Social Responsibility of Business and Business Ethics Class 11th chapter 6

Chapter 06 

Social Responsibility of Business and Business Ethics

Definition of Social Responsibility: -

Social responsibility refers to the business's responsibility in which it works in the highest interest of the society. The social obligation of business is different from the legal liability. Legal liability is met from fulfilling the provisions of the law, but social responsibility relates to voluntary efforts made by the businessmen to contribute to the well-being of the society.

Arguments in favor of social obligation : -

Although business is an economic activity, the business should support social responsibility, keeping in mind the modernization concept. In favor of the recognition of social responsibility, the following arguments have been given: -

1. Social existence : - The business has been created by society, that is why it should fulfill the demands of society because business uses instruments that are related to society, that is why it is necessary that every business adheres to its social obligations.

2. Self-interest : - Meeting the aspirations and demands of society takes place in the interest of the business. Those who have good environment, education and environment. Those people prove to be a better customer and employee for business.

3. Public image : - If the business meets its social obligations, its public image will improve. By fulfilling social obligation, business maintains its credibility in the public, good business relationships with employees and suppliers boost business success.

4. Rescue from government intervention :- If the business does not meet the needs of the society in its own interest, then the government can force the business to fulfill its social obligation through law. This eliminates the freedom of business, so it is in the interest of the business that it will fulfill its responsibility towards society by its own self.

5. Conscious awareness :- Nowadays the consumer is fully conscious. They expect high quality items at high prices, if business is not treated fairly by them, they organize themselves and force the business to fulfill its social responsibility.

6. Moral justification : - Every business relies on society to sell goods and services, and in addition to the common facilities provided by the business community such as: - roads use electricity and water, hence it is the moral responsibility of the business that it will give its social responsibility Complete and contribute to the well-being of the society.

Logic against social obligation

Generally it is not the business's purpose to have a social obligation, To give up against the social obligations by business, the following are as follows: -

1. Benefit objective :- Business is an economic activity, its main purpose is earning profit. Its main liability is to produce and sell goods and services and to earn profits for its owners. It should not waste its resources and powers in fulfilling the social obligations.

2. Decreasing the social purpose: - There is a conflict in the business's purpose and social responsibility, if the business is interested in the actions of the society, then it may not be able to focus on its production work and in such a manner both economic and social work will be satisfactory.

3. Putting financial resources in the second task : - Business is a trustee of owners' capital If it does social work, it means that it is spending the resources of business in other directions, Because there is economic cost even on social work The manager of the business has no right to put the money of the lord in social work.

4. Costs of participating in social work :- Business expenditure is very much spent in fulfilling social obligations, this expense is ultimately to be given to business customers, if the value of the item is determined by the cost of production and the cost of social work, then the customer will pay more Will have This will lead to unnecessary burden on customers.

5. Deficiency of social skills :- Business managers may lack the skills needed to deal with social problems. In fact, the attitude of business managers is commercial, as a result manager can not properly take responsibility for social issues. 

Business

a) Owner/Investor                 

b) Employee             

c) Consumer        

d) Suppliers        

e) Government 

f) Community and Society

Business is a social institution, it is related to different groups of society such as: - Owners, employees, suppliers and government and society. As shown in the picture, it should fulfill its obligation towards each of these groups. The specific responsibility of the business towards different groups is as follows : -

Responsibility towards owners or investors: - The owner or investor provides funds to the business. They expect a return on their investment at a reasonable rate and expect to increase the value of their investment in the business. The business has the following responsibilities towards shareholders or owners :-

1. To ensure fair and regular counterparty on the investment of owners or shareholders.

2. Ensure the safety of investors.

3. Strengthen the financial position of the company so that value can increase in capital.

4. Protecting the business property.

Responsibility towards employees : - Employees are the means of labor, they Should be treated with humane. Their cooperation is essential for fulfilling the business objective, the managers towards the employees should fulfill the following responsibilities : -

1. Paying proper wages and salaries to their employees so that they can live a good life and satisfy their needs.

2. To maintain the health of employees, good work should be provided.

3. To get employees' support by building human relations in business.

4. Recognizing the rights of employees to go on strike for proper wage, affecting work and protecting their interests.

5. Providing opportunities for employees to develop their skills through training and education

Responsibility toward consumers :- All businesses want consumer satisfaction, they want the goods to be delivered to the consumer at a minimal price. There is an example of adulteration in substance, poor quality, lack of proper dislike, lack of service to customers, inappropriate advertising, etc., by neglecting their obligation towards a consumer by business ventures, it is therefore the duty of the manager to : -

