(A) Meaning and Definition : Social responsibility is an obligation of the business organisation to take those decisions and perform those actions which are desirable to fulfil the objectives and add values to our society. The business organisations are expected to perform all the activities of their business in such a manner that such activities will not cause any harm to any part of the society.

In other words, the business enterprises should undertake such activities which will protect and contribute to the interest of society and fulfil their expectations. According to Howard D. Bowen “Social Responsibility is to pursue those policies to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society.” In brief, social responsibility comprises of an element of voluntary action taken by the business people for the benefit of the society.

(B) Need for social responsibility:

(1) Concept of Trusteeship : Trusteeship is a socio-economic philosophy that was advocated by Mahatma Gandhi. According to it, rich (wealthy) people would be trustees of the trusts that take care of the welfare of the people in general. Businessmen are treated as trustees of society.

(2) Changing expectations of society : Over the years, society’s expectations from the business organisation have undergone severe change. In earlier days, business firms were recognised as the providers of goods and services. However in recent years society expects that every business organisation as a responsible citizen should contribute towards social welfare of the people in the society.

(3) Reputation : Business organisations spend large amount of money in brand building and in creating and strengthening their favourable image. The business organisations which care for every organ of the society and contribute to social wellbeing enjoy a good reputation in the society. Such organisations always get good support from the public which in turn increases sales, profitability, attraction of talent and sustained growth.

(4) Protection of environment : It is the social responsibility of the business organisations to make proper and careful use of country’s natural resources. They should not cause environmental pollution (degradation) like contamination pollution of water resources, depletion of ozone layer, etc. Such type of pollutions result in poor health of the community and put a question mark on the survival of human species/race.

(5) Optimum utilisation of resources : Usually, large business organisations have huge amount of resources such as manpower, talent, finance and expert at their disposal to use. It is the social responsibility of business organisations to make optimum use of available resources to protect society’s interests. The organisation should always avoid wastage of resources.

(6) Pressure of trade union : The workers have now become more conscious of their rights and privileges. In recent years, trade unions play significant role in business environment.

The workers have realised that their efforts contribute to the profits of the business organisation and expect management to pay them fair wages, bonus, etc. to minimise or avoid conflicts between trade unions and management. The business organisations should understand the responsibility towards employees to avoid conflicts and act accordingly.

(7) Growth of consumer movement : Advancement and growth in education, development of mass media and growing competition in the market create awareness among the consumers about their rights and powers. Hence, business organisation are required to follow consumer-oriented policies.

(8) Government control : From the side of business organisation, government rules and regulations are not desirable. This is because government put certain restrictions and limit the freedom of business organisations. In order to put moral and legal pressure on business, the government has enacted several laws such as Consumer Protection Act, 1986, Air Pollution Act, Food Adulteration Act, etc.

(9) Long term self interest : A business organisation and its image stand to earn handsome profit in the long run if its motive is providing services to the society. When the workers, consumers, shareholders, government officials and members of the public feel that a business organisation is indifferent to the social interests, they may withdraw their support to end cooperation. Therefore, it is in the long-term interest of the business organisation to be socially useful and fulfil its social responsibility.

(10) Complexities of social problems : Many a time some business organisations themselves create social problems such as discrimination in treatment, unsafe workplaces, different types of pollutions, etc. It is the moral and social obligation of the business organisation to solve these social problems.

(11) Globalisation : In globalisation, business activities are conducted throughout the world. In recent years, the entire globe (world) has becomes the market place for buying and selling goods and services produced in any part of the world. Globalisation creates and provides more opportunities, threats and challenges to the business organisations. Those countries in the world which have followed good and fair trade practices capture and influence the entire world trade.

(12) Role of media : By using internet, it is easier to approach the common people. Media is dynamic and active which can influence large number of people in the society. Media is useful to raise voice against malpractice and exploitation of the consumers. Media plays important and active role in public life. Thus, Business organisation should not neglect the social values.