Obligations Of Business Towards Different Segments Of The Society

Obligations towards owners or shareholders

In the case of sole trader ship and partnership concerns, the owners can look after their interest themselves. Where as in the case of the company, the directors have the following responsibilities towards the shareholders:

  1. Reasonable Dividend: shareholders are a source of funds for the company. They Management and Society expect a high rate of dividend on the money invested by them and also the maximization of the value of their investment in the company.

  2. Protection of assets: The assets of the company are purchased with shareholders funds. Therefore the company is responsible to safeguard these assets.

  3. Information: It is the responsibility of the management to keep the shareholders informed about the financial position as well as the progress of the company.

Obligations towards Customers

Customer's satisfaction is the ultimate aim of all economic activity. Therefore, it is, theduty of management

  1. To make goods of the right quality available to the right people at the right time andplace and at reasonable prices.
  2. The business should not indulge into unfair practices such as black marketing, hoarding, adulteration etc.
  3. To provide prompt and courteous service to customers.
  4. To handle customers grievances carefully.
  5. To distribute the goods and services properly so that the customers do not face any difficulty in purchasing them.
  6. To produce goods which meet the needs of the customer who belong to different classes, tastes and with different purchasing power.

Obligations towards Employees

Employees should be treated as human beings and their co-operation must be achieved for the realization of organizational goals. The business should fulfil the following obligations towards their employees.

  1. Fair wages: Business should pay reasonable salaries so that their employee's may lead a good life and satisfy their needs.
  2. Adequate benefits: Employees should be provided benefits like housing, insurance cover, medical facilities and retirement benefits.
  3. Good Working Conditions: Good working conditions are necessary to maintain the health of the workers. Therefore they must be provided with good working conditions.
  4. Opportunity for Growth: Business should give their employees opportunity to develop their capabilities through training and education.
  5. Recognition of Worker's Rights: The business should recognize the worker's right to fair wages, to form trade unions, to collective bargaining etc.
  6. Co-operation: The business must win the co-operation of the workers by creating the conditions in which workers are willing to put forward their best efforts towards the common goals of the business.

Responsibility towards Suppliers

The business must create healthy relations with the supplier. Management should deal with them judiciously. They should be provided with fair terms and conditions regarding price, quality, delivery of goods and payment.

Obligations towards Government

It is the duty of every business enterprise to manage its affairs according to the laws affecting it. It should pay taxes and other dues honestly. It should not encourage corruption,black marketing and other social evils. It should discourage the tendencies of concentration of economic power and monopoly and should encourage fair trade practices.

Obligation towards Society

Every business owes an obligation to the society at large. The following are the important obligations of business towards society.

  1. Socio-Economic Objectives: A business should not indulge in any practice which is not fair from social point of view. The business should use the factors of production effectively and efficiently for the satisfaction of the needs of the society.

  2. Employment Opportunities: It is the responsibility of management to help increase direct and indirect employment in the area where it is functioning.

  3. Efficient use of Resources: The resources at the command of business belongs to the society. Therefore, the business should make the best possible use of the resources at its disposal for the well being of the society.

  4. Business Morality: The business should not indulge into anti-social and unfairtrade practices such as adulteration, hoarding and black marketing.

  5. Improving local environment: Business should take preventive measures against water and air pollution. It can develop the surrounding area for the well being of the employees and the general public. A business can also contribute to the advancement of local amenities.

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Principles of Management and Organisational Behaviour Topics