SOCIAL RESPONSIBILITY

For most of the organisations, social responsibility is a way of life. Social responsibility refers to the process which includes several activities ranging from providing safe products and services to giving a portion of the companys profits to welfare organisations with a philanthropic perspective. Social responsibility of a business is also viewed as conducting its operations in a free and fair manner by discharging its commitment towards different segments of its operational environment such as shareholders, consumers, employees, creditors, Government, competitors, and the general public as explained below: a) Responsibility towards shareholders The business enterprise has the responsibility to provide fair return on capital to the shareholders. The firm must provide them regular, accurate, and full information about the working of the enterprise in order to fulfill and encourage their interest in the affairs of the company. b) Responsibility towards consumers The management has to provide quality products and services to the customers at reasonable prices. It should consider customer-suggestions and also plan its services more effectively through consumer satisfaction surveys, which focus n unfulfilled customer expectations. c) Responsibility towards employees Good working conditions motivate workers to contribute their best. It is the responsibility of the management to recognize their unions and respect their right to associate with a union of their choice. The management has to provide a fair deal to its employees by planning for social security, profit sharing, growth and development promotions, grievance settlement machinery, and employee welfare. d) Social responsibility towards creditors The business has to repay the loans it has taken from the financial institutions as per the repayment schedule. Also it should inform the creditors about the developments in the company from

time to time. The business firm has to live up to the ethical and moral expectations of its creditors by fulfilling its commitments. e) Responsibility towards the Government The business firm has to pay its taxes and be fair in its endeavours. It should also support the Government in community development projects. f) Responsibility towards competitors The business firm should always maintain the highest ethical standards and maintain cordial relations with each of the competitors, which is critical and sensitive segment. g) Responsibility towards general public Business units have tremendous responsibility towards the general public to support the cause of community development. Most of the companies maintain public relations departments exclusively to maintain good relations with the community. Responsibility for the Upliftment of the Society As a part of its commitment to the upliftment of the society, the corporate houses voluntarily evince a sense of social responsibility. Many companies have the conviction that they owe their growth to the society. Hence, they believe that a part of the profits generated in the course of their business should be committed in a philanthropic manner towards the development needs of the society. This may be for economic, social, cultural or community development. Commitment to social responsibility enhances the visibility of the corporate houses in the minds of their target customer segments, and hence acts as a strategy to build up corporate image. More often, the corporate perfectly calculate the costs and rewards associated with such projects.

Role of entrepreneurship in the economic development of a country: Entrepreneurship plays a vital role in the economic development of a country or of regions within the country. It acts as a critical factor for accelerating economic development of a country. Economic development is essentially a process to increase the real per capital income of a country over a period of time. Entrepreneurs serve as the catalysts in the process of industrialization and

economic growth. He puts to use capital, labour and technology and acts as an economic agent. The entrepreneur has emerged as a kingpin of development. According to Joseph Schumpeter, the rate of economic progress of a nation depends upon its rate of innovation which in turn depends upon the distribution of entrepreneurial talent in the population. Technical progress alone cannot lead to economic development, unless technological break - through are put to economic use by entrepreneurs. It is the entrepreneur who organizes and puts to use capital, labour and technology. According to Meir and Baldwin, development does not occur spontaneously as a natural consequence when economic conditions in some sense are right. A catalyst is needed and this requires entrepreneurial activity to a considerable extent , the diversity of activities that characterizes rich countries can be attributed to the supply of entrepreneurs. Thus entrepreneurs are the key to the creation of new enterprises. They are recharged as the nation builders and wealth creators. They are the change agents who initiate economic activity to create wealth. They play a vital role for the economic development of a country in the following ways. 1.Capital formation: Capital formation is the most crucial element for each economic growth. Entrepreneurs mobilize the idle savings of the public through the issues of industrial securities. Investment of public savings in industry results in productive utilization of national resources. Rate of capital formation increase which is essential for rapid economic growth. Thus, an entrepreneur is the creator of wealth. 2.Improvement in per-capita income: Entrepreneurs have the skills of locating and indentifying the opportunities to establish their own enterprises. They possess the capacities to convert the latent and idle resources like land, labour and capital into national income and wealth in the form of goods and services. They help to increase net

