Business is essentially a social institution and not merely a profit-making activity because it involves social responsibility. Social responsibility of a business refers to its obligation to make those decisions and perform those actions which are desirable in terms of the objectives and values of our society and business profits. The fact is that one of the most important recent changes in the attitude of businesspeople has been the realisation that they have social obligations to fulfil besides ensuring their own existence through profitable activity hence they think of maximisation of profit which has to be done by abiding the laws of the government. As a business uses social resources such as human and physical capital and it cannot separate itself from society and the business shouldn't affect the lives of other people hence it is not merely a profit-making organisation but a social institution.