Now-a-days consumers and workers are well informed about their rights. Consumers expect better quality products at reasonable prices. Similarly, workers desire fair wages and other benefits.

Every business has a responsibility to operate within the laws of the land. Since these laws are meant for the good of the society, a law abiding enterprise is a socially responsible enterprise as well.

According to Peter F. Drucker "Social Responsibility requires managers to consider  whether their action is likely to promote the Public good, to advance the basic beliefs of  our society to contribute to its stability, strength and harmony".

1. Ethical responsibility includes the behaviour of the firm that is expected by society but not codified in law.
2. For example, respecting the religious sentiments and dignity of people while advertising for a product.

A business organisation is a coalition of several interest groups or stakeholders like shareholders, customers, employees, suppliers, etc.

1. A Business Enterprise which accepts and discharges social obligations enjoys greater freedom.
2. For Example, the government has passed the consumer protection Act to prevent businessmen from indulging in adulteration, black marketing and other anti-social practices.

1. Every businessman earns prosperity from business and should give back the benefit of this prosperity to society.
2. This is voluntary.
3. This benefit is the moral responsibility of business.
4. As this benefit is supposed to be passed on to society, it can be said to be Social responsibility of Business.

1. Owners are the persons who own the business.
2. They contribute capital and bear the business risks.
The primary responsibilities of business towards its owners are to
(a) Run the business efficiently.
(b) Proper utilisation of capital and other resources.
(c) Growth and appreciation of capital.
(d) Regular and fair return on capital invested.

1. Products and services must be able to take care of the needs of the customers.
2. Products and services must be qualitative.
3. There must be regularity in supply of goods and services.

Kinds of Social Responsibility:
1. Economic Responsibility
2. Legal Responsibility
3. Ethical Responsibility
4. Discretionary Responsibility

The benefits derived by employees of a Socially Responsible business enterprise are:
1. Timely and regular payment of wages and salaries.
2. Proper working conditions and welfare amenities.
3. Opportunity for better career prospects.
4. Job security as well as social security like facilities of provident fund, group insurance, pension, retirement benefits, etc.
5. Better living conditions like housing, transport, canteen, creches, etc.
6. Timely training and development

The following are some important definitions of social responsibility:
"Social Responsibility refers to the obligation to pursue those policies to make those decisions or to follow those lines of action which are desirable in terms of objectives and values of our society." - Howard R.
"Social Responsibility requires managers to consider whether their action is likely to promote the public good, to advance the basic beliefs of our society, to contribute to its stability, strength and harmony". Peter F. Drucker.

Kinds of Social Responsibility:
(i) Economic Responsibility :
1. A Business Enterprise is basically an Economic Entity and, therefore, its Primary Social Responsibility is economic i.e. produce goods and services that society wants and sell them at a profit.
2. There is little discretion in performing this responsibility.
(ii) Legal Responsibility :
1. Every Business has a responsibility to operate within the laws of the land.
2. Since these laws are meant for the good of the Society, a law abiding enterprise is a socially Responsible Enterprise as well
(iii) Ethical Responsibility :
1. This includes the behaviour of the firm that is expected by Society but not codified in law.
2. For Example: Respecting the religious sentiments and dignity of people while advertising for a product.
3. There is an element of voluntary action in performing this responsibility.
(iv) Discretionary Responsibility :
(1) This refers to purely voluntary obligation that an enterprise assumes, for instance, providing charitable contributions to educational institutions or helping the affected people during floods or earthquake.
(2) It is the responsibility of the company management to safeguard the Capital Investment by avoiding speculative activity and undertaking only healthy Business ventures which give good returns on Investment.

Arguments against social responsibilities:
Critics of the social responsibility concept put forward the following arguments.
(i) Lack of conceptual clarity :
(1) The concept of Social responsibility is very vague and amenable to different interpretations.
(2) There is no consensus on its meaning and scope.
(3) In such a situation, it would be futile as well as risky to accept social responsibility.
(ii) Dilution of Economic goals :
(1) By accepting social responsibility, business compromise with Economic goals
(2) Business is an Economic Institution and its only responsibility is to make maximum possible profits for its owners.
(3) It would endanger its Economic viability by accepting any other responsibility.
(iii) Lack of Social skill :
(1) Business organisations and their managers are not familiar with social affairs.
(2) There are special social service organisations such as Government and Non-governmental Agencies which can better deal with Social problems.
(iv)  Burden on consumers:
(1) If Business deals with Social problems, cost of doing Business would increase.
(2) These costs will be passed on to consumers in the form of higher prices or will have to be borne by owners.
(3) This would lead to taxation without representation.
(v) Responsibility without power:
(1) Business organisations possess only economic power and not social power.
(2) It is unjust to impose social responsibilities with social power.
(3) If Business is allowed to intervene in social affairs it may perpetuate its own value system to the detriment of society.
(vi) Misuse of Responsibilities: 
(1) Acceptance of social responsibilities will involve diversion of precious management time and talent on social action programmes.
(2) It may result in dilution of valuable corporate resources.
(vii) lack of Yard stick :
(1) Profitability is the common .criteria for decision - making in Business.
(2) Tampering it with social responsibility would make the decision-making process quite complex and controversial.
(viii) Improper role:
(1) The proper role of Business is to use  its resources and energies efficiently so as to earn the best possible return .on Investment within the confines of law and ethics.
(2) Business should concentrate on economic performance leaving social service to other organisations.
(ix) Overloading Responsibility :
(1) Business organisations are already serving society by providing goods and services, generating employment, developing technology and contributing to public exchequer through tax payments.
(2) It would be unjust to overburden them with further responsibilities.

