Social responsibility

1. Class 11
Business Studies

2. Chapter - 6
SOCIAL RESPONSIBILITIES
OF BUSINESS
& BUSINESS ETHICS

3. Social Responsibility
No business can survive without the
support of society
Therefore, it has some responsibilities to
the society

4. Social Responsibility
Social responsibility means the
obligations of the businessmen which are
desirable in terms of the objectives and
values of our society

5. Arguments for Social Responsibility
1 Existence and growth
Prosperity and growth of business is possible only
through rendering continuous service to society

6. Arguments for Social Responsibility
2 Long term interest of the firm
A firm and its image stands to gain more
profits in the long run when it accepts service
as the highest goal
Supporting social goals enhances public image of
any firm

7. Arguments for Social Responsibility
3 Avoidance of government regulations
Businessman should voluntarily assume social
responsibilities, so that they can avoid government
regulations. Eg: Environmental pollution

8. Arguments for Social Responsibility
4 Maintenance of society
If the people feel that they are not getting their due
from the business, they will not support such
business organisations

9. Arguments for Social Responsibility
5 Availability of resources
with business
Available resources with the business such as
managerial talent and financial resource can be
utilized to solve the problems of the society when it
is needed

10. Arguments for Social Responsibility
6 Converting problems into
opportunities
Business is always looking for converting risky
situations to opportunities, this quality can be
utilized for solving the problems in the society

11. Arguments for Social Responsibility
7 Better environment for doing
business
A society with fewer problems and complaints
provides better environment for the business

12. Arguments for Social Responsibility
8 Holding business responsible for
social problems
Some of the social problems such as pollution,
unsafe work environment, discrimination in
employment etc. are created by business
enterprises themselves, so that it is their moral
obligation to solve them

13. Arguments Against Social Responsibility
1 Violation of objective
Business is an economic entity and its main
objective is profit maximization
If the business organizations are engaged in
social activities their profit will be reduced
It will affect the success of business

14. Arguments Against Social Responsibility
2 Burden on consumers
The cost of social responsibility will be shifted to
the consumers by charging higher prices

15. Arguments Against Social Responsibility
3 Lack of social skill
It is an argument that the business people have no
skill to take up social work as they are always
engaged in business activities

16. Arguments Against Social Responsibility
4 Lack of public support
Public usually do not like business interference in
social programs, so that they cannot operate
successfully in such areas

17. Reality of Social Responsibility
1 Threat of public regulation
When business enterprises act in a socially
irresponsible manner, government will act by
regulating them for safeguarding public interest

18. Reality of Social Responsibility
2 Pressure of labour movement
Labour movement has become very powerful
now-a- days, so that the businessmen are forced to
protect the interest of the workers

19. Reality of Social Responsibility
3 Consumer consciousness
Business enterprises have started customer
oriented policies as they are aware about their
rights and privileges

20. Reality of Social Responsibility
4 Development of social standard for
business
Newly developed social standards consider only
legitimate economic activities along with serving
the society
Then only the business can survive and grow

21. Reality of Social Responsibility
5 Development of business education
Because of development of business education,
people are aware of the social purpose of business

22. Reality of Social Responsibility
6 Relationship between social interest
and business interest
Businessmen have realized that social interest and
business interest are not contradictory, but they are
complementary to each other

23. Reality of Social Responsibility
7 Development of professional
managerial class
Professional management education has created a
class of professional managers who have got a
positive attitude towards the social responsibility as
compared to the earlier class of owner managers

24. Kinds of Social Responsibility
1
Economic responsibility
Since the business is an economic entity, it has to
produce goods and services that society wants and
sells them at a profit

25. Kinds of Social Responsibility
2
Legal responsibility
Business enterprises have the responsibility to
operate within the laws of the country

26. Kinds of Social Responsibility
3
Ethical responsibility
It refers to the moral principles to be followed by
the businessmen in relation to the society
Eg: Protecting religious sentiments and dignity of
people while advertising a product

27. Kinds of Social Responsibility
4
Discretionary responsibility
This is voluntary obligation of a business enterprise
Eg: giving charity to an educational institution,
helping people in natural calamities etc.

28. Social Responsibility towards
different interest groups
1 Owners
a)Safety of investment.
b)Adequate return on investment.
c)Accurate financial information should be
provided.

29. Social Responsibility towards
different interest groups
2 Employees
a)Fair wages
b)Job security
c)Promotion opportunities
d)Welfare measures
e)Better working conditions.
f)Participation in management.

30. Social Responsibility towards
different interest groups
3 Consumers
a)Regular supply of commodities.
b)Better quality
c)Reasonable Price
d)Avoidance of unfair trade practices.

31. Social Responsibility towards
different interest groups
4 Suppliers
a) Better relationship
b) Prompt payment.

32. Social Responsibility towards
different interest groups
5 Government and Community
a)Lawful business.
b)Prompt payment of tax.
c)Help the government in socio-economic
development(employment opportunities,
literacy, poverty etc.)
d)Optimum use of natural resources.
e)Concentrate in safety and welfare of the
people.
f)Control pollution as far as possible.

33. Business and environmental protection
The health and well being of people depends
on the quality of environment in which they
live and work
Better
Environment

34. Business and environmental protection
Rapid industrialization and growing traffic
have caused a great damage to the
environment

35. Business and environmental protection
Pollution is the injection of harmful
substances into the environment largely
because of industrial production
It changes the physical, chemical and biological
characteristics of air, water and land

36. Causes & Type of Pollution
1 Air Pollution
It is the contamination of air by the accumulation
of harmful or toxic substances which will create
serious health problems to living organisms,
monuments etc.

