Business Studies XI

Social Responsibilities of a Business

1. What do you understand by social responsibility of business? How is it different from legal responsibility?

It implies the duties and set of responsibilities that a business organisation has towards the society and its members. It also insists the enterprise must conduct various activities which are beneficial for society. Business always makes use of resources of society and hence it is a part of their responsibility to give something back by working for improvement of society.

Social responsibility is different from legal responsibility as by abiding only the laws, legal responsibilities can be taken care of while social responsibilities are more concerned with doing better for society as in generating employment for poor and those who are physically challenged and employment opportunities for women.

2. What is environment? What is environmental pollution?

Environment comprises of the biotic and abiotic resources that are present in and around us. It impacts our quality of life. But with rapid growth in human population coupled with industrialisation, resources have been used resulting in their depletion or degradation. Also, harmful discharge into the environment has resulted in polluting the area.

There are 4 types of pollution:

1. Water pollution which is caused by industrial waste after getting discharged from pipe.

2. The dumping of toxic wastes in ground causes land pollution and also makes the land unfit for any kind of agricultural activities.

3. Noise pollution is caused by vehicles and factories causing health problems such as hearing loss and mental disorders.

4. Air Pollution is caused by burning of waste materials, exhaust fumes from vehicles that release harmful gases into atmosphere.

3. What is business ethics? Mention the basic elements of business ethics?

Business ethics deals with values and principles governing behaviour of an individual or an organisation and business activities that are considered as likeable from the society viewpoint. It helps managers and the other employees in performing their duties in a manner which is found to be socially acceptable.

Some elements of business ethics are:

1. Commitment from Top Management

2. Formation of a “code”

3. Establishing a compliance mechanism.

4. Involving employee at all levels.

5. Measuring results

4. Briefly explain (a) Air pollution, (b) Water pollution and (c) Land pollution.

1. Air Pollution is caused by burning of waste materials, exhaust fumes from vehicles that release harmful gases into atmosphere.

2. Water pollution which is caused by industrial waste after getting discharged from pipe.

3. The dumping of toxic wastes in ground causes land pollution and also makes the land unfit for any kind of agricultural activities.

5. What are the major areas of social responsibility of business?

Areas of social responsibility include:

1. Economic responsibility: Business enterprise operate with the sole purpose of earning profits. Hence a business must undertake activities for producing goods and services as per customer needs and sell them at reasonable prices.

2. Legal Responsibility: It is part of a firm’s responsibility to abide by the laws and regulations of the country of operation.

3. Ethical responsibility: It implies that any business enterprise must follow the business practices that are ethical and just from the society viewpoint

4. Discretionary Responsibility: This type of responsibility is voluntary in nature, it depends on the discretion of the organisation to start a hospital, provide scholarship to needy people or help with food to people facing food shortage due to any natural calamity.

Long Questions

1. Build up argument for and against social responsibilities.

For Social Responsibility:

1. Growth and Existence: A business looks towards gaining profits through providing goods and services to the customers. So for the long term growth a business depends not only on profits but also how they serve the society. So an organisation takes up social responsibility activities and it completely justifies its existence and support its growth.

2. Interest of the firm in long term: If a business is seen as not socially responsible by the stakeholders, then the support for such organisation reduces.

3. Avoiding Government Regulation: Business can avoid being regulated by government by adopting social responsibility practices.

4. Create a better environment for business: A business cannot conduct its operations if the environment in which it operates is not conducive for business. So adopting social responsibility helps stabilize the environment and provides a good environment to do business.

Against social responsibility:

1. Business is started with the purpose of profit maximisation, if the organisation is busy working for social causes, it may not become profitable as it will be lacking the essential resource necessary to earn profit.

2. Environmental problems like pollution involves high cost which will translate to higher cost being charged to customers by the organisations.

3. The general public is reluctant in letting business contribute to solving social issues and hence business have been seen to be not quite successful in addressing such issues.

2. Discuss the forces which are responsible for increasing concern of business enterprises towards social responsibility.

1. Labour movement pressure: Labours are more educated and know their rights well, hence it is essential for businesses to provide benefits and good working conditions, better remuneration so as to take care of welfare of the workers.

2. Consumer Consciousness: Consumers have become more conscious of their rights and thus the comapnies need to prepare products that are cost efficient.

3. Threat of Public regulation: If the company is not working in the direction of benefit of society, then the government may step in to safeguard the interests of the society.

4. Development of business education: There is need for consumers, investors, employees to become more aware of the social issues around them.

5. Developing Social standards: Companies cannot only be profit making entities but also need to look towards serving social needs for growth and existence, for this they need to fulfil some activities of social welfare

3. ‘Business is essentially a social institution and not merely a profit making activity’. Explain.

A business has the primary motive as profit maximisation. But business organisations are not pure profit making concerns. As they are created by society to fulfil requirement of goods. Every business utilities resources of society and human resources. So a business is also impacted by problems of society such as poverty and unemployment. Activities such as creating jobs and healthy working condition, paying taxes, preventing pollution and addressing complaints from customers are some of the examples of socially desirable practices that improve image of society. Here are some examples which show business as a social institution.

1. A business has to provide fair return to the shareholders or owners on the capital they invested and ensure safety of such an investment.

2. Provide meaningful opportunities for workers along with fair wage for the work.

3. Producing and supplying good quality goods along with the right quantity and customer service at reasonable price ensures that business is a social institution.

4. By paying tax on time a business respects the rules of society and hence makes it a social institution.

4. Why do the business enterprises need to adopt pollution control measures?

The need for adopting pollution control measures by a business enterprise is necessary for these reasons:

1. Pollutants present in the environment cause many complications like respiratory disorders, cancer, damage to kidneys, lungs. Reducing or keeping a check on the pollutants will ensure a healthy life on earth.

2. Organisations can implement pollution control device in its premises in order to stop damage that is caused by gases and solid wastes.

3. Using outdated production technology results in generation of excess amounts of waste, which can cause damage to environment and people, therefore new cleaner technology should be adopted.

4. An organisation having a proper pollution control measure at disposal is trusted as a socially responsible enterprise.

5. Effective pollution control mechanisms also reduces operating cost of a business while making environment clean.

5. What steps can an enterprise take to protect the environment from the dangers of pollution?

Following steps can protect environment from damage caused by pollution:

1. The top management needs to have a definite commitment to create, maintain and develop work culture for environmental protection.

2. Employees at all levels should work towards keeping environment clean

3. By conducting drama, workshops the business organisation needs to be spread awareness of pollution.

4. Businesses must respect and abide by the rules setup by government in order to combat pollution scenario.

6. Explain the various elements of business ethics?

Elements of business ethics are as follows:

1. Top level managers or CEO of a firm should diligently follow the ethical code of conduct and guide others in following them.

2. The code of conduct must be preserved in the form of written documents known as code which contains laws dealing with safety in workplace, health, quality etc.,

3. Suitable compliance mechanisms should be placed which ensures that decisions and the corresponding actions comply with the firm’s ethical standards.

4. Employee should be involved in all levels of ethics programmes as employees are the ones who implement the ethical policies.

5. The firm must monitor whether the ethics programmes comply with the ethical standards and measure the end results of ethics programme and check if any course of action should be taken.

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