There is an impression that profit motive and social responsibility are inherently contradictory to each other. This is far from being true. Economic goals and social responsibilities of business are complementary to each other and reinforce each other. Business firms are primarily economic institutions and if they fail to earn profits, they will not survive for long, Successful economic activity is thus a firm’s social relevance. Profit, the main economic goal, serves as a stimulant to hard work, initiative and risk-taking. It is an overall measure of the social contribution of business through its economic performance. An enterprise that earns economic surplus improves its capability to serve the society. Thus, profit contributes to public interest and social welfare.
Similarly, social responsibilities of business contribute to the economic viability and performance of business enterprises. In the short run, expenditure on social action programmes may reduce the amount of profit. But in the long run such expenditure improves the socio-economic environment of business. For instance, when a business enterprise contributes to the education and health of the community. It can get more competent and healthy employees. Similarly, by contribution to the well-being of people, a business enterprise can enlarge the market for its products and services. Thus, there is no inherent conflict between profit motive and social responsibility of business.