6 important grounds why business should be responsible to society


6 important grounds why business should be responsible to society:

Business organizations have to shoulder certain social responsibilities, because they are part of the society and society has invested heavily for the business. Investments on infrastructure, transport, communication, etc are beneficial to the business also. Hence, the business in turn must repay several things to the society.

There are many strong grounds why business should be responsible to society.


(1) Business exists in society and as part of it. It must, therefore, observe the ideals and norms of society.

(2) It is society which supports business, provides it with resources, purchases it products and so on. Doing well to society means just repayment of its debt.

(3) The effluence of many businesses positively damages the air and water of the surrounding locality. They are duty-bound to repair the damage. They must take preventive measures as well.

(4) The Government grants protection, maintains law and order, which enables business to carry on its activities in an unfettered way Business must pay its dues to the Government so that the Government can run and perform its functions.


(5) Workers help production by contributing their labour. They deserve fair treatment and just reward.

(6) Business should make society better and stronger in its own interest. It flourishes best under a system of private enterprise. But organized society may modify or even break up the existing order if it fails to get its dues from business, if its expectation continues to be ignored by it

University of Texas Professor S. Prakash Sethi has identified three stages of social responsibility of the businesses. They are:

1. Social obligation


2. Social Responsibility

3. Social Responsiveness.

Social obligation refers to corporate behaviour designed to deal only with legal requirements and competitive market factors.

Social responsibility according to him refers to corporate behaviour that complies with contemporary values, norms and expectations of the society.


Social responsiveness is the third stage of the corporate behaviour, wherein the management is expected to anticipate various changes and to take appropriate preventive active.

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