chapter 6 class 11 business studies

1. SOCIAL RESPONSIBILITIES OF
BUSINESS AND BUSINES
ETHICS

2. SOCIAL RESPONSIBILITY

3. CONCEPT
 Social responsibility of business refers to its
obligation to take those decisions and
perform those actions which are desirable
in terms of the objectives and values of our
society.
 It involves an element voluntary action on
the part of business people for the benefit
of society. Social responsibility is the firms
recognition of social obligations laid down
by law. It follows that a responsible
business must act with due concern for the
effects on the lives of other people.

4. NEED FOR SOCIAL RESPONSIBILITY
 The firm needs to be responsible for
serving the interest of other sections of
society such as customers, employees,
suppliers, government and community
etc.
 It is an ethical issue, it involves the
question of what is morally right or
wrong in relation to the firm’s
responsibilities.

5. ARGUMENTS FOR SOCIAL RESPONSIBILITIES
 Justification for existence and growth.
 Long term interest of the firm.
 Avoidance of government regulation.
 Maintenance of society.
 Availability of resources with business.
 Converting problems into opportunities.
 Better environment for doing business.
 Holding business responsible for social
problems.

6. ARGUMENTS AGAINST SOCIAL
RESPONSIBILITY
 Violation of profit maximization
objective.
 Burden on consumers.
 Lack of social skills.
 Lack of broad public support.

7. Reality of social responsibility
 Threat of public regulation.
 Pressure of labour movement.
 Impact of consumer consciousness.
 Development of social standard for business.
 Development of business education.
 Relationship between social interest and
business interest.
 Development of professional, managerial
class.

8. KINDS OF SOCIAL RESPONSIBILTY
 Economic responsibility
 Legal responsibility
 Ethical responsibility
 Discretionary responsibility

9. SOCIAL RESPONSIBILITY TOWARDS DIFFERENT
INTEREST GROUPS
 Responsibility towards the shareholder or
owners.
 Responsibility towards the workers.
 Responsibility towards the consumers.
 Responsibility towards the government and
community.

10. BUSINESS ETHICS

11. CONCEPT
Ethics is concerned with what is right and what
is wrong in human behavior judged on the
basis of conduct/behavior of individuals, as
approved by society in a particular field of
activity. Ethics may be viewed as the entire
body of moral values that society attaches to
the actions of human beings. Ethics can also
refer to codes or other system for controlling
means so that they serve human ends.

12. ELEMENTS OF BUSINESS ETHICS
 Top management commitment.
 Publication of a “code”.
 Establishment of compliance mechanisms.
 Involving employees at all levels.
 Measuring results.