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What do you understand by social responsibility of business? How is it different from legal responsibility?

Answer:

Ans.     Social responsibility of business refers to its obligation to take those decisions and perform those actions which are desirable in terms of the objective and values of our society. It refers to the obligation of business towards various social groups like employees, consumers, investors, government etc. In the words of H. R. Bowen,

"Social responsibility of business is 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."

Legal responsibility is the responsibility that a business has by virtue of law.

Differences between Social and Legal Responsibility.

1. Legal responsibility is compulsory under any of the laws, acts and constitution. Social responsibility is not backed by legal provisions.

2. Legal responsibility is compulsion while social responsibility is a choice.

3. Many a time, legal responsibility is fulfilled in the name of social responsibility.

There are no punishments for organizations not following their social responsibility but legal action can be taken against organizations not following their legal responsibility.