Social Responsibility On the basis of the above arguments for and against social responsibility, one may wonder what the businessmen do in reality. Do they concentrate on profit maximisation? Or, do they support social goals? The fact is that one of the most important recent changes in the attitude of business people has been the realisation that they have social obligations to fulfill besides ensuring their own existence through profitable activity.
Of course, part of this realisation is not genuine and takes the form of lip service, which is thought necessary to ensure the survival of private enterprise. But at the same time it cannot be denied that private business does partly realise and recognise the hard reality that a privately owned firm has to meet the challenge of a democratic society, where all people have certain human rights and therefore, can demand responsible conduct from business. Unless the business sets its house in order, changes its outlook and is prepared to play its legitimate role as an organ of society, it has little chance of success. It will be useful here to go into some of the reasons and factors, which have forced and persuaded businessmen to consider their responsibilities and the conditions which were favourable to the development of business concern with social responsibility.
Some of the more important among them are: (i) Threat of public regulation: Democratically elected governments of today are expected to act as welfare states whereby they have to take care of all sections of society. Thus, where business institutions operate in a socially irresponsible manner, action is taken to regulate them for safeguarding people’s interest. This threat of public regulation is one important reason due to which business enterprise feels concerned with social responsibility. (ii) Pressure of labour movement: Over the last century or so, labour has become far more educated and organised.
Accordingly, labour movement for extracting gains for the working class throughout the world has become very powerful. This has forced business enterprises to pay due regard to the welfare of workers instead of following a policy of ‘hire and