Social responsibility of business refers to its obligation to take those decisions and perform those actions which are desirable in terms of the objectives and values of our society. It implies that business enterprises respect the aspirations of society and try to contribute to the achievement of these aspirations along with their profit interests. It involves an element of voluntary action on the part of business people for the benefit of society.

Legal responsibility is fulfilled by mere compliance with the law, whereas social responsibility is broader than legal responsibility. While legal responsibility requires operating within the laws of the land, social responsibility is a firm’s recognition of social obligations even though not covered by law. It goes beyond legal mandates to include ethical behaviour and voluntary service to society.