Prof. Utham Murali. M.S ; M.B.A.

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• Being Socially Responsible means that people and organizations must behave ethically and with sensitivity toward social, cultural, economic and environmental issues.

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• Social responsibility is a duty of every individual has to perform so

as to maintain a balance between the economy and the ecosystems.

• Striving for social responsibility helps individuals, organizations and

governments have a positive impact on development, business and

society with a positive contribution to bottom-line results.

• It pertains not only to business organizations but also to everyone

whose any action impacts the environment.

• This responsibility can be passive, by avoiding engaging in socially

harmful acts, or active, by performing activities that directly

advance social goals.

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• Social responsibilities includes 4 dimension :

- Legal

- Ethical

- Economic

- Philanthropic

(discretionary)

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• Refers to obeying governmental laws and regulations

• civil law: - rights & duties of

individuals & org.• criminal law:- prohibits specific actions & imposes fines / imprisonment

as punishment for breaking the law

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• Behaviors and activities that

are expected or prohibited by

organizational members, the

community, and society (not

codified into law)

• Standards, norms, or

expectations that reflect the

concern of major

stakeholders.

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• How resources for the production of goods and services are distributed within the social system.

• Consumers always favor socially responsible companies or they most enamored with companies that maximize profits.

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• Business’s contributions

to society

• Strategic philanthropy

- Charitable trusts

- Microsoft companies

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DISCRETIONARY Responsibilities Be a good Corporate Citizen. Contribute resources to the community; improve quality of life.

ETHICAL Responsibilities Be ethical.Obligