Interrelationship Between Management Functions

SOCIAL RESPONSIBILITY TOWARDS DIFFERENT INTEREST GROUPS

A business is a social institution. It has attraction with various stakeholders or groups of the society, such as owners, employees, customers, suppliers and government and society. As shown in Figure. It should fulfill its obligations to each of these groups.The specific responsibility of business towards various groups are discussed below:

Responsibility Towards Owners or Investors. The owners or investors provide funds to the business. They expect a high rate of return on their investments. They also expect appreciation in the value of their investments in their business. The responsibilities of business towards the owners or shareholders are as follows:

1. To ensure a fair and regular return on the investment of owners or shareholders.
2. To ensure safety of investment.
3. To strengthen financial position of the company so as to ensure capital of the company.
4. To keep the owners well informed about the progress and financial position of the company.
5. To safeguard the assist of the business.
6. To protect the interests of all types of investors in the business.

Responsibility Towards Employees. Workers are a source of labour. Their cooperation must be achieved for the realization of business objectives. The management should fulfill the following obligations toward the workers:

1. To pay reasonable wages and salaries to its employees so that they may satisfy their needs and lead a good life.
2. To provide good working conditions to maintain the health of the workers.
3. To provide service benefits such as housing and medical facilities, insurance in the business.
4. To win the cooperation of the workers by creating better human relations in the business.
5. To recognize the workers' rights to participate in decisions affecting their working life, to form trade unions and to go on strike for the protection of their interests.
6. To provide adequate opportunities to the workers to develop their skills through training and education.

Responsibility Towards Customers. Customer satisfaction is the ultimate aim of all economic activities. This involves more than the offer of products at the lowest possible price. Adulteration of goods, poor quality, failure to give fair measure, lack of service and courtesy to the customer, misleading through dishonest achievements, etc., are examples of violation by business enterprise of its obligations towards the consumers of its products. Therefore, it is the duty of management:

1. To produce goods which meet the needs of the consumers of different classes, tastes and with different purchasing power.
2. To provide goods to the consumers at reasonable prices.
3. To provide prompt, adequate and courteous services to the customers.
4. To handle the customers' grievances quickly and carefully.
5. To ensure regular supply of goods and services.
6. To ensure that advertisement and other statements issued by the business are truthful.
7. To follow fair trade practices.

Responsibilities Towards Suppliers. Management should deal with the suppliers judiciously. It should offer them fair terms and conditions regarding prices, quality, delivery of goods and payment. In the absence of Fair dealings, the suppliers will not supply them the goods on credit. In short, management must create healthy relations with the suppliers:

1. To ensure regular payments to the suppliers.
2. To assist the small scale suppliers by placing orders with them.
3. To avoid exploitation of the suppliers.
4. To help the suppliers in improving the quality of their products.

Responsibility Towards Government. The specific responsibilities of business towards government are as follows:

1. To abide by the laws of the nation, and also the policies or guidelines issued by the government.
2. To pay taxes honestly, and in time to the government.
3. To avoid corrupting government employees.
4. To discourage the tendencies of concentration of economic power and monopoly.
5. To encourage fair trade practices in the country.
6. To adopt fair dealings in foreign trade.

Responsibility Towards Community and Society. Every business owes an obligation to the local community and general public or society at large. The specific responsibilities or business towards the community and society are discussed as follows:

1. To work for the improvement of the local environment where the plant is located.
2. To provide for welfare of the local community through opening dispensaries, etc.
3. To ensure safety of local server surroundings.
4. To take steps against air, water and noise pollution.
5. To ensure efficient use of national resources.
6. To generate employment opportunities.
7. To provide high quality product to the society.
8. To improve the quality of life of the workers.
9. To preserve and promote social and cultural values.
10. To promote national integration.