Question

How do you classify Social Responsibility?

Answer 1

The social responsibility of business can be broadly divided into four categories. They are as follows:

Economic responsibility:
Businesses are meant to be economic units. A business enterprise is basically an economic entity and, therefore, its primary social responsibility is economic. Economic activities include the activity of production of goods and services that society wants and sell at a profit.

Legal Responsibility:
Every business has a responsibility to operate within the laws of the land. Since these laws are meant for the good of society, a law-abiding enterprise is a socially responsible enterprise as well.

Ethical Responsibility:
This includes the behaviour of the firm that is expected by society but not categorized in law. For example, respecting the religious sentiments and dignity of people while advertising for a product. There is an element of voluntary action in performing this responsibility.

Discretionary Responsibility:
This refers to the purely voluntary obligation that an enterprise assumes, for instance, providing charitable contributions to educational institutions or helping the affected people during floods or earthquakes. It is the responsibility of the company management to safeguard the capital investment by avoiding speculative activity and undertaking only healthy business ventures which give good returns on investment.