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Sunday, 28 May 2017

Responsibilities of a business towards Investors, Government and Consumers

As already mentioned in the previous post, every business has certain responsibilities towards all the stakeholders. Given below are the responsibilities of a business towards the investors,

Responsibility towards Investors: 

Return on Investments–
  • Investors take the risk and invest money in the business to earn good returns (interest)
  • Hence it is important that they get fair returns/Income on their Investments

Transparency–
  • It is important that the business is transparent in dealing with investors.
  • The business should pass on all the necessary information to the investors
  • This helps business to win the trust of the investors

Grievances Management–
  • Every company must have proper grievances handling mechanisms in place for the investors
  • The concerns of investors (if any) should be heard and efforts must be made to solve them quickly
Proper Disclosure of information–
  • The business needs to send regular reports and statement of profits to the investors
  • The company needs to give a true picture of its financial performance.

Proper Conduct of the meetings–
  • Regular meeting with investors should be held to update them about the  performance of the company
  • Notices of such meetings should be sent to all the investors in time

Maintain Goodwill and Solvency–
  • It is important that the business maintains a good image of the company.
  • The investments of the investors should be used very carefully and it must be ensured that the business maintains its solvency

Responsibility towards Government:

Payment of Taxes–

  • The business should make payment of all the taxes in a timely manner
  • The business should not indulge in evasion of tax as tax helps government to provide better facilities in the country

Follow Laws–
  • The business should follow all the rules and regulations laid down by the government
  • The business should be conducted in a lawful manner

Political Stability–
  • The business must assist the government in maintaining political stability
  • The economic growth of the country requires political stability
  • The business should not support anyone who is creating a political disturbance

Earning Foreign Exchange–
  • The business should try to earn foreign exchange by exporting their goods to foreign countries.
  • All the rules and regulations with respect to export, import, and foreign exchange must be strictly followed.

Support Socioeconomic Programs-
  • The business should support the government in the implementation of programs designed to increase literacy, the creation of jobs etc.
  • The support can be financial or non-financial. Nonfinancial support includes supporting the government by giving expert guidance, latest technical know-how etc.

Miscellaneous–
  • Help government in case of natural calamities
  • Help government by providing expert advice for framing rules and regulations.
  • Should not try to gain unfair advantage by bribing any government officials

Responsibility towards Consumers: 

Quality Products–

  • A Business Enterprise should always provide good quality products and services.
  • The goods should match the quality standards laid down by the government

Consumer Safety–
  • The products of the company must be safe to use
  • Unsafe goods should not be sold in the market 

Reasonable Price–
  • Every company should sell its goods at a fair price
  • Maximum Retail Price (MRP) should be mentioned on all the products

Complete Information–
  • Every company should ensure that accurate information is provided on the packaging of all the products.
  • Such information includes instructions for usage, its ingredients, date of manufacturing etc.

Advertising Ethics–
  • A company should not make any false claims/promises in the advertisements
  • Advertisements should not be misleading or vulgar

Hear Complaints–
  • Every company should pay proper attention to complaints/grievances of the consumers
  • The company should make sure that all the complaints are resolved satisfactorily

Miscellaneous–
  • Every company should provide good after sales services.
  • No company should indulge in acts like creating artificial scarcity of the goods in the market to exploit the consumers

Saturday, 6 May 2017

Responsibilities of a business towards Owners and Employees

Social Responsibilities of Business-

A business comes into existence and grows with the support of society. Being a part of society, every business has certain responsibilities towards all the stakeholders.

Owners are one of the stakeholders and hence the business responsibilities towards owners have been listed below-
Responsibility towards owners:
1. Reasonable Profit-  Owners/Shareholders invest money to earn profits. Hence every business has responsibility to earn a reasonable amount of profit for the owners
2. Finding New Business Opportunities-  Every company should keep on finding new business opportunities.  If it finds any good business opportunity, it should try to make use of that opportunity.
3. Expansion and diversification-  Every company should keep growing its business through expansion or by diversification to new business opportunities.
4. Best Utilization of Capital-  Every company should ensure that capital of the business is utilized in the best possible manner to generate maximum profit. The company has to ensure the safety of capital invested by the owners
5. Regular updates-  It’s the responsibility of every company to give periodic information to the owners about the business. The information provided should be accurate and complete in all respects.
6. Fair Practices on stock exchanges-  Any company should not involve itself in any unfair practices related to stock exchange like providing misleading information to the stock exchanges or trying to make profits from secret information about the business.
7. Minimizing wastages-  Every company should make optimum utilization of all the available resources and should minimize wastages.  Minimizing wastages lead to better productivity
8. Creating Goodwill-  Every company is responsible for creating a very good image of the company by providing high-quality products and services to all the customers


Employees are also one of the stakeholders and hence the business responsibilities towards employees have been listed below-
Responsibility towards employees:
1. Job Security– It's important for the business to provide employees with a sense of job security. This will give them peace of mind and allow them to concentrate better on work. It will also increase their motivation: 2. Good working conditions– Every company should provide good working conditions for the employees. The office/factory premises should have proper illumination, facility of drinking water, proper ventilation etc. . 3. Fair Remuneration– Every company should provide a fair remuneration to its employees like reasonable salaries, bonuses, incentives etc. The company should provide regular increments The employees should not feel that they are being exploited
4. Trainings– The employees should be provided training from time to time. This will help to enhance the skills of the employees and would lead to better productivity
5. Safety Measures– All health and safety measures must be in place for employees. Offices/Factories/Warehouses should have proper sanitation. Safety Equipments like helmets, gloves, etc. must be provided wherever it's necessary.
6. Career Growth– It's important that the business provides growth opportunities to the employees Performance appraisals must be done from time to time. Promotion should be given to all the deserving employees.
7. Participation in Management- It's important that employees’ views and opinions are taken while making important decisions This will give them a sense of belongingness towards the organization
8. Grievances Management- Every company must have proper grievances handling mechanisms in place The problems of the employees should be heard and efforts must be made to solve them quickly. The business must recognize the right of workers to join trade unions