Social Responsibilty of business and business ethics

Arguments against SR

(Violation of profit maximisation)

-business exists only for profit

-SR is against profit maximisation

-to maximise profits- 1) increase efficiency 2)reduce costs

Arguments against SR

(Burden on consumers)

-pollution control/ enviromental protection→very costly→to shift burden→charge higher from consumers

Arguments against SR

(Lack of Social skills)

Businessmen do not hae the necessary understanding&training to solve social problems

-specialized agencies

Argument against SR

(Lack of broad public support)

general public doesnt like businesses to get involved in social programmes

Reality of SR

(Threat of public regulation)

govt→act as welfare states→take care of society

when business is acting socially irresponsible→ action taken→regulate them→safeguarding people’s interest

Reality of SR

(Pressure of labour movement)

labour now has become more educated & powerful

labour movement→extracting gains→working class→become powerful

forced business enterprises to pay due regard to WELFARE OF WORKERS

“HIRE&FIRE”❌

Reality of SR

(Development of social standard for business)

Business→ no longer money crazy→

New social standards→ consider economic activity (legitimate)+also must serve social needs

Kinds of SR

(economic)

business enterprise→economic entity

hence, primary SR is economic

-produce goods&services and sell them at PROFIT

Kinds of SR

(legal)

-operate w laws of land

Kinds of SR

(ethical)

-behaviour of firm(expected by society)

-not codified by law

-element of voluntary action

KInds of SR

(discretionary)

purely voluntary obligation

eg: charity

-safeguard capital investment by undertaking healthy business ventures

SR towards different interest groups

(shareholders/owners)

-provide FAIR RETURN on their capital investment-

-ensure safety of investment

-regular accurate and full info about working & schemes of future growth

SR towards different interest groups

(workers)

-providing opportunities for meaningful work

-create right kind of working conditions(win cooperation)

-respect democratic rights

-fair wages

-fair deal from managment

SR towards different interest groups

(consumers)

-supply of right quantity or quality of goods

SR towards different interest groups

(govt & community)

-respect the law

-pay taxes regularly

-protect natural environment

-develop proper image in society

-avoid dirty working conditions