Explain the kinds of social responsibility

Social responsibility of business can be classified into the following four categories :

  1. Economic responsibility : Basically, a business enterprise is an economic institution. Therefore, its primary responsibility is to produce the goods and services according to the demands of the society and to earn profit.
  2. Legal responsibility : The responsibility of every business is to carry out business activities within the laws of the country. Since these laws are meant for the good of the society, a law abiding enterprise is a socially responsible enterprise as well.
  3. Ethical responsibility: This refers to the behaviour of the firm expected by the society but not defined by law. For example, respecting the dignity of employees etc.
  4. Discretionary responsibility: These obligations are assumed by the enterprises voluntarily. For example: Donation to charitable institutions, helping the affected people during floods, earthquakes, etc. The management of the company is responsible to safeguard the capital investment by avoiding speculative activities and investing the money in healthy business ventures to get good returns.
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