do firms have any responsibilities to society at large

Expert Solution

Yes, definitely firms do have a lot of responsibilities to the society. I would say that even small companies also have responsibilities to the society (even though only large companies are bound to do corporate social responsibility as per law). All industries/companies are inter-linked and action of any of them does have a ripple effect on the other. Hence, every company, irrespective of size is responsible to the society in some way or the other.

All companies are there to make profit and give something to society in return of money. Firms operations are not happening inside a vacuum rather is an open system which interacts with the environment.

Some of the responsibilities of each firm are as follows:

- Treat all employees fairly

- Offer products to society which are safe

- Offer quality products to the society

- Fulfill the needs of the society by giving appropriate service/product

- Use resources efficiently

- Abide by the labor laws

- No biasing

- Respect the environment and natural resources.

- Works for sustainable development where future resources are secured

- Minimum or no waste

- Donations to the needful

All these things does impact the image of the company and hence the stock price. If society thinks that the company is not responsible for the society then there is bad impact on the image of teh company which may lead to its downfall.

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