Responsibility of a Business Enterprise

A business enterprise is a part of a larger economic system.  Other groups and individuals affect the way business is managed.  They are the owners of the business, employees working for the enterprise, customers buying the goods and services selling machinery, equipment, or materials to the enterprise.  The business company must also follow all government rules and regulations, besides being a responsible corporate citizen in the community, and abide by decisions of business associations of which it is a member.  If the employees are unionized, the business company must recognize the union and negotiate with it.

A manager is employed to do a job and is directly responsible to the board of directors elected by the share holders, who own the company.  In a sole proprietorship or  a partnership, the manager is responsible to the proprietor or the partner.  If the manager does a good job, he will continue to be employed.  If his performance falls below exception, he will be replaced.  The manager employs workers to help run the business.  In return, he must pay fair wages and benefits, provide a safe and healthy working environment, and treat them well.  Otherwise, the workers will resign and look for better jobs elsewhere.

The manager is responsible to his customers in providing goods and services of satisfactory quality at competitive prices.  If his prices are too high, customers will buy from other shops.  More importantly, his goods must be genuine.

The businessman or manager must also deal with his supplier fairly and pay duly for his purchase.  If he defaults, he will not get reliable suppliers.  Suppliers themselves are businessmen and are unwilling to do business with those who cannot pay.

In conducting his business transactions, a manager must comply with the laws and regulations laid down by the government.  Some activities like gambling, may be prohibited even though they may be profitable for the businessman.

The responsibility of a business to the community is a general one.  The business should strive to promote the social, economic and cultural welfare of the community.  Many companies donate funds to support neighborhood activities.  Others encourage their employees to participate in social work or cultural programs that benefit society.

If workers in a business enterprise are members of a labor union, the employer must recognize such representation and negotiation with the union leaders to reach a collective agreement.

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Category: Management