Modern view of business advocates assumption of social responsibility by business. The arguments in favour of social obligation are discussed below:

(i)    Business belongs to Society. Business is a part of society. Therefore, businessmen must consider it to be their duty to satisfy the needs of society. Social improvements may be brought about by developing educational opportunities, pollution control, or upliftment of back ward people.

(ii)    Long-term Interest of Business. It is in the interest of business to fulfill the demands and aspirations of the society. The people who have good environment, education and opportunities make better employees, customers and neighbors for the business.

(iii)    Fear of Government Intervention or Regulation. In case the business fails to respond to social needs voluntarily, the government may force business to discharge social obligations through legislation. This will reduce the freedom and flexibility of business. Hence it is in the interest of business community to voluntarily fulfill its obligations to the society.

(iv)    Public Image. A business can develop credibility with public by responding to the society’s demands. Good public opinion is the precondition for the success of any business. Therefore, the businessmen must shown concern for social obligations.

(v)    Moral Justification. Every business uses capital and physical and human resources of the society for business purposes. It also depends on society for the disposal of goods and services. Further, business firms make use of various common facilities provided by society like roads, power and water supply. Therefore, it is the moral responsibility of business to contribute to the well-being of society.

(vi)    Consumers’ Consciousness. The consumers are well informed. They expect higher quality products at reasonable rates. If they do not get fair treatment from business, they will organize themselves and compel the business to assume its social responsibilities.

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