Social Responsibility of Management and Responsibilities of

Managers

Jaime E. RobrigadoDiscussant

can be defined as the

obligation of management towards the society and

others concerned.

Social Responsibility

Business enterprises are creatures of society and should respond to the demands of society.

If the management does not react to changes in social demands, the society will either force them to do so through laws or will not permit the enterprise to survive

Reason for Social Responsibilities:

Therefore the long-term interests of business are best served when

management assume social responsibilities.

The image of business organization liked with the quality of its products and customer service and the extent to which it fulfills the expectations of owners, employees, consumers, government and the community at large.

For long-term success it matters a great deal if the firm has a favorable image in the public mind

Every business enterprise is a organ of society and its activities have

impact onthe social scene.

Therefore, it is important for management to consider whether their policies and actions are likely

to promote the public good, advances the basic values of society, and constitute to its

stability, strength and harmony.

The 4-Way Test

The test was developed by Rotarian and entrepreneur Herbert J. Taylor during the Great Depression as a

set of guidelines for restoring faltering businesses and was

adopted as the standard of ethics by Rotary in 1942.

The 4-Way Test

It is still seen as a standard for ethics in business management:

Of things we think, say or do:

1. Is it the truth?2. Is it fair to all concerned?3. Will it build goodwill and

better friendships?4. Will it be beneficial to all

concerned?

Increasing concern for the social responsibility of management, it is now recognized that besides taking

care of thefinancial interest of owners,

managers of business firms must also take into account the interest

of various other groups such as employees, consumers, the

government and the community as a whole.

These interested groups are directly or indirectly affected by the pursuit of business activities and they are the stake-holders of the business

enterprise.

Responsibility towards owners:

The primary responsibilities of management is to assure a fair and reasonable rate of return on capital

and fair return on investment can be determined on the basis of

difference in the risks of business in different fields of activity.

Responsibility towards owners:

With the growth of business the

shareholders can also expect

appreciation in the value of their

capital.

Responsibility towards employees:

Management responsibility towards employees relate to the fair wages

andsalaries, satisfactory work

environment, labor management relations and employee welfare. Fair wages should be fixed in the

light of labor productivity, the prevailing wage rates in the same or

neighboring areas and relative importance of jobs.

Responsibility towards employees:

Manager’s salaries and allowances are expected to be linked with their responsibility,

initiative and skill.

But the spread between minimum wages and highest salaries should

be reasonable.

Wages and Salaries

Employees are expected to build up

and maintain harmonious relationships

between superior and subordinates

.

Responsibility towards employees:

Harmony

Another aspect of responsibility towards employees is the provision

of welfare amenities like safety and security of working

conditions, medical facilities, housing, canteen, leave and

retirement benefits.

Responsibility towards employees:

In a competitive market, serving consumers is supposed to be a prime concern of management.

But in reality perfect competition does not prevail in all product

markets. In the event of shortage of supply there is no automatic

correction.

Responsibility towards consumers:

Consumer interests are thus protected to some extent with laws and pressure of organized consumer

groups.

Management should anticipate these developments, satisfy consumer needs and protect

consumer interests.

Responsibility towards consumers:

Goods must be of appropriate standard and quality and be

available in adequate quantities at reasonable prices.

Management should avoid resorting to hoarding or creating artificial

scarcity as well as false and misleading advertisements.

Responsibility towards consumers:

“If your order is late, then its on us.”

“Your safety is our primary concern.”

“If after 10 days you don’t like it, money back guaranteed.”

Responsibility towards consumers:

Responsibility towards the Government:

As a part of their social responsibility, management must

conduct business affair in lawful manner, honestly pay all the

taxes and dues, and should not corrupt public officials for

selfish ends.

Business activities must also confirm to the economic and social

policies of the government.

Responsibility towards the community and society:

The socially responsible role of management in relation to the community are expected to be

revealed by its policies with respect to the employment of

handicapped persons, and weaker sections of the

community, environmental protection, pollution control,

setting up industries in backward areas, and providing relief to the victims of natural

calamities etc.

Are you one of us?

Then, be a socially responsible manager.