Consider a scenario of an organization that is located in your neighborhood. You have faced quality issues with the organization’s products for the past few months. Would you prefer to continue with the organization’s products in such a case? What feedback would you give to others about the organization’s products? You would not have good feedback about the organization’s products.
Thus, an organization needs to manage its activities in a manner so that the interests of society are met. This would help the organization build its image among customers. In this section, let us study the role of management in society.
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Management is not only a representative of managers and employees but also has to fulfill certain objectives of the society. A society achieves the benefits of effective management in terms of industrial development, fairness to different social groups, the satisfaction of consumers, the welfare of people, and the proper discharge of social responsibilities. Apart from this, the following are some other objectives of a society that management has to meet:
- Providing good quality products at fair prices to consumers.
- Making timely payments of taxes to the government.
- Conserving the biological environment and natural resources.
- Dealing fairly with suppliers, dealers, competitors, and other third parties.
- Preserving the ethical values of a society.
Role of Management in Society
A business is an economic activity that is performed regularly to earn profits. However, many businessmen spend a huge amount on activities that may not create profits for them. These activities may include planting trees and developing gardens on streets, performing surveys to understand customer needs, providing housing, education, and health care services to employees, sponsoring sports events at national and international levels, etc.
Have you ever thought about why these businessmen do so? This is because businesses operate in a society and use the resources of the society for their functioning. Thus, businesses have certain responsibilities towards society.
Social responsibility, also called Corporate Social Responsibility (CSR), is an emerging concept that has now been adopted by most businesses across the world. It refers to the duties and obligations of an organization intended for the welfare of society. The activities of a business should not harm rather they protect the interests of the society.
For this, businesses need to take certain actions, which are:
- Aligning social goals with corporate goals.
- Presenting reports regarding the progress of the organization in the area of social responsibility.
- Judging social performance by applying various approaches.
- Calculating the cost of social programs against the return on the investment of those programs.
Organizations commonly follow three approaches to meet social responsibility.
The CSR practices of a business are generally focused on its stakeholders. A stakeholder is an individual that has an interest in a business. There can be internal or external stakeholders in a business. Internal stakeholders are individuals, who work inside the organization; for example, employees and the board of directors.
On the other hand, external stakeholders indirectly influence the organization. Examples include shareholders, social activists, and environmentalists.The success of a business largely depends on its stakeholders. Thus, it is of paramount importance for a business to address the grievances of its stakeholders.
Let us now discuss the social responsibility of a business towards different interest groups:
- Responsibility towards shareholders: Shareholders are the individuals who invest in a business by purchasing stock to earn profits in return. Without shareholders, it would be difficult for the business to generate adequate funds for carrying out operations. Thus, a business has various responsibilities toward its shareholders. Some of these responsibilities are:
- Informing shareholders about annual, general, and emergency meetings.
- Providing accurate financial information about the business to shareholders.
- Providing fair returns on the capital invested by shareholders.
- Informing shareholders about annual, general, and emergency meetings.
- Responsibility towards customers: Customers are the individuals who buy products or services of a business. A business cannot imagine its survival without a proper customer base. Therefore, it also has some responsibilities toward its customers, which are:
- Abiding by the rules and regulations under the Consumer Protection Act, of 1986.
- Providing high-quality products and services at reasonable prices to customers.
- Ensuring maximum satisfaction of customers by giving value for money.
- Restricting the selling of adulterated and low-quality products.
- Solving customer grievances by opening customer care centers.
- Abiding by the rules and regulations under the Consumer Protection Act, of 1986.
- Responsibility towards employees: Employees are individuals who render services to a business in exchange for a fixed amount of wages and salaries. They are the ones who produce goods and services for customers. Thus, a business needs to protect the interests of its employees by:
- Ensuring a healthy work working environment.
- Providing fair wages and bonuses to employees.
- Recognizing and rewarding employees according to their performance.
- Maintaining transparency in communication.
- Providing necessary training to employees so that they can better perform their jobs.
- Ensuring a healthy work working environment.
- Responsibility towards community and society: As discussed earlier, a business operates in a society and utilizes its resources. Therefore, it also has certain responsibilities toward society. Some of them are:
- Working for the growth and development of the society.
- Generating employment opportunities for people in society.
- Avoiding manufacturing processes that cause environmental pollution.
- Working for the growth and development of the society.
- Responsibility towards government: A business has to adhere to the rules and regulations set by the government. In case these rules are not followed, the business may have to shut down its operations. The responsibilities of an organization towards the government are as follows:
- Paying taxes on a regular basis.
- Abiding by the rules and regulations prepared by the government.
- Refraining from submitting misleading and false information or documents.
- Paying taxes on a regular basis.
