Scope of social responsibility of business

Earlier, we discussed the introduction of the social responsibility of business. In this starting article, we tried to grasp the basic understanding of its concept. Now as a continuation to this series let's discuss further.

The scope of social responsibility of business mainly covers its obligations or duties towards four social groups.

Social responsibility of business

The social responsibility of business means various obligations or responsibilities or duties that a business-organization has towards the society within which it exists and operates from.

Generally, the social responsibility of business comprises of certain duties towards entities, which are depicted and listed below.

1. Shareholders or investors who contribute funds for business.
2. Employees and others that make up its personnel.
3. Consumers or customers who consumes and/or uses its outputs (products and/or services).
4. Government and local administrative bodies that regulate its commercial activities in their jurisdictions.
5. Members of a local community who are either directly or indirectly influenced by its activities in their area.
6. Surrounding environment of a location from it operates.
7. The general public that makes up a big part of society.

Factors Responsible for Changing Concept of Business

Image below depicts factors responsible for changing concept of business.

Changing Concept of Business

Concept of business implies the intention of doing a business. In other words, it means the purpose for which a business is being carried on.

Since last few decades, there has been an impressive change in the concept of business. It has changed remarkably from its mere producer orientation (i.e. only profit earning attitude) to the customer orientation (i.e. giving customers maximum satisfaction). It further grew towards societal orientation (i.e. with focus on achieving welfare of the society), and now also includes the environmental orientation (i.e. now safety of environment is also a priority).

The changing concept of business over last few decades is depicted below.

Interdependence of Production and Marketing

The most crucial and fundamental function of business is to:

1. First produce/provide some goods and/or services, and then
2. Market and/or target the same to the potential buyers and/or consumers.

The basic functions of business namely, production and marketing go hand in hand with one another.

Stages in the evolution of business

Evolution of business means its origin, growth, and continuous development with expansion in various sectors, that contribute and run economies.

The business evolution went through many progressive stages or so called developmental steps. In each stage of progress, it evolved itself and got more mature than its previous state. It is evident that, at every step of evolution; it expanded its scale of operations and also widened its modes of communication. It is continuously evolving since then.

The five main stages in the evolution of a business are depicted below.

Image credits © Gaurav Akrani.

Functions of business

The following image depicts the core functions of the business.

Image credits © Gaurav Akrani.

Following three groups classifies the major functions of a typical business:

1. Internal functions are primary activities happening inside or within the premises of an organisation and lay down its main foundation or base.
2. External functions are mainly promotional activities performed out of the premises of a business institution.
3. Support functions are ancillary (assisting) activities that aid the functioning of internal and external activities of a business establishment.

How to Start a Business

Starting a business means setting up a new enterprise and initiate its promotion in the market. The setup and initiation of a company is a foundational work done by a Promoter or an Entrepreneur.

The entrepreneur has to take some crucial steps to start a business. Doing its promotion is not an easy task. One mistake can create many problems for newly founded business. Therefore, the skills and qualities of a promoter matter a lot.

Challenges Before Indian Entrepreneurs

The challenges which Indian entrepreneurs have to face are depicted below.

The Indian entrepreneurs have to face following challenges:

1. To understand, tackle and survive the era of globalization.
2. To take optimum advantage of business opportunities arose due to liberalization of Indian economy since 1991.
3. To replace outdated technology with improved modern technology.
4. To motivate and properly manage needs and expectations of women and young managers that make an Indian workforce.
5. To follow marketing techniques that are result and consumer-oriented.
6. To professionally manage the financial activities of the business.
7. To improve production process and produce high-quality goods.
8. To balance profit earning capacity and social-welfare activities.