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Executive Summary

The role of business has been changing over the centuries. Throughout the existence of shareholding organisations, there have been different theories regarding the role of business. Organisations too have been changing their role to adapt to resource, capital and societal pressures. From an initial thrust on operational efficiency, organisations had over time started increasing their focus on marketing and sales.
Since the late 20th century, we see an increasing focus on the CSR initiatives as well as on public relations. Is this only a newfound mantra or is it a strategic initiative of organisations? From a brief description on existing theories of role of the organisations, the paper tries to answer some of the questions about the role of organisations. The paper also explores possible mechanisms of institutionalizing corporate behaviour and converting responsible behaviour into a strategic intent.

Introduction

Gandhiji was way ahead of his times in several respects. His views of the ownership of capital was one of trusteeship, motivated by the belief that essentially society was providing capitalists with an opportunity to manage resources that should really be seen as a form of trusteeship on behalf of society in general. We today realize that perhaps we have come a full circle in emphasizing this concept by adopting a new set of ethics of corporate decision-making, which clearly constructs and upholds a company's social responsibility, arises from the fact that a business enterprise derives several benefits from society, which must, therefore, require the enterprise to provide returns to society as well. However, the role of business in society has been debated in economic literature for a long time. This paper attempts to discuss the various theories on the role of business and the problems related to each. We would then discuss the stakeholder's view and its importance and also explore possible mechanisms of institutionalizing corporate behaviour and converting responsible behaviour into a strategic intent.

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* Contributed by: -
Saurabh Goswami & Malini Pande,
II Year Students,
IIM Kozhikode.