Introduction: -Business is conducted with the help various interest groups such as investors, owners, employees, consumers, government and society at large. It should be noted that interest of these social group is conflicting in nature and business organizations have to balance it. Interest of all these should be properly protected.
Definitions: - "The personal obligations of the people as they act in their own interest to assure that the rights and legitimate interests of others are not ignored." Defined by.......... (Koontz and O'Donnell)
Responsibilities towards owner: Business should be conducted on profit basis for prosperity and growth of owners. Then only it will be in position to perform any of its social responsibilities towards other interest groups.
Following are the responsibilities towards owners.
1. Reasonable Profit: -Business should focus on basis aim of earning profit and growth. It will bring financial stability of enterprise.
2. Exploiting Business Opportunities: -Business should be ready to take every possible opportunity to deal with. They should be alert to find such opportunities. This is very crucial for its success.
3. Expansion and Diversification: -business should always be developing and growing. Then it will expand and result in diversification. Company should undertake research and development projects to face market competitions.
4. Careful Use of Capital: -Available capital should be used carefully and efficiently by the management to conduct business activity. Risk factors involved in policies should be properly considered. Management should give attention to the safety of the capital.
5. Minimizing Wastages: -Business organization can maximize profitability by minimizing wastages. They should provide due to attention throughout the business. No financial loss should be allowed.
6. Fair Practices on Stock Exchange: -All sorts of unfair practices related to stock exchange should be avoided such as misusing the secret information and providing wrong information, artificially increasing the prices of shares etc. such practices should be strictly prohibited.
7. Efficient Business: -Resources available should be utilized at optimum level. Marketing the best use of resources will increase efficiency and ultimately resulting in raising profitability and productivity.
8. Periodic Information and Creating Confidence: -Owner should get complete and accurate information about the financial position. Company should disclose information through reports, circulars, statement of profit, etc.
9. Effective use of shareholder's fund: -Shareholder's fund must be utilized in best possible manner. Unproductive utilization should be avoided at any cost. It should give short term and long term returns in time.
10. Creating Goodwill: - Management should develop and maintain good public image. A well repute company commands a lot of respect and trust in the share market, labour market and consumer market.
