Obligations of business towards different groups

Why a business owes obligations

A business does not exist in isolation. It uses capital from owners, the work of employees, goods from suppliers, infrastructure provided by the government and the natural resources of the community, and it depends on customers for its revenue. Each of these groups: its stakeholders: has a legitimate interest in how the business behaves. Social responsibility means that a business meets its obligations to all of them, not only to its owners. The groups and the obligations towards each are as follows.

Employees

• Pay fair wages and benefits, on time.
• Provide safe and healthy working conditions.
• Offer training, recognition and opportunities for promotion.
• Treat all employees with dignity and without discrimination, and respect their right to form unions and voice grievances.
• Involve them, where possible, in decisions that affect them.

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Suppliers and creditors

• Pay dues on time and honour contracts.
• Deal fairly in prices and terms, and build long-term relationships.
• Keep commitments on interest and repayments to lenders.

Competitors

• Compete fairly on quality, price and service rather than through false claims, price wars meant to drive rivals out, or cartels.
• Respect rivals' trademarks, designs and trade secrets.

Consumers

• Sell what is promised: goods that work, in the full quantity, at a fair price.
• Keep products safe to use, and stand behind them after the sale.
• Tell the truth in advertising and on the label.
• Treat a complaint as a chance to put things right; never hoard, adulterate or sell on the black market.

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Community and environment

• Prevent pollution of air, water and land, and use natural resources carefully.
• Create employment and support local development, education and health.
• Respect local culture and help in times of disaster.

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Owners and investors

• Earn a fair and steady return on their capital and protect its value.
• Use their funds efficiently and honestly, without waste or misuse.
• Give them true, timely information about performance through proper accounts and disclosures.
• Run the business in a way that ensures its long-term growth and survival.

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Government

• Obey the law and pay taxes honestly and on time.
• Support national policies and avoid corrupt practices.
• Help in the government's development goals, such as employment and balanced regional growth.

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Example. A cement plant that pays its workers fairly, sells to dealers at transparent prices, pays its taxes, filters its dust emissions and runs a school for nearby villages is meeting its obligations to all these groups, not only to its shareholders.

Conclusion

A business that meets its obligations to every group earns their trust, which in turn supports its own long-term success. Neglecting any group, exploiting workers, misleading customers or harming the environment, invites protest, regulation and loss of reputation.