37. Causes & Type of Pollution
2 Water Pollution
Water is said to be polluted when it is changed in
the quality as a result of waste disposal and
other human activities, so that it become less
suitable for drinking

38. Causes & Type of Pollution
3 Land / Soil Pollution
It may be due to the dumping of non-degradable
waste material into the land from industrial units,
hospitals, hotels, dwelling units etc.
This damages the quality of soil making it unfit for
cultivation

39. Causes & Type of Pollution
4 Noise / Sound Pollution
It may cause damages to the human body and
mind, the smooth functioning of hospitals,
educational institutions etc.
Industrial units, Automobiles etc. are the major
sound pollutants

40. Reasons / Need for Pollution Control
1 Reduction of health hazards
Major diseases like cancer, heart attacks etc. are
caused by pollutants in the environment
Pollution control measures only can prevent such
diseases up to a certain extent

41. Reasons / Need for Pollution Control
2 Reduce risk of liability
In case a disaster has been taken place, the entire
liability should be borne by the enterprise
E.g. Union Carbide Tragedy in Bhopal

42. Reasons / Need for Pollution Control
3 Cost savings
Effective pollution control strategy helps to reduce
cost of operating business
If they use improper technology with greater
wastes leading to high waste disposal cost

43. Reasons / Need for Pollution Control
4 Public image
A business enterprise which follows good
pollution control measures can enjoy good
reputation in the society

44. Reasons / Need for Pollution Control
5 Other social benefits
It includes clear visibility, clean buildings and
monuments, quality life and availability of
pure natural products
Taj Mahal

45. Role of business in environmental protection
1 Work culture
Top management should create a work culture
for environmental protection and pollution control

46. Role of business in environmental protection
2 Ideas and information to employees
Share the ideas and technical information
regarding environmental protection among the
employees

47. Role of business in environmental protection
3 Good quality materials
Use good quality materials to reduce
environmental pollution

48. Role of business in environmental protection
4 Modern Technology
Adopt modern technology

49. Role of business in environmental protection
5 Rules and regulations
Follow the rules and regulations by the
government

50. Role of business in environmental protection
6 Scientific methods
Adopt scientific methods of waste management

51. Role of business in environmental protection
7 Support in Govt. Programs
Support in government programs like clearing up
of polluted water sources, plantation of trees,
checking deforestation etc.

52. Role of business in environmental protection
8 Timely assessment
Timely assessment of pollution control programs

53. Business Ethics
The word “ethics” derived from the Greek word
“ethos” which means character or sentiments of
community
Ethics specifies what is good or bad, fair or unfair,
right or wrong

54. Business Ethics
Business ethics refers to the moral principles
followed by a businessman in his dealings with
the people
Eg: Better quality, fair price, justice, courage,
thrift etc.

55. Business Ethics
Business ethics helps to win the confidence of
customers which will ensure the prosperity and
progress of the business

56. Ethical Business Practices
1 Fair and Reasonable Price

57. Ethical Business Practices
2 Correct weight and measures

58. Ethical Business Practices
3 Prompt payment of tax
Disclose actual profit and prompt payment of tax

59. Ethical Business Practices
4 Fair treatment to the employees

60. Ethical Business Practices
5 Sale of genuine products

61. Ethical Business Practices
6 Reasonable profit

62. Ethical Business Practices
7 No bribes

63. Examples of ethical business practices:
●Fair and reasonable price
● Correct weight and measures
●Prompt payment of tax
●Fair treatment to the employees
●Sale of genuine products to customers
● Take reasonable profit
● No bribes

64. Examples of unethical
business practices

65. Unethical Business Practices
1 Adulteration

66. Unethical Business Practices
2 Poor quality

67. Unethical Business Practices
3 Black marketing and Hoarding

68. Unethical Business Practices
Misleading advertisement

69. Unethical Business Practices
5 Fake goods

70. Unethical Business Practices
6 Deceptive packing

71. Unethical Business Practices
7 Pollution of environment

72. Unethical Business Practices
8 Exploitation of workers

73. Common unethical business practices:
●Adulteration
●Poor quality
●Black marketing and hoarding
● Misleading advertisements
●Fake goods
● Deceptive packaging
●Pollution of environment
●Exploitation of workers

74. Elements of Business Ethics
1 Top Management Commitment
The top level managers need to be openly
strong in ethical matters, so that they can guide
their organization towards ethically upright
behaviour

75. Elements of Business Ethics
2 Publication of a “Code”
Code means a written document which contains
the moral principles to be followed by the
organization
Eg: Honesty, adherence to laws, quality, health
and safety in workplace, employment practices
fairness in selling etc.

76. Elements of Business Ethics
3 Compliance Mechanism
A suitable mechanism should be introduced to
ensure that actual decisions and practices
comply with firm’s ethical standards
Eg: Paying attention to values and ethics in
recruiting employees

77. Elements of Business Ethics
4 Involving Employees at all Levels
Involvement of employees in all the levels in
ethical programs is a must, then only they can
do accordingly
Eg: Conducting a group discussion among the
employees in small groups to discuss the ethical
policies to be followed in the firm

78. Elements of Business Ethics
5 Measuring Results
The firm can monitor the actual performance
with ethical standards and they can take
necessary steps for further course of action