Social responsibility of management and responsibilities of managers
Jaime E. Robrigado Discussant Social Responsibility of Management andResponsibilities of Managers
Social Responsibility can be defined as the obligation of management towards the society and others concerned.
Reason for Social Responsibilities:Business enterprises are creatures ofsociety and should respond to thedemands of society.If the management does not react tochanges in social demands, the society willeither force them to do so through laws orwill not permit the enterprise to survive
Therefore the long-term interests of business are best served whenmanagement assume social responsibilities.
The image of business organization likedwith the quality of its products andcustomer service and the extent to whichit fulfills the expectations of owners,employees, consumers, government andthe community at large.For long-term success it matters a greatdeal if the firm has a favorable image inthe public mind
Every business enterprise is a organ of society and its activities have impact on the social scene.Therefore, it is important for management to consider whether their policies and actions are likely to promote the publicgood, 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 wasadopted as the standard of ethics by Rotary in 1942.
The 4-Way TestIt is still seen as a standard for ethics in businessmanagement: 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 nowrecognized that besides taking care of the financial interest of owners, managers ofbusiness 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 ofbusiness activities and they are the stake- holders of the business enterprise.
Responsibility towards owners: The primary responsibilities of management is to assure a fair andreasonable rate of return on capital and fairreturn 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 and salaries, satisfactory work environment,labor management relations and employee welfare. Fair wages should be fixed in the light of labor productivity, the prevailing wagerates 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 wagesand highest salaries should be reasonable.
Responsibility towards employees: Employees are expected to build up and maintain harmonious relationships between superior and subordinates.
Responsibility towards employees: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 consumers:In a competitive market, serving consumers is supposed to be a prime concern of management.But in reality perfect competition does notprevail in all product markets. In the eventof 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 thesedevelopments, satisfy consumer needs and protect consumer interests.
Responsibility towards consumers:Goods must be of appropriate standardand quality and be available in adequate quantities at reasonable prices.Management should avoid resorting tohoarding 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 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 ofmanagement in relation to the community are expected to be revealed by its policies with respect to the employment ofhandicapped 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 sociallyresponsible manager.