- Responsibility towards other stakeholders: Other stakeholders of a business include suppliers, distributors, banks, and financial institutions. The responsibilities of an organization towards stakeholders are as follows:
- Ensuring timely payment to suppliers.
- Providing accurate and clear information about funds to banks.
- Providing fair margins to distributors.
- Providing correct and clear specifications to suppliers regarding raw materials.
- Ensuring timely payment to suppliers.
Business Ethics
(Click on Topic to Read)
- What is Ethics?
- What is Business Ethics?
- Values, Norms, Beliefs and Standards in Business Ethics
- Indian Ethos in Management
- Ethical Issues in Marketing
- Ethical Issues in HRM
- Ethical Issues in IT
- Ethical Issues in Production and Operations Management
- Ethical Issues in Finance and Accounting
- What is Corporate Governance?
- What is Ownership Concentration?
- What is Ownership Composition?
- Types of Companies in India
- Internal Corporate Governance
- External Corporate Governance
- Corporate Governance in India
- What is Enterprise Risk Management (ERM)?
- What is Assessment of Risk?
- What is Risk Register?
- Risk Management Committee
Corporate social responsibility (CSR)
Lean Six Sigma
- Project Decomposition in Six Sigma
- Critical to Quality (CTQ) Six Sigma
- Process Mapping Six Sigma
- Flowchart and SIPOC
- Gage Repeatability and Reproducibility
- Statistical Diagram
- Lean Techniques for Optimisation Flow
- Failure Modes and Effects Analysis (FMEA)
- What is Process Audits?
- Six Sigma Implementation at Ford
- IBM Uses Six Sigma to Drive Behaviour Change
Research Methodology
Management
Operations Research
Operation Management
- What is Strategy?
- What is Operations Strategy?
- Operations Competitive Dimensions
- Operations Strategy Formulation Process
- What is Strategic Fit?
- Strategic Design Process
- Focused Operations Strategy
- Corporate Level Strategy
- Expansion Strategies
- Stability Strategies
- Retrenchment Strategies
- Competitive Advantage
- Strategic Choice and Strategic Alternatives
- What is Production Process?
- What is Process Technology?
- What is Process Improvement?
- Strategic Capacity Management
- Production and Logistics Strategy
- Taxonomy of Supply Chain Strategies
- Factors Considered in Supply Chain Planning
- Operational and Strategic Issues in Global Logistics
- Logistics Outsourcing Strategy
- What is Supply Chain Mapping?
- Supply Chain Process Restructuring
- Points of Differentiation
- Re-engineering Improvement in SCM
- What is Supply Chain Drivers?
- Supply Chain Operations Reference (SCOR) Model
- Customer Service and Cost Trade Off
- Internal and External Performance Measures
- Linking Supply Chain and Business Performance
- Netflix’s Niche Focused Strategy
- Disney and Pixar Merger
- Process Planning at Mcdonald’s
Service Operations Management
Procurement Management
- What is Procurement Management?
- Procurement Negotiation
- Types of Requisition
- RFX in Procurement
- What is Purchasing Cycle?
- Vendor Managed Inventory
- Internal Conflict During Purchasing Operation
- Spend Analysis in Procurement
- Sourcing in Procurement
- Supplier Evaluation and Selection in Procurement
- Blacklisting of Suppliers in Procurement
- Total Cost of Ownership in Procurement
- Incoterms in Procurement
- Documents Used in International Procurement
- Transportation and Logistics Strategy
- What is Capital Equipment?
- Procurement Process of Capital Equipment
- Acquisition of Technology in Procurement
- What is E-Procurement?
- E-marketplace and Online Catalogues
- Fixed Price and Cost Reimbursement Contracts
- Contract Cancellation in Procurement
- Ethics in Procurement
- Legal Aspects of Procurement
- Global Sourcing in Procurement
- Intermediaries and Countertrade in Procurement
Strategic Management
- What is Strategic Management?
- What is Value Chain Analysis?
- Mission Statement
- Business Level Strategy
- What is SWOT Analysis?
- What is Competitive Advantage?
- What is Vision?
- What is Ansoff Matrix?
- Prahalad and Gary Hammel
- Strategic Management In Global Environment
- Competitor Analysis Framework
- Competitive Rivalry Analysis
- Competitive Dynamics
- What is Competitive Rivalry?
- Five Competitive Forces That Shape Strategy
- What is PESTLE Analysis?
- Fragmentation and Consolidation Of Industries
- What is Technology Life Cycle?
- What is Diversification Strategy?
- What is Corporate Restructuring Strategy?
- Resources and Capabilities of Organization
- Role of Leaders In Functional-Level Strategic Management
- Functional Structure In Functional Level Strategy Formulation
- Information And Control System
- What is Strategy Gap Analysis?
- Issues In Strategy Implementation
- Matrix Organizational Structure
- What is Strategic Management Process?
Supply Chain