national product and per-capita income in the country, which are important yardsticks for measuring economic growth. 3.Generation of employment: Entrepreneurs help in generating employment opportunities both directly and indirectly. Entrepreneur becomes self-employed and becomes selfsufficient and lead a honorable life. They donot depend on the government jobs or private jobs and directly employ themselves by starting their own enterprise. Indirectly, they also provide the jobs to many unemployed by setting up large and small scale business units 4.Balanced regional development: Entrepreneurs in the public and private sectors help to remove regional disparities in economic development. They setup industries in backward areas to avail of the various concessions and subsidies offered by the central and state governments. Public sector steel plants and private sector industries by Modis, Birla, Tata's and others have put the hitherto unknown places on the international map. Thus, the central and state governments offer of concessions and subsidies to the entrepreneurs results in balanced regional development. 5.Improvement in living standards: Entrepreneurs establish different types of enterprises so as to improve the standard of living of the masses. Entrepreneurs setup industries which remove scarcity of essential commodities and introduce new products. Production of goods on mass scale and manufacture of handicrafts, etc., in the small scale sector help to improve the standard of life of a common man. These offer goods at lower costs and increase variety in consumption. 6.Economic independence: Entrepreneurship is essential for national self-reliance. Industrialists help to manufacture indigenous substitutes of hitherto imported products there by reducing dependence of foreign countries. Businessmen also export goods and services on a large-scale and there by earn the scarce foreign exchange for the

country. Such import substitution and export promotion help to ensure the economic independence of the country without which political independence has little meaning. Hence, entrepreneurs act as the agents of economic growth. 7.Improvement in physical quality of life: Entrepreneurs supplement the economic growth in enhancing the physical quality of life. This implies that increase in life expectancy and increase in literacy. Establishment of enterprise leads to increase in employment avenues both directly and indirectly. Consequently, poverty is alleviated and per capita income grows. This results in improving the physical quality of life which is an indicator of economic growth. 8.Backword and forward linkages: Always the entrepreneur initiates change and tries to maximize his profits by innovations. Setting up of an enterprise in accordance with the changing technology, has several backward and forward linkages. Establishment of a giant unit generates several ancillary industries on one hand , and several other industries which grow by utilizing the raw-materials and by products produced by the mother plant on the other. In this way, entrepreneurs supplement the economic growth. 9.Growth of infrastructural facilities: Entrepreneurs play a major role in the growth of infrastructural facilities such as roads, bridges, buildings, factories, etc., which are the cornerstones of economic growth. Establishment of factories and industries in a particular locality pre-supposes the growth of infrastructural facilities. 10.Dispersal of economic power: The modern world is dominated by economic power. Economic power is the natural outcome of industrial and business activity. Industrial development normally can lead to concentration of economic power in few hands. This concentration of power in few hands. This concentration of power in few hands has its own evils in the form of monopolies. The increasing number of

entrepreneurs help in dispersal of economic power into the hands of many efficient managers of new enterprises. Scope Of Entrepreneurship Entrepreneurship and the economic development compliment each other. An economic system of country determines the nature and scope of entrepreneurship. Entrepreneurship can bring about drastic changes in the very structure of the economy. Entrepreneurship works in different ways in different economic systems such as capitalism, socialism and mixed economy. 1. Capitalism: A capitalist economy represents free enterprise, means freedom to save and invest, free competition, consumer sovereignty and very less interference from the government. Price of the product will be determined on the basis of the force of demand and supply with reference to cost of production The entrepreneur controls all the activities with reference to the process of production and distribution. Entrepreneurs play vital and prominent role in the enterprise because he controls domestic market by assuming the role of a competitor. 2. Socialism: Private entrepreneurship is absent in a socialist economic system. Economic and financial experts play important role in the development of entrepreneurship in the system. Such entrepreneurship is there mainly to serve the society not to mint money or to make profit only. Central authority in the socialism economy is appointed by the government to make policies, frame plans and procedures for the proper and efficient mobilization of resources, and mobilization and allocation of resources

into those industries of national prominence. In this system of economy private entrepreneur has neither a role nor responsibility. 3. Mixed Economy: The mixed economy is characterized by coexistence of both the private and public sectors in the same line of production. Consumer goods are left to the private enterprises. Government undertakes the production of capital goods.