Explain the social responsibility of commercial organisation towards employee and shareholders?

        Explain the social responsibility of commercial organisation towards employee and  

Definition: -H.R.BOWEN defines “Social responsibility of business refers to the obligation of business to pursue those policies, to make those decisions, or to follow those lines of actions, which are desirable in terms of objectives and values of our society.”

Meaning: -The survival & success of a business depends upon the service of its efficient work force. Human resource or employees is one of the greatest resources of all the resources.

1.      Job security: -The Company should provide job security to its employees. The workers should not be kept temporarily for a long time. They must be given permanent jobs. Otherwise they may be frustrated.

2.      Monetary factors: - Workers should be paid adequate wages and other incentives like bonus, medical allowance, travelling allowance; etc Prompt payment often results in higher motivation to the workforce.

3.      Working conditions: - The workers should be provided with good working conditions. There should be adequate lighting and ventilation. Noise, dirt and dust pollution should be avoided.

4.      Health and Safety measures: - The Company should take adequate measures to protect health of the employees. They should be provided with canteen facilities, and medical facilities. Proper maintenance of machines and buildings must be done to prevent accidents.

5.      Proper personal policies: - There must be proper personal policies in respect of transfers, promotions, recruitment, training, etc. There should be no partiality in Promotions and transfers of employees.

6.      Workers Participation in Management: -The Workers must been couraged to take part in management. There are different ways of workers participation in management, such as quality circles, work committee, suggestions scheme, and co-partnership, etc.,

7.      Grievance Procedure: -There should be a proper Grievance Procedure to handle employees’ complaints. Any complaint of the employee must be immediately sorted by following suitable Grievance Procedure.


The shareholders are the owners of the company. They have invested their funds for higher returns. They expect certain responsibilities on the Part of the management.

1.      Fair return on investment: -The shareholders expect a fair return on their investment. After all they have invested their valuable resources.

2.      Expansion and Diversification: -The shareholders expect that the management should undertake expansion and diversifications programmes. This will result in more returns to the shareholders.

3.      Proper use of Shareholders Funds: -The shareholders expect optimum utilization of their funds. They will not tolerate the management, if it spends their funds in unproductive manner.

4.      Proper conduct of share holders meetings: -The shareholders want fair conduct of meeting. There should be fair conduct of meetings. There should be fair elections at company meetings.

5.      Proper Disclosure: -The management should make a proper disclosure regarding the affairs of the business. The accounts must be properly maintained and audited from time to time. The share holders should allowed getting the copies of the audited report sheets of the company.

6.      Good public image: -The shareholders expect that the management should develop and maintain a good public image. A company that enjoys name and goodwill commands a lot of respect and trust in the share market, labour market, consumer market, and so on.

7.      Periodic Information: -The Shareholders expect the company to inform them about important happenings in the company, either at company meetings or through correspondence. The shareholders have a right to be informed of the development in the company.
@ r ` sed for exploiting the consumers and companies in the host country. MNCs are financially very strong and adopt aggressive marketing strategies to sell their products, adopt all means to eliminate competition and create monopoly in the market.

6.      Investment: -MNCs prefer to invest in areas of low risk and high profitability. Issues like social welfare, national priority do not find any place on the agenda of MNCs.

7.      Artificial Demand: -MNCs are criticised on the ground that they create artificial and unwarranted demand by making extensive use of the advertising and sales promotion techniques.