đ˘ The Social Responsibility of a Commercial Organisation đ¤
đ Definition by H.R. Bowen
“Social responsibility of business refers to the obligation of business to pursue those policies, to make those decisions, or to follow those lines of actions, which are desirable in terms of objectives and values of our society.”
The survival and success of any business fundamentally depend on the dedication and efficiency of its workforce. Fulfilling social responsibilities towards employees and shareholders is crucial for long-term sustainability and growth.
đĽ Responsibilities Towards Employees đ
- Job SecurityEmployees should be provided with a sense of security in their jobs. Offering permanent positions is a key responsibility.
- Fair Compensation đľWorkers deserve adequate wages and financial incentives. Prompt and fair payment is a powerful motivator.
- Optimal Working Conditions ěžě A safe and pleasant work environment is essential, with adequate lighting, ventilation, and minimal pollution.
- Health and Safety Measures ⛑️The company must implement robust measures to protect employee health, including medical access and accident prevention.
- Fair Personnel Policies đTransparent and impartial policies for recruitment, promotions, and transfers are vital to foster a just workplace.
- Worker Participation in Management đŁ️Encouraging employees to participate in management decisions through schemes like quality circles and suggestion boxes can boost morale.
- Grievance Redressal Mechanism ⚖️A formal and effective procedure to handle employee complaints promptly and fairly is crucial for maintaining trust.
đ° Responsibilities Towards Shareholders đš
- Fair Return on Investment (ROI)Shareholders invest with the expectation of a fair return. The management's primary duty is to ensure profitability.
- Growth and Diversification đShareholders expect the management to pursue strategic expansion and diversification to enhance value and spread risk.
- Prudent Use of Funds đŞThe funds provided by shareholders must be utilized optimally. Management is accountable for using capital productively.
- Transparent Shareholder Meetings đ¤Meetings must be conducted fairly, with transparent processes and genuine opportunity for shareholder participation.
- Proper Disclosure & Transparency đManagement must maintain full transparency, with meticulously audited accounts accessible to shareholders.
- Building a Positive Public Image ✨A strong public image and goodwill are invaluable assets that attract talent, customers, and investor confidence.
- Periodic Information and Updates đ˘Shareholders have a right to be kept informed about significant company developments to maintain their trust.
đ§ Potential Criticisms of Multinational Corporations (MNCs) đ
- Exploitation and Monopoly ⚔️ MNCs are sometimes accused of exploiting consumers and local companies in host countries. Being financially powerful, they may use aggressive strategies to eliminate competition and create a monopoly.
- Profit-Driven Investment đ˛ MNCs often prefer to invest in areas with low risk and high profitability. Consequently, critical issues like social welfare or national priorities of the host country may be overlooked.
- Creation of Artificial Demand đ˘ Critics argue that MNCs create artificial demand for their products through extensive and persuasive advertising and sales promotions, encouraging consumerism for non-essential goods.