Definition of Social Responsibility:
The following are some important definitions of social responsibility:
"Social Responsibility refers to the obligation to pursue those policies to make those decisions or to follow those lines of action which are desirable in terms of objectives and values of our society."- Howard R.
"Social Responsibility requires managers to consider whether their action is likely to promote the public good, to advance the basic beliefs of our society, to contribute to its stability, strength and harmony". Peter E. Drucker
Need for Social Responsibility:
Business is expected to be responsible to society due to the following reasons:
a) Self-Interest:
1. A business unit can sustain in the market for a longer period only by assuming some social obligations.
2. Normally businessmen recognise that they can succeed better by fulfilling the demands and aspirations of society.
3. People who have had a higher standard of living and have been exposed to an environment conducive to healthy growth make better employees and customers for business than those who are poor, ignorant and oppressed.
b) Creation of Society:
1. Business is a creation of society and uses the resources of society.
2. Therefore, it should fulfil its obligations to society.
3. Businessmen should respond to the demands of society and should utilise the social resources for the benefit of the people at large.
4. In the long run a successful business can be built on the foundations of a happy community and a satisfied work force.
c) Social Power:
1. Businessmen have considerable social power. Their decisions and actions affect the lives and fortunes of the society
2. They collectively determine for the nation such important matters as level of employment, rate of economic progress and distribution of income among various groups.
3. Businessmen should assume social obligations commensurate with their social power.
4. The government controls and regulations intervene in the social power of business in the absence of business taking up social responsibility.
5. It is, therefore, the moral and right thing for business enterprises to assume social obligations.
d) Image in the Society:
1. A business can improve its image in public by assuming social obligations.
2. Good relations with workers, consumers and suppliers help in the success of business.
3. Social obligations improve the confidence and faith of people in a business enterprise.
e) Public Awareness:
Now-a-days consumers and workers are well informed about their rights.
1. Consumers expect better quality products at reasonable prices
2. Similarly, workers desire fair wages and other benefits.
3. They exercise pressure on the employer's through-trade unions.
4. There will be industrial unrest and conflict in society,if business does not fulfil its obligations.
f) Free Enterprise :
1. A business enterprise which accepts and discharges social obligations enjoys greater freedom.
2. For example, the government has passed the Consumer Protection Act to prevent businessmen from indulging in adulteration, black marketing and other anti-social practices.
3. Thus, social responsibilities are essential for avoiding governmental action against business.
4. Such action will reduce the freedom of decision making in business.
g) Law and Order:
1. Any business unit can survive and grow only.when there is law and order in society.
2. If business exploits the weaker sections of society for too long, these sections will take the law in their own hands.
3. The resulting chaos will threaten the very survival of business.
h) Moral Justification:
1. In a large country like India, government alone cannot solve all the problems.
2. Business has money and talent with which it can assist the government in solving problems.
3. For example, business can play a vital role in solving regional disparities, unemployment, illiteracy, scarcity.of foreign exchanges and such other problems in the country.
4. Moreover, business has created some social problems such as pollution, health hazards, etc.
5. Therefore, business should help society in solving its problems.
i) Socio-Cultural Norms:
1. India has a rich cultural heritage.
2. Businessmen who help in preserving and promoting this heritage will naturally enjoy the patronage of the society and the government.
3. Business should, therefore, promote equality of opportunity, healthy relations with employees and customers, etc.
i) Professionalism:
1. Management of business enterprises is being professionalised.
2. An owner-manager nurses a greater greed for profiteering because all the gains go to him.
3. But a salaried and qualified manager is less likely to be lured because he does not benefit from the profits earned through questionable practices.
k) Trusteeship:
1. Mahatma Gandhi suggested that "those who own money or property should hold and use it in trust for society."
2. Businessmen should run business firms not for their self - enrichment but for the good of the society.