BST- Social Responsibilities of Business and Business Ethics

CBSE class 11 Business studies ch.6

Social Responsibility

Social Responsibility

A busniness’s obligation to take those decisions and perform desirable actions in terms of the objectives and values of society.
Invlovles voluntary action on the part of business people for the benefit of society

Arguements in favour for SR

• Justification for existence and growth

• Long-term interest of the firm

• Avoidance of govt regulation

• availability of resources with business

• better environment for doing business

• contribution to social problems
  

Arguements against SR

• Profit motive

• Burden on consumers

• Lack of social skills

• Lack of public support

Factors which have forced businessmen to consider responsibilities

1. Threat of public regulation

2. Pressure of labour movement

3. Impact of consumer consciousness

4. Development of social standard for business

5. Development of business education

6. Relationship b/w social and business interests

7. development of professional managerial class

Types of SR

• Economic Responsibility

• Legal responsibility

• Ethical responsibility

• Discretionary responsibility

SR toward diff interest groups

• Shareholders or Owners

• Community

• Workers or Employees

• Government

• Consumers

Responsibility towards shareholders / Owners

(i) To ensure a fair and regular return on the investment of shareholders/ Owners.
(ii) To ensure the safety of their investment.
(iii) To strengthen financial position of the company.
(iv) To safeguard the assets of the business.
(v) To protect the interest of all types of investors in the business.

Responsibility Towards workers

(i) Providing fair compensation and benefits.
(ii) Providing good and safe working conditions.
(iii) To develop a sense of belongingness.

Responsibility toward consumers

(i) To supply right quality of goods & services at reasonable prices.
(ii) To ensure regular and adequate supply of products.
(iii) To inform them about new products and new uses of existing products.
(iv) To handle the customers grievance promptly.

Responsibility towards Government

(i) To pay taxes honestly.
(ii) To observe rules laid down by the government.
(iii) to avoid corrupting government employees.

Responsibility towards community

(i) To make available opportunities for employment.
(ii) To avoid polluting the environment.
(iii) To up lift the weaker sections of society

Business and Environmental protection

• The environment is defined as the totality of man’s surroundings - both Natural and Man-made.

• Natural Resources - all land, water, air and, Man-made Resources - cultural heritage, socio-economic institutions and the people.

• Environmental Pollution means injection of harmful substances into the environment. The greatest problem that industries creating is that of pollution - which is the result of industrial production.

what gets affected

air water land noise (expand on ur own)

Need for pollution control

• Reduction of health hazards

• Reduced risk of liability

• Cost savings

• Improved public image

• Other social benefits (Clear visibility, clean buildings, natural products in pure form etc)

Role of business in environmental protection

• Eco-friendly and clean or low waste technology should be used by industrial organization.

• Industrial wastes should be recycled as far as possible.

• Plant and machinery should be modernized to minimize pollution.

• The business houses should comply with the laws and regulations enacted for prevention of pollution.

• Positive steps should be taken to save environment. These include plantation of trees, cleaning of rivers, ponds etc.

Business Ethics

Concerned with establishing linkages b/w individual good and social good. Refers to the moral values or standards or norms which govern the activities of a businessman. Ethics define what is right and what is wrong.
“Ethic” - from greek word “ethics” meaning morals

Elements of Business ethics

• Top management commitment

• Publication of code

• Establishment of compliance mechanism

• Employee involvement

• Measuring results