Role of Management in Society

  • Post last modified:30 July 2023
  • Reading time:11 mins read
  • Post category:Management
Coursera 7-Day Trail offer

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.

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

Social Responsibility of a Business

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.

Management Approaches towards Society

Management Approaches towards Society

Social Responsibility Towards Different Interest Groups

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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
Article Source
  • Albers, H. (1969). Principles of management (1st ed.). New York [u.a.]: Wiley.

  • Geisler, E., & Wickramasinghe, N. (2009). Principles of knowledge management (1st ed.). Armonk, N.Y.: M.E. Sharpe.

Business Ethics

(Click on Topic to Read)

Corporate social responsibility (CSR)

Lean Six Sigma

Research Methodology


Operations Research

Operation Management

Service Operations Management

Procurement Management

Strategic Management

Supply Chain

Leave a Reply