Question

Discuss the forces which are responsible for increasing concern of business enterprises towards social responsibility

Answer 1

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The following forces have been responsible for increasing concern of business enterprises towards social responsibility.

• (i) Threat of Public Regulation Threat of public regulation is one important reason due to which business enterprise feels concerned with social responsibility. Democratically elected governments have to take care of every section of the societies thus regulating the businesses behaving in a socially irresponsible manner.

• (ii) Pressure of Labour Movement Labour movement for ensuring fair gains for the working class throughout the world has become very powerful as labour has become far more educated and organized. This has forced business enterprises to pay due regard to the welfare of workers.

• (iii) Impact of Consumerism Development of education and mass media and increasing competition in the market have made the consumer aware of his rights and power which has forced business enterprises to follow a customer oriented approach.

• (iv) Development of Social Standard for Business New social standards consider economic activity of business enterprises as legitimate but with the condition that they must also serve social needs. Business functioning is to be ultimately judged on the basis of social standards.

• (v) Development of Business Education Educated persons as consumers, investors, employees, or owners have become more sensitive towards social issues with the development of business education with its rich content of social responsibility.

• (vi) Relationship Between Social Interest and Business Interest Business enterprises have started realizing the fact that social interest and business interest are complementary to each other and that long-term benefit of business lies in serving the society well.

• (vii) Development of Professional, Managerial Class Previously business was managed by the owners but now professional management education in universities and specialized management institutes have created a separate class of professional managers who have a positive attitude towards social responsibility along with profit earning.

Answer 2

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• Threat of Public Regulation: The government is meant to safeguard the interests of society. Thus, in case the government feels that a business enterprise is behaving in a manner that is not socially desirable, then it can regulate the operations of that enterprise accordingly. -enterprises-towards-responsibility
• Pressure of Labour Movement: The increase in capital mobility over time has increased the pressure on business enterprises to pay attention to the welfare of workers, by providing them with healthy working conditions along with good remuneration. -enterprises-towards-responsibility
• Impact of Consumer Consciousness: As consumers today are aware of their rights and responsibilities, they take their decisions more rationally. Thus, business enterprises are made to work more efficiently and produce better products at reasonable rates to satisfy their customers.
• Development of Social Standards: Business enterprises are not merely profit-making entities. For their long-term growth and existence, they require fulfilling the new standards of social welfare.