Types of Social Responsibilities of a Business

What is Social Responsibility?

An organization’s obligation to make decisions and perform them for the benefit of society and its values is known as the social responsibility of a business. It is assumed under social responsibilities that businesses will respect the values and aspirations of society and try their best to fulfil these aspirations and accomplish their business goals. In simple terms, it is the responsibility of an organization to be a responsible member of society and work towards its betterment. However, according to critics, social responsibility practices are exact opposites of the major motive of a business’s existence. Social responsibility in business is also known as Corporate Social Responsibility (CSR).

For example, a factory not disposing of its chemicals and waste in the water bodies, improving working hours and conditions of the employees, donating part of the firm’s profits to educational services for poor children, etc. Social responsibilities performed by the companies not only help society but also help the business gain a positive image and build its brand in the market. It motivates the employees of the firm to work hard, as they feel good to be a part of an organization that works well for society and respects its values.   

Types of Social Responsibilities

1. Economic Responsibility:

As we know, a business organization is an economic entity; therefore, economic responsibility is its primary social responsibility. In simple terms, economic responsibility means producing goods and services according to the needs and wants of the customers and selling them the same at a profit. It means that the organizations should understand whether the customers are demanding quality or price and then provide them with the same. Earning profit is a responsibility of the business as it ultimately increases the incentives of the employees. Therefore, the economic growth of an organization affects society as a whole.  

2. Legal Responsibility:

It is the duty and responsibility of an organization to legally abide by the rules, laws, and regulations while performing business activities. As the authorities enact these laws for the good of society, an organization following these rules is a socially responsible firm. Besides, an organization performing activities as per the laws gets no interference from the government. Legal responsibilities include paying taxes on time to the government, keeping its books of accounts and financial statements clean and accurate, etc. 

3. Ethical Responsibility:

It is the behaviour expected from business organizations’ by society; however, it is not codified in the law. Therefore, there is no legal obligation on the companies to perform ethically responsible activities. Ethical responsibility is beyond the laws and includes fair trade practices, respecting the religious sentiments of people, maintaining and protecting the environment, etc. It also means that a business should not get involved in black marketing, adulteration, fraud, etc. 

4. Discretionary Responsibility:

It is a philanthropic responsibility and is completely voluntary. It includes charitable services, providing education facilities to poor people, helping people affected by floods or other natural calamities, donating to healthcare facilities for those who cannot afford them, etc. The management of an organization is responsible for avoiding speculative activities and safeguarding its capital investment by undertaking healthy business ventures only that can provide them with good ROI(Returns on Investment).