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BUSINESS RESPONSIBILITIES AND SOCIETYS WELLBEING

Introduction:

Simply the word Business refers to all those activities which are
connected with production or acquisition of wealth through buying
and selling goods. In other words, business means the creation
and supply of utilities in the shape of goods and services for
earning profit. Earning profit is the main motives of business. But
besides earning profit business has some responsibilities to the
society as business operates its activities within a society and
business itself is a powerful member of a society. At the same
time business should be responsible to the society, as the success
of a business depends on the favorable attitudes and behaviors of
the members of the society towards business.

This article is intended to explore the responsibilities of business

towards society and the impact of those responsible activities on
the well-being of the society as a whole.

Relationship between business and society:

Simply society means the aggregate of people living together in a

more or less ordered community . Actually society includes the
people as well as the institution (business and other institution).
So we can say that business is an important member of the
society because business hold maximum amount of resources of
the society. Again business is not a separate entity, it consist of
people. That means the employee, owner of the business in turn
become the member of the society. So we can say that business
and society is highly correlated.

Wikipedia definition
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(http//en.wikipedia.com)
Md. Masud-ul-Hasan, BBA, Department of marketing, University of
Rajshahi, Bangladesh

In a functional viewpoint we can say that society is the function of

people and different types of business and non business
institution within a certain area.

That means-

Society= (people, business firm, other government and non-

government institution)

How business activities related with society:

Businesses affect the societies in which they operate. A sole

trader running a small grocery store may benefit local residents
by providing daily necessaries. On the other hand such a business
may have negative effects. Canned drinks bought from the shop
may be left in the street. Decisions made by a multinational
company can have a huge impact in many different countries. For
example, it may decide to relocate its factory from one country to
another. This is likely to lead to a fall in income and employment
in the country that the company has left. The new location may
gain from more jobs, the building of infrastructure, such as roads,
and perhaps spending on health care and community projects. On
the other hand it also may damage the agriculture area. For
example, when TATA group of India wants to establish its factory
area SINGUR then the local people protests it due to hamper of
their agricultural activities.

These examples show that businesses do not operate in isolation.

The decisions they make can affect a range of other groups and
individuals. The businesses can be seen as part of the societies in
which they operate. As a result, governments often pass laws and
set regulations to control the conduct of businesses.
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It is possible that the activities of business can have certain

beneficial effects on the environment. For example, a new factory
may be built in a neglected area. The new premises may be
landscaped, improving the view. It can build bench besides the
road which could be used by pedestrians.

Business creates employment for many people of the society and

those people earn money from those business firm. And in turn
people lead their lives.

Md. Masud-ul-Hasan, BBA, Department of marketing, University of

Rajshahi, Bangladesh

Business produces the necessary goods, service and distributes

them to the member of society. Thus business maintains and
increases the standard of living.

Businesses are becoming more and more aware of the need to

consider the environment in their operations. Many critics of
certain business activities suggest that they have a negative
effect on the environment in the surrounding area. Some of the
negative effects of business activity include:

Air pollution caused by the discharge of emissions into the

atmosphere and traffic visiting retail outlets;

Water pollution as a result of the dumping of waste;

Congestion from employees going to work or consumers visiting

retail outlets;

Noise from factories and traffic;

Destruction of natural habitats from the building of premises.

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Why business be responsible towards society:

Earlier I discussed about the relationship between business and

society and actually that relationship is the basis of business for
being responsible to the society.

According to the Iron Law of Responsibility business should

balance their responsibility with the power they hold. As business
holds large amount of social power, it affects the environment,
consumers, community conditions, and many other areas of
society. In turn, an equal amount of responsibility is required to
match its power. Responsibility is a reciprocal of power. If business
insists on avoiding social responsibility, then its social power
gradually be taken away by other groups.

Again the profit of business is ultimately lies on the favorable

response of the societys member (consumer), so as and when
business acts its activities in a responsible manner to the society
only then business can gain success in todays competitive
business environment.

Sometimes governments pass laws and set regulations to control

the conduct of businesses. For instances Consumer laws try to
ensure that businesses do not deliberately mislead consumers.
Employment laws attempt to provide safe working conditions and
set standards for working hours and payments. Those laws also
mandate the business to be responsible towards the society.

What are the responsibilities of business towards society:

Business operates its activities within a society and towards the

member of society for earning profit. So besides earning profit
business should be careful so that by its activities, society and its
member would not be negatively affected. Actually the
responsibility of business depends on what the member of the
society expects from business as a whole. It may vary from
society to society and from culture to culture.
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In general the responsibilities of business towards different

stakeholders (societies) like the workers, the consumers, the
government and the community and public are discussed below-

(a) Responsibility towards the shareholders or owners:

The shareholders or owners are those who invest their money
in the business. They should be provided with a fair return on
their investment. You know that in case of companies it takes
the form Business around Us dividends. It has to be ensured
that the rate of dividend is commensurable with the risk
involved and the earnings made. Besides dividends, the
shareholders also expect an appreciation in the value of
shares. This is governed primarily by companys performance.
(b) Responsibility towards the Employees:
A business enterprise must ensure a fair wage or salary to the
workers based on the nature of work involved and the
prevailing rates in the market. The working conditions must be
good in respect of safety, medical facilities, canteen, housing,
leave and retirement benefits etc. They should also be paid
reasonable amount of bonus based on the business earnings.
Preferably, there should also be a provision for their
participation in management
(c) Responsibility towards the Consumers:
A business enterprise must supply quality goods and services
to the consumers at reasonable prices. It should avoid
adulteration, poor packaging, misleading and dishonest
advertising, and ensure proper arrangement for attending to
customer complaints and grievances.
(d) Responsibility towards the Government:
A business enterprise must follow the guidelines of the
government while setting up the business. It should conduct
the business in lawful manner; pay the taxes honestly and on
time. It should not indulge in any corrupt practices or unlawful
activities.
(e) Responsibility towards the Community and
environment:
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Every business is a part and parcel of our community. So it

should contribute towards the general welfare of the
community. It should preserve and promote social and cultural
values, generate employment opportunity and contribute
towards the support of weaker sections of the society. It must
take every step to protect the physical and ecological
environment of the society. It should contribute to the
community development programs like public health care,
sports, cultural programs.

How those responsibilities affects social well-being:

Social well-being can be defined as a state of affairs where the

basic needs of the population are met. This is a society where
income levels are high enough to cover basic wants, where there
is no poverty, where unemployment is insignificant, where there
is easy access to social, medical, and educational services, and
where everyone is treated with dignity and consideration.

http://www.answers.com/topic/social-well-
being

The above definition is in the context of developed countries but

in our society social well-being can be defined as the situation
where the member of the society live in peace and happy. This
social well-being is depending upon the responsible performance
of each and every member of the society. And as business is most
powerful social member so we can say if business become
responsible to the society then the social well-being will be more
ensured.

We have point out some social responsibilities towards different

stakeholders of the business (also the member of the society) in
above paragraph. And if the business performs these
responsibilities towards the member of the society then ultimately
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society will be benefitted and the member of the society become

more positive to the business and business will also be benefitted
thus finally social well-being as a whole will be ensured.

Conclusion:

Todays business environment is very much competitive. Many

alternative options are available to the consumer. Business firm is
facing the problems of deregulation, increasing number of
different pressure groups. These entire situations leads a firm to
be socially responsible one and being socially responsible both
business firm and society is benefitted and thus social well-being
is ensured as a whole.