Q.What do you understand by social responsibility of business? How is it different from legal responsibility?

Social responsibility of business is its obligation to take decisions and perform actions that are desirable in terms of the objectives and values of society — not just chasing profit, but respecting society's aspirations while pursuing its own interests.

What social responsibility of business means

• It is the obligation of a business to take those decisions and perform those actions which are desirable in terms of the objectives and values of our society.
• When a business assumes social responsibility, it accepts that it must respect the aspirations of society and try its best to help achieve them alongside its own profit interests — not at their expense.
• This contrasts with the old view that a business exists only to maximise profits for its owners and that public good is irrelevant to it. The responsible view holds that a business, like any responsible member of society, must act with due concern for the effect of its actions on other people's lives.

How it differs from legal responsibility

• Legal responsibility is the duty to operate within the laws of the land. It is discharged by mere compliance with the law — doing only what the law requires and no more.
• Social responsibility goes further:
  • It is the firm's recognition of its social obligations even in areas the law does not cover, in addition to the obligations the law does impose.
  • It therefore carries an element of voluntary action — businesspeople acting for the benefit of society on their own initiative, not under legal compulsion.
• Illustration: simply obeying pollution laws is legal responsibility; going further to install extra pollution-control devices, sincerely attend to customer complaints or support the community, where no law forces it to, is social responsibility.