Social Responsibilities of Business

Business is a social institution. It is operated within the society, for the people and by the people living in the society. It exists, survives, operates and grows. In the society. Therefore, it has certain obligations towards society, which are known as social responsibilities. A business must always recognize and understand the aspirations of the society and try to meet them.

According to Keith Davis andBlamestorm, “social responsibility refers to the obligation of decision makers of the business to take actions which protect and improve the welfare of the society as a whole along with their own interests.”

According to J.L Paluszek, “Corporate social responsibility is seriously considering the impact of company's activities in society.”

Responsibility towards Investors


Shareholders are the owners of the business. They invest capital for the establishment of the business and bear a risk of loss. Shareholders have a direct interest in the welfare and the development of the business. The main responsibilities of business towards shareholders are:

  • To ensure safety of capital Investment
  • To provide equal opportunity to all the shareholders to participate in the management of the business as facilitated by the law.
  • To provide a fair and adequate return on shareholders’ investment.
  • To provide correct and regular information of financial and other transactions.
  • To maximize the value of capital investment through optimum utilization of resources.

Responsibility towards Consumers


Consumers are the king of the market. It is the main source of revenue of the business organization. They are the key figures in the market for the growth and development of a business. The main responsibilities of business towards consumers are:

  • To supply better quality goods at the right time in reasonable price.
  • To provide after sale service on the basis of nature of a product.
  • To provide information about the changes introduced by the business.
  • To take necessary steps to improve quality, reduce price and develop the network for distribution.
  • To avoid unfair trade practices like black marketing, adulteration, false advertising etc.

Responsibility towards Employees

Employees are the greatest assets for all business. Business cannot be run alone by inventors and owners only. It needs the help of employees and workers. They are the assets of the business organization and their welfare is moral responsibility of business. The following are the responsibility of business towards its employees:

  • It ensures job security
  • It creates a cordial relationship between management and workers.
  • It participates employees in decision making and profit sharing programs.
  • It provides opportunity for training, promotion and career development
  • It hears and handles the grievances of employees and workers.

Responsibility towards Community

Community represents the group of people in the immediate surroundings of a business. Business is a social institution, it must be responsible towards its society where it exists, survives and grows. It must consider the social aspirations and try to fulfill them. The main responsibilities of business towards community are as follows:

  • It promotes the social values and norms
  • It utilized the resources of the community
  • It provides the financial assistance to educational institutions hospitals, libraries, clubs etc for their operations.
  • To protect the environment from pollution and maintain ecology.
  • To create employment opportunities for the skilled, unskilled and unskilled workers.

Responsibility towards Government

Government plays an important role in creating favorable conditions for the establishment, operation and the growth of the business by formulating appropriate policies and developing necessary infrastructures. The following responsibilities towards the government are as follows:

  • It pays taxes honestly and regularly
  • It supports the government to improve the quality of life
  • It follows the rules, regulations and laws of the country
  • It avoids monopolistic and unfair trade practices
  • It provides important business information and advice to the government whenever required.


Khanal, Soma Raj, Surendra Thapa Aslami and Sitaram Dhakal. Business Studies. Kathmandu: Taleju Prakashan, 2067.

Pant, Prem R., et al. Business Studies. Kathmandu: Buddha Academic Publishers and Distributors Pvt. Ltd., 2010.

Social Responsibilities of Business 

  1. Responsibility towards Investor
  2. Responsibility towards Customers
  3. Responsibility towards Employees
  4. Responsibility towards Community
  5. Responsibility towards Government



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