The social responsibilities of an entrepreneur or organization institution may be spelled out, as follows, to facilitate the study. So, The social responsibility of entrepreneur towards suppliers, creditors, and depositors are different and important for any business organization growth.
Responsibility of Entrepreneur towards Suppliers
The services of the suppliers are also important for any business because they supply raw materials, machinery, labor, and other materials.
Without hem, the smooth operation of the business is quite difficult.
The responsibilities of the entrepreneurs towards the suppliers are as follows:
1. To Pay Fair Prices of Goods
The entrepreneurs should pay reasonable prices for the materials purchased from the suppliers.
Often, the farmers provide cotton, sugarcane, and jute etc. to various industrial, for use as raw material.
However, the Industrialists pay them very low prices for these commodities.
Entrepreneurs should pay reasonable prices for this type of raw material.
2. To Pay in Reasonable Time
The responsibility of the entrepreneurs is that payment to the suppliers may be made in time so that they may not have to face financial difficulties and may carry out their functions smoothly.
3. To Inform about Changes in Market
The entrepreneurs have the responsibility to provide regular information to the suppliers regarding changes happening in the demand of the commodities in domestic and foreign markets, fashion and design, etc.
So that the suppliers may make necessary changes in their manufacturing projects, according to the requirements.
4. To Give Guarantee of Minimum Price
The entrepreneurs should give the guarantee of minimum prices to the suppliers so that they may feel assured about the certainty of the price and may continue to maintain their will power.
5. To Motivate Indigenous Supplies
If the suppliers of the raw materials, machinery, and equipment are both indigenous and foreigners, indigenous suppliers should be encouraged.
The materials of the indigenous suppliers should not be rejected in the attraction of foreign suppliers.
6. To Provide Technical Advice
The entrepreneur has the responsibility to provide technical assistance to the suppliers for the production of anew and substituted commodities.
The entrepreneurial organizations and Institutions and suppliers together should short research projects.
7. To Inform Suppliers of Future Developments
The Entrepreneur should provide information about possible future development to the suppliers, in time, so that they mold themselves according to the changing circumstances.
Besides, they should also be provided information about likely increase in demand for their material, so that they may become capable of increasing the resources, required to meet the increased demand.
8. To Promote Healthy Competition
The entrepreneur should not encourage unhealthily and cutthroat competitions among the suppliers, for the sake of obtaining goods from them at the minimum price only healthy competition should be encouraged.
Besides, encouragement should be provided to individual suppliers and institutional suppliers.
Responsibility of Entrepreneur towards Creditors
Various plans are prepared for development and expansion of the business and for that various projects are also formulated.
For their completion, capital is the foremost requirement, which is fulfilled through loans from the individuals, Financial Institutions and Banks.
The entrepreneur has the following important responsibilities towards the creditors:
1. To Obtain Loans on Reasonable Conditions
Some certain conditions are required to be fulfilled to obtain any type of loan.
These conditions should be reasonable, both for the creditors and the business organization.
The entrepreneur should follow these conditions.
2. To Follow Mortage Rules
The creditors provide loans in secured and unsecured forms.
If the creditor has provided the secured loan on the mortgaged property, the entrepreneur should follow the rules of mortgaged property should be safeguarded and should be handed over the creditor, if so required under the rules.
3. To Follow Business Ethics
Both the entrepreneurs and creditors should follow the business ethics in providing loans and in repayment of loans.
The loan procedures should be honestly complied with.
4. Proper Utilisation of Debt Capital
Loans are obtained for particular objectives. Hence, entrepreneurs should utilize the loan amount only for the desired objectives.
The loan amount should not be utilized by small entrepreneurs for unproductive activities.
Not only that, but loan capital should also be invested only for objectives and projects specified for the loans.
Loan capital should be utilized with the utmost economy.
5. Regular Payment of Installment and Interest
The entrepreneurs should pay loan installments and interest regularly, according to repayment conditions.
If installments and interests are not paid timely, the loan burden goes on increasing and it also has an adverse effect on the reputation of the business organization.
6. Repayment of Loan
Loans should always be paid in on the maturity date, which facilitates regular capital flow in the business society and also saves the Banks and Financial Institutions from adverse effects.
Responsibility of Entrepreneur towards Depositors
Joint-stock companies accept deposits from the public to obtain finances.
The depositors may deposit their savings in the savings account or fixed deposit accounts of the company.
The company/business has the following social responsibilities towards the depositors:
1. To Safeguard Money
The entrepreneur should provide to be understood full security to the deposit of depositors.
Their money should be invested in high risk-bearing projects.
2. Regular Payment of Interest
The reasonable interest should be paid to the depositors, in time.
The interest rate should be somewhat higher than the Bank deposits.
The interest may be regularly deposited in their accounts.
3. Provide Easy Drawing Facilities
The entrepreneur or company should allow facilities for easy withdrawals by the depositors when they need money.
Besides, suppliers of raw materials should not be used on withdrawing their deposits.
4. To Render Special Facilities
Special facilities should be provided to depositors in procuring commodities and services, so that deposits may go on increasing.
Thus, Now you all know the different responsibilities of entrepreneurs towards supplier’s creditors and depositors.