Role and Responsibility of Local Community in Business


Issues related to economic development are often the primary area of interest for an enterprise’s surrounding community. This includes questions about jobs, contributions to the tax base, and the secondary impact of an enterprise (through local business linkages and the multiplier effect of the local payroll). Equally among a community’s primary interests are issues related to the management of local health, safety, and security risks and information on community complaints about corporate activities and how these are dealt with. In some contexts, the local community may also have concerns about the impact of an enterprise’s operations on local culture. Such impacts can result from the introduction of new products or services, or from the generation of internal migration.

Corporate social responsibility (CSR) promotes a vision of business accountability to a wide range of stakeholders, besides shareholders and investors. Key areas of concern are environmental protection and the wellbeing of employees, the community in particular and the civil society in general. Till recently, social and political theorists tended to believe that we lived in a two-sector world, comprising of market or economic sector business) and the state sector (government). A third sector consisting of, NGOs, local community groups, religious organizations came into prominence as pressure groups during the last decade to improve ethical management of business and to follow the CSR.

If corporations have to function ethically and serve not only the stockholders, but also cater lo the needs of all stakeholders. there has to be both an internal system and an external framework kept in place- to ensure these ideals. Most business concerns have realized that working closely with local communities is a win-win proposition for both the businesses as well as the local communities.”

Businesses may find that cultivating a partnership with a local community organization may take a little more time, research and thought, but the benefits are multiplied. And those benefits flow back into the community where the employees and their families live. A partnership with the local community ensures more chance of success because both parties want the local community to benefit, and they can actually see these benefits. The business will see a boost in patronage because local residents will see the good work the partnership is doing, and will want to support the business. The standing and profile of the business will improve among the members of the local community and set it apart from local competitors.

The business will ultimately benefit from the greater support from staff that will have a sense of ownership both of the partnership and the community it is benefiting. A good relationship with local authorities can boost business. For example, some local authorities prefer to award contracts to businesses with a record of community involvement. There are many ways for a business to get involved. Some businesses choose to support a local charity, or sponsor, a local event. It makes commercial sense to get involved in an activity related to the business. In this way not only the expertise of the business but also the human face of the business comes into the forefront. For example, some restaurants provide food to local homeless groups, while builders may give free labour and materials to community projects. Many businesses involve their employees in working with the local community. For example, by supporting charities chosen by employees. Some businesses encourage employees to volunteer for community activities and also give them paid time off for this.


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