According to the classical view, if a business was striving to utilise as efficiently as possible the resources at its disposal in producing the requisite goods and services, it was acting in a socially responsible manner.
But the modern concept of social responsibility has enlarged itself very much, though no consensus is available as regards its definition or the extent of its scope.
According to K.R. Andrews, social responsibility may be taken to mean intelligent and objective concern for the welfare of the society that restrains individual and corporate behaviour from ultimately destructive activities.
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According to H.R. Bowen, a businessman has an obligation to pursue those policies, to make those decisions or to follow those lines of action which are desirable in terms of the objectives and values of our society.
Therefore business must recognise and understand the aspirations of the society and determine to contribute to its achievement. According to Keith Davis, social responsibility begins where the law ends.
A firm is not being socially responsible if it merely complies with the minimum requirements of law, because this is what any good citizen would do. Social responsibility goes one step further. It is a firm’s acceptance of a social obligation beyond the requirements of law.
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Social responsibility means that organisations have significant influence on the social system and that this influence must be properly considered and balanced in all organisational actions. It simply means that business organisations must function as part of a larger social system because they are, in fact, a part of that system.
The social responsibilities may be internal or external to a business organisation. Internal obligations are concerned with assuring due process of justice, equity and morality in employees’ hiring and firing or their promotion or training.
They may also relate to such things as increasing employees’ productivity, or improving work environment. External obligations refer to such actions as fair deal to minority shareholders, earning foreign exchange or training or hiring hard-core un-employed etc.