The need for social responsibility arises both because of the firm's interest and the interest of society. There are arguments both for and against social responsibility.

Arguments for Social Responsibility:

(i) Justification for existence and growth: Business exists for providing goods and services to satisfy human needs. Though profit motive is an important justification for undertaking business activity, it should be looked upon as an outcome of service to the people. The prosperity and growth of business is possible only through continuous service to society.

(ii) Long-term interest and image of the firm: Social responsibility helps in building a positive image and ensures long-term success.

(iii) Avoidance of government regulation: By fulfilling social responsibilities voluntarily, business can avoid government interference.

(iv) Maintenance of orderly society: Business contributes to social stability.

(v) Availability of resources with business: Business has financial and human resources to address social problems.

(vi) Converting problems into opportunity: Social issues can be turned into business opportunities.

(vii) Better environment for doing business: A responsible business creates favourable conditions for its operations.

(viii) Holding the business responsible for social problems: Since business creates problems, it must help solve them.

Arguments against Social Responsibility:

(i) Violation of profit maximisation objective: Business exists only for profit maximisation. Any talk of social responsibility is against this objective.

(ii) Burden on consumers: Social initiatives increase costs, which are passed on to consumers.

(iii) Lack of social skills: Business persons may not have the expertise to handle social issues.

(iv) Lack of broad public support: Social responsibility initiatives may not receive adequate public support.