Social Responsibility of Business & Business Ethics (Chapter 6)

Flashcards covering key concepts from Social Responsibility of Business, environmental protection, and business ethics as taught in the notes.

What is Social Responsibility?

The obligations of businessmen which are desirable in terms of the objectives and values of our society.

Why is social responsibility important for business survival?

No business can survive without the support of society.

Name an argument for social responsibility related to existence and growth.

Existence and growth of the business; prosperity and growth of business is possible only through rendering continuous service to society.

How does social responsibility affect long-term profits?

Supporting social goals enhances public image; a firm’s image leads to more profits in the long run.

Why might businessmen voluntarily assume social responsibilities?

To avoid government regulations (e.g., environmental pollution).

What does 'Maintenance of society' mean in this context?

If people feel that they are not getting their due, they will not support such business.

What resources can business use to solve society's problems?

Managerial talent and financial resources.

What does 'Converting problems into opportunities' mean for business?

Business looks for converting risky situations into opportunities to solve social problems.

Why is a better environment for doing business important?

A society with fewer problems and complaints provides a better environment for the business.

What is the moral obligation regarding social problems created by business?

Holding business responsible for social problems; it is their moral obligation to solve them.

List the eight arguments for social responsibility.

Existence and growth; Long term interest of the firm; Avoidance of government regulations; Maintenance of society; Availability of resources with business; Converting problems into opportunities; Better environment for doing business; Holding business responsible for social problems.

Who are the four interest groups of business?

Owners, Workers/Employees, Consumers, Government & Community.

What are shareholders' expectations?

Safety of investment; Adequate return on investment; Accurate financial information should be provided.

What are workers' expectations?

Fair wages; Job security; Promotion opportunities; Welfare measures; Better working conditions; Participation in management.

What are consumers' expectations?

Regular supply of commodities; Better quality; Reasonable price; Avoidance of unfair trade practices.

What are government and community’s expectations?

Lawful business; Prompt payment of tax; Help in socio-economic development; Optimum use of natural resources; Safety and welfare of the people; Control pollution.

What should top management do for environmental protection?

Create a work culture for environmental protection and pollution control.

What should be done with ideas and information about environmental protection?

Share ideas and technical information among the employees.

Why use good quality materials in environmental protection?

To reduce environmental pollution.

What is the role of modern technology in environmental protection?

Adopt modern technology.

Why follow government rules and regulations?

Follow the rules and regulations by the government.

What are scientific methods used for in environmental protection?

Adopt scientific methods of waste management.

What is meant by support in government programs?

Support in Govt. Programs like clearing polluted water sources, plantation of trees, checking deforestation.

What is timely assessment in environmental protection?

Timely assessment of pollution control programs.

List the eight elements of environmental protection in business.

Good work culture; Ideas and information to employees; Use good quality materials; Adopt modern technology; Follow the rules and regulations; Scientific methods of waste management; Support in Govt Programs; Timely assessment of pollution control.

What is Business Ethics?

The moral principles; Ethics derives from the Greek word ethos meaning character; ethics specifies what is good or bad, fair or unfair, right or wrong.

What do business ethics refer to?

The moral principles followed by a businessman in his dealings; e.g., better quality, fair price, justice, courage, thrift.

How do ethics help a business?

Helps to win the confidence of customers which will ensure the prosperity and progress of the business.

Name some ethical business practices.

Fair and reasonable price; Correct weight and measures; Prompt payment of tax; Fair treatment to the employees; Sale of genuine products; Reasonable profit; No bribes.

What are the elements of business ethics?

Top Management Commitment; Publication of a Code; Compliance Mechanism; Involving Employees at all Levels; Measuring Results.

What is Publication of a Code in business ethics?

A written document containing the moral principles to be followed by the organization.

What is a Compliance Mechanism?

A mechanism to ensure that actual decisions and practices comply with the firm’s ethical standards.

Why involve employees at all levels in ethical programs?

Involvement of employees at all levels in ethical programs is essential for adherence; e.g., group discussions.

What is the purpose of measuring results in ethics programs?

To monitor actual performance against ethical standards and take necessary actions.