources; for instance, instead of wood and pulp from forests, we can seek alternative materials.
  • Similarly, reducing reliance on coal can be achieved through the adoption of alternative energy sources.
  • We must proactively address environmental pollution and uphold ecological equilibrium.
  • Industrial waste should be handled with care, either through responsible disposal or preferable recycling to reduce pollution.
  • It’s crucial to monitor and regulate toxic waste, excessive noise, chemical pesticides, and automobile exhaust regularly.


The responsibility of businesses to community are:

  • Implementing measures to avoid environmental pollution and safeguard the ecological equilibrium.
  • Restoring the well-being of any population displaced due to business operations, if applicable.
  • Supporting the comprehensive growth of the community.
  • Preserving limited resources and exploring alternatives when feasible.
  • Enhancing the effectiveness of business operations.
  • Participating in research and development activities.
  • Advancing underdeveloped regions.
  • Encouraging the growth of ancillary and small-scale industries.
  • Facilitating contributions to social causes such as education promotion and population control.
  • Playing a role in the national initiative to construct a more improved society.


The responsibility of businesses to suppliers are:

  • Deal on fair terms and conditions.
  • Give orders for purchase of goods regularly.
  • Make timely payment for orders.

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