Limits to Social Responsibilities

Managers must clearly recognise and understand the inevitable constraints on the acceptance of social responsibility. These constraints are as follows :

(i) While assuming social responsibility, a business enterprise must ensure its profitability and viability. A losing or a non-viable enterprise cannot discharge its social responsibilities successful. Socially responsible behavior should not endanger the economic survival. This does not imply that the enterprise should be allowed to earn profits at the cost of the society. A proper balance should be maintained between social responsibility and economic viability.

(ii) In the pursuit of social responsibilities, management should confine itself to the areas of its competence. If managers try to deal with social action programmes in which they lack competence, serious damage may be caused to their organisations.

(iii) Socially responsible behavior should be confined to the areas in which management has legitimate authority. Otherwise, social action may result in usurpation of authority. Indiscriminate social responsibility may amount to undue corporate authority unacceptable to society. Business management should not encroach upon the authority of Government and other social institutions.

(iv) Social responsibility should be balanced with the socio-economic power of business. A large enterprise or an enterprise supplying drugs, for example, has a greater responsibility than a small enterprise or an enterprise supplying ball pens.

(v)  The concept of social of responsibility is reciprocal. Just as business owes responsibility to various interest groups, these groups owe responsibility to support and assist business.

(vi) Before undertaking any social action programme, management should conduct a social cost-benefit analysis. There is no use carrying out programmes whose social costs social benefits.