15 Importance of Social Responsibilities of Entrepreneurs

The concept of social responsibilities of the entrepreneur in the present day business activities is gradually getting prevalent. That is why this concept is going to be known as an integral part of the modern system. why it is so?

Importance of Social Responsibilities of Entrepreneurs
Importance of Social Responsibilities of Entrepreneurs

As regards assuming the social responsibilities of the big entrepreneur, it is relevant to clarify that the first motive of the entrepreneurs or businessman is to earn profits.

The second objective is social service. For fulfillment of these objects, the business organization regularly produce and provide various commodities and services.

Entrepreneurship is an organization which is organized and operated for providing commodities services to the society, by the inspiration of profits.

Entrepreneurs interest in profits may not be more than that of having bet in the race, that of the scoring runs in cricket and then that of consuming food to survive.

Importance of Social Responsibilities of Entrepreneurs

The arguments in favor of Social Responsibilities of Entrepreneurs or Importance of Social Responsibilities of Entrepreneurs are as follows:

1. Success in Competition

Today is the age of competitions. Various entrepreneurs are engaged in the production and distribution of some type of commodities and services.

In such conditions, the quality and price of the commodity alone are not important, rather the trust of every person associated with the business and every section is to be cared for.

Thus, the entrepreneur should fulfill social responsibilities.

Related: 15 Characteristics of Social Responsibilities of Entrepreneurs.

2. Constitutional Provisions

Today the elements of economic and social justice and directive principles are incorporated in the constitutional provisions of almost all the countries.

These provisions substantiate the concept of social responsibilities and force the entrepreneurs to fulfill them.

3. Government Policies

The government policies, such as industrial policy, license policy, Export-Import policy, etc.

Also force the entrepreneurs to fulfill their responsibilities in various areas, failing which the government may acquire the management and control of the Enterprises and may itself fulfill responsibilities towards the public.

Bonus: 10 Social Responsibility of Entrepreneur Towards Business.

4. Statutory Provisions

The government has made various statutory provisions to regulate business activities and these provisions are also revised from time to time.

According to the requirements. These provisions laid down significant importance of the concept of social responsibilities.

Also, the factory owners make suitable arrangements for their security and health and also for the transportation of these workers from residence to the factory and vice versa.

5. Development of New Social Consciousness

In the modern age, new social consciousness is taking place among all sections of society.

The consumers, staff and government, all wish that the entrepreneurs should fulfill their social obligations.

Spread of education, competitive advertisements, and means of Communications, like television, newspapers, radio etc. have immensely contributed towards the development of this consciousness.

Related: 10 Social Responsibility of Entrepreneur Towards Owner.

6. Democratic Management

Since the present age is of Democratic management, the concept of associating the workers in management and profits have started being executed.

Entrepreneurs and society spend a substantial amount of meeting social responsibilities.

7. Professional Management

Modern business organizations, particularly the companies and corporations are operated and managed by the professional managers, who are aware of the importance of the concept of social responsibilities and wants to operate the business organization.

Need of social responsibility of entrepreneurship
Need of social responsibility of entrepreneurship

The position of leadership in the society has become available to the managers, by which demand for social responsibility generated.

8. Increase in Business Power

The size of the modern business has substantially increased.

The Assets of multinational companies exceed the national income of most of the countries.

Therefore, economic and business power may overpower social and political power.

Related: 26 Challenges in Way of Social Responsibilities of Entrepreneurs.

Hence, the concept of social responsibility alone may properly guide business power.

9. Consumer Movement

Now, consumer movement has started forming organizations and associations to protect their interest and to keep watch on business activities.

They educate consumers regarding various commodities and services.

By Spread of consumer movement, the entrepreneurs have to fulfill their social responsibilities.

10. Protection to Existence

If an entrepreneur intends to keep his business activities in existence for long, he will have to fulfill social responsibilities for various sections of the society.

So, for modern entrepreneurs, the question of fulfilling the social responsibilities has become the question of their life and death and they will have to fulfill these responsibilities.

Bonus: 15 Suggestions for Entrepreneurs to Alert about their Responsibilities.

11. Increase in Profits

One important argument in favor of assuming social responsibilities towards various sections by the entrepreneurs, is additions in their own profits, by assuming these responsibilities.

By doing so, their credit in the society is increased manifold and as a result, the sale of their products and services get increased and gradually their profits also go on increasing.

12. Expansion and Development of Business

Today’s entrepreneur does not contend only when with the existing business activities if he desires to rapidly expand and Develop his business in a long time.

It is essential that he fulfills his social responsibilities.

Related: Social Responsibility of Entrepreneurs towards Government & Institutions.

13. Increase in Labour Power

The power of labour unions has compelled the entrepreneur to fulfill social responsibilities.

Besides, this concept inspires the labour organizations also to work for in social interest, so that the workers may develop a sense of responsibility towards labour organizations.

14. Improving Interdependence

The entrepreneur is an important part of the social system.

The interdependence of society and business is increasing, with Rising in standards of living of the society.

The products produced by Business organizations are being used now even in small villages.

Related: 8 Role of Entrepreneurs in Balanced Regional Development of Industries.

So, the execution of the concept of social responsibilities will improve this interdependence and no section will be exploited.

15. To Provide Maximum Satisfaction

Today’s entrepreneurs have overcome the tendencies to exploit and are now giving emphasis on maximum satisfaction to all groups.

His business activities will become everlasting only by doing so. He is giving emphasis on assuming the social responsibilities to maximize satisfaction on the quality of life.

Arguments Against Assuming Social Responsibilities by Entrepreneurs

1. Fewer Profits of Business

The persons are the concept of against social responsibilities by the entrepreneurs.

They argue that for assuming social responsibilities for various sections by the entrepreneur will involve spending of money, which will reduce his profits.

So, they think, that cost incurred on assuming social responsibilities reduces the profits of the business.

Bonus: 14 Social Responsibility of Entrepreneurs towards Customers.

2. Challenges in Capital Formation

The opponents of the concept also feel that this concept is a challenge in capital formation because, by its execution, the operating costs of the business increase and profits get reduced and hence the capital formation will not be substantial.

Besides, the investors will also not get encouraged for making investments, since the shareholders and investors will gain low dividend, by execution of the concept of social responsibility. Top 10 Social Responsibilities of Entrepreneurs in INDIA.

3. End of Possibilities of Development and Expansion of Business

This concept reduces the profits of the business, on the one side, and on another side, increases the operational cost also.

As a result, required, required capital formation is not possible.

Development and expansion of the business are not possible without resources.

Related: 20 Types of Entrepreneurship (Explained).

4. Dilution in the Reputation of Business

This concept reduces profits and hence the creditors and suppliers feel hesitation in providing loan and supplying the commodities.

As a result, the reputation of the business also gets reduced.

5. Increase in Financial Load to Institution

The concept of social responsibilities of the entrepreneurs increases the financial Load of the Institution.

When economic and non-economic facilities are provided to the workers, they are insured in sensual waste and also benefited by various welfare programmes, the financial load will certainly increase.

Besides, taxes will also have to be paid to the government.

All these will reduce the savings also and it will further increase financial load and it will become very difficult to manage the finances.

Thus, Now you all know the Need and Importance of Social Responsibilities of Entrepreneurs.

Read More

Scroll to Top