SOCIAL RESPONSIBILITY OF BUSINESS & BUSINESS ETHICS

Social responsibilities of a business require to all the activities of a business which it undertakes to fulfil the obligations of the society. These are the activities & decisions which are taken for the betterment of the society and not to earn profit, social responsibilities helps the business to grow as it enhances the good will of business.

Social responsibilities v/s Legal responsibilities:

The legal responsibilities as a business is compulsory because, non-compliance with the law can result punishment while social responsibilities involves an element as voluntary action on the point as the business cause benefit of the society. Sometimes legal responsibilities overlap the social responsibilities.

Arguments for social responsibilities:

Business should fertile social responsibilities due to following reasons-

Long term interest of the fium:

A fium can profit higher profits is it fulfils the social responsibilities. Business is the part of society itself. So, in long run what is good for business is good for society. The workers, consumers, shareholders and government officials will withdraw themselves from business if they doubt it is not serving best interest.

 

Avoidance of government regulation:

In many cases social responsibility overlaps legal responsibility for exp- deposing the waste material, adulteration, welfare as the worker etc. Therefore if a businessman wants to avoid the problem of government intelligence, it should fulfil social responsibility.

Justification for existence & growth:

Business exists for providing goods and services to the society. Although profit motive is the main objective of business, it cannot be achieved without the service to the society. A business will grow when all the stakeholders, employees, customers, government, raw material suppliers etc are happy. Thus fulfilling social responsibility is the main reason for existence and growth of business.

Converting problems into opportunity:

Fulfilling social responsibilities is no longer a problem, a skilful businessman converts risky situation into profitable deals, a businessman can fulfil social responsibilities and be popular in the society.

Better environment for doing business:

If a business takes care of social responsibilities then it gets a good environment to operate, it will get high quality raw material, safe environment, non-adulterated products which beneficial for its survival.

Holding business responsible for social problems:

Business is accused for environmental pollution, waste workplace, corruption etc. Therefore it is the moral obligation of business to solve these problems.

Maintenance of the society:

Availability of raw material resources of business

Arguments against social responsibilities:

Violation of profit maximization motive:

Business exists only for profit maximization any tail of social responsibility is against this objective. A business should concentrate on increasing efficiency and reducing the cost rather than social responsibility.

Burden of consumers:

It is argued that whenever a business sets up costly pollution control programme, it shifts the burden to the consumer. Business increases the price of the product so it’s  to tax the consumer in the name of social responsibilities.

Lack of social skill:

Businessman lacks the training required for solving social problem. These problems should be solved by specialists sometimes businessman gives           to unworthy institutes. So, they don’t have the necessary understanding.

Lack of public support:

According to these arguments general public does not like business to involve in social programmes. Public just want quality goods at reasonable price.

Reality of Social Responsibility:

Development of professional managerial class:

Professional management education in university and business school has created a separate class of professional managers. These managers are pass out from business schools who know that to earn long term profits societies interest has to be valued. So, operation between ownership & management has made social responsibilities a necessity.

 

Threat of public regulation:

In reality most of the business organization fulfils social responsibilities because of the threat of        action and public regulation. They fulfil all social responsibilities to satisfy the public & government.

Pressure of labour movement:

Over the years, labours has become more educated and organized they have become more powerful this has forced the business to pay importance to the welfare to the workers and not follow the policy of hire-fire.

Consumer conscious:

The next reason for social responsibilities is the well-educated consumers. The new law is ‘Let the seller be aware’. The media has made the social responsibilities a necessity for the business.

Relationship between social interest & business interest:

Business enterprises have realized that interest of society & business are mutually complimentary. In long run a business will profit earn only when it is fulfilling the social responsibilities the long term benefit of business lies in serving the society.

Development of social standard:

In the recent past the standard of living has become higher media and scientific development has made new discoveries which have made social responsibilities a necessity, no business can go against the society. Therefore, social standards have made social responsibilities very very  important.

Social responsibility towards various interest groups:

Responsibility towards the consumers:

Business has the biggest responsibility towards consumers; it should take proper precautions against adulteration, poor quality, lack of desired service etc.

It is important for a business to provide right information to the customer.

Responsibility towards the workers:

It is the responsibility of a business to provide good working condition to the worker. It should respect the democratic rights of the worker, they should be ensured fare wages and fare deal from the management.

Responsibility towards the shareholder:

A businessman should provide safety to the investments made by shareholders, they should provide the shareholders with regular, accurate and full information about the working of a business.

Responsibility towards government & community:

Business should respect the laws of the country; they should pay taxes on time. As responsible citizen they should avoid pollutions & dirty working conditions.

 

Kinds of social responsibilities:

Economic responsibility:

Business enterprise is economic entity. Its no. 1 responsibility is to provide goods & services which society wants with full utilization of resources. This will result in profit for business also.

Legal responsibility:

It is the responsibility of business to follow all the rules & regulation of society. Business will be penalized if they don’t fulfil legal responsibilities.

Ethical responsibility:

These include voluntary actions on a part as the business should perform all the activities honestly and should be loyal to its homeland.

Discretionary responsibility: Unique, creative.