SOCIAL RESPONSIBILITIES OF BUSINESS AND BUSINES

ETHICS

SOCIAL RESPONSIBILITY

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.

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.

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.

ARGUMENTS AGAINST SOCIAL RESPONSIBILITY

Violation of profit maximization objective.

Burden on consumers. Lack of social skills. Lack of broad public support.

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.

KINDS OF SOCIAL RESPONSIBILTY

Economic responsibility Legal responsibility Ethical responsibility Discretionary responsibility

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.

BUSINESS ETHICS

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.

ELEMENTS OF BUSINESS ETHICS

Top management commitment. Publication of a “code”. Establishment of compliance

mechanisms. Involving employees at all levels. Measuring results.