1. To supply right quality of goods & services at reasonable prices.  

2. To ensure regular and adequate supply of products.  

3. To inform them about new products and new uses of existing products.  

4. To handle the customers grievance promptly.  

Responsibilities towards suppliers :- Manager should deal with suppliers with justice. They should carefully deal with the suppliers. In the absence of proper transaction, the supplier will not lend the goods. In short, there is the following responsibility towards the suppliers of management :

1. To ensure regular payment to suppliers

2. Supporting small scale suppliers

3. Protecting the Suppliers from Exploitation

4. Helping suppliers to improve the quality of their items

Responsibility Towards Government -  

1.To pay taxes honestly  

2. To observe rules laid down by the government.  

3. To avoid corrupting government employees.  

Responsibility towards community -  

1. To make available opportunities for employment.  

2. To avoid polluting the environment.  

3. To uplift the weaker sections of society

BUSINESS AND ENVIRONMENTAL PROTECTION :-  

Meaning of Envronment : - 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 - cultural heritage, socio economic institutions and the people.  

Meaning of Environmental pollution - It means injection of harmful substances into the environment. The greatest problem that industries and businessmen are creating is that of pollution - which is the result of industrial production. So, protection of environment is must.  

Causes of Pollution :- Many industrial organisations have been responsible for causing air, water, land and noise pollution.  

1. Air Pollution - Due to smoke, chemical emitted by factories, vehicle. It has created a hole in the ozone layer leading to global warming. It is the obligation of business to control the use of industrial chemicals and take steps to prevent air pollution. 

2. Water pollution - Due to chemicals and waste dumped into the rivers, streams & lakes. It has led to the death of several animals and posed a serious problem to human life. Therefore, the responsibility of each industrial unit should be to take steps to prevent water pollution.

3. Land Pollution - Due to dumping of garbage and toxic wastes which affect the fertility of land and makes it unfit for agriculture. Strong methods should be adopted for disposal of waste by industrial organizations to control land pollution.

4. Noise Pollution - Caused by the running factories and vehicles. Noise pollution can be responsible for many diseases like loss of hearing, violent behaviour and mental disoder. That is why it is imperative that industrial units use the necessary equipment to keep the noise level low 

NEED FOR POLLUTION CONTROL :-  

1. To ensure healthy life - Many diseases like cancer, heart attack and lung complications all caused by pollutants in the environment. Pollution control is must to keep a check on these diseases.  

2. To ensure safety - Due to environmental pollution and smoke the visibility is reducing due to which chances of accidents have been increasing. To reduce the number of accidents there must be a check on pollution.  

3. Economic Losses - Pollutants in the environment bringing heavy economic losses for the country, for example Taj Mahal is losing its beauty due to pollution.  

4. Improved Public Image - A firm that adopts pollution control measures enjoys a good reputation as a socially responsible enterprise.  

ROLE OF BUSINESS ENVIRONMENTAL PROTECTION :  

1. Eco-friendly and clean or low waste technology should be used by industrial organisation.  

2. Industrial wastes should be recycled as far as possible.  

3. Plant and machinery should be modernised to minimise pollution.  

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

5. Positive steps should be taken to save environment. These include  

plantation of trees, cleaning of rivers, ponds etc.  

BUSINESS ETHICS :  

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 By ethic we mean the business practices which are desirable from the point of view of Society. The purpose of business ethics is to guide the managers and employees in performing their jobs. Examples of business ethics are charging fair prices from customers, giving fair treatment to workers, earning reasonable profits and paying taxes to the government honestly.  

ELEMENTS OF BUSINESS ETHICS: 

Top management commitment - The CEO and higher level mangers must be committed to ethical norms of behaviour. This would set an example for all employers and encourage them to follow ethical practice.  

Publication of Code - Code of ethics is a formal written document of the principles, values and standards that guide a firm s actions. It may cover areas like honesty, Quality, safety, health care etc.  

Establishment of Compliance Mechanism - A suitable mechanism should be developed to comply with the ethical standards of the enterprise, This mechanism should be properly communicated to all in the organisation.  

Employees Involvement - It is the employees at the lower levels who implement ethical principles, so they must be involved in the process of developing ethical code  

Measuring Results - Although it is difficult to measure the ethical results but it must be verified and audited that how far work is being carried according to ethical standards.  

QUESTIONS (ONE MARK)  

1. Define social responsibility of business.  

2. Write two examples of business ethics.
3. State two effects of noise pollution.
4. What is environmental pollution?

3/4 MARKS QUESTIONS  

5. Why business is responsible for Environment Protection.
6. Enumerate any three responsibilities of business towards employees.
7. Why should a business assume social responsiblity?
8. Explain the major causes of environmental pollution.
9. Define business ethics and explain its significance.

5/6 MARKS QUESTIONS  

10. Explain the forces which are responsible for increasing concern of business enterprises towards social responsibility.
11. It is in the interest of business to fulfill its social responsibilities towards different interest groups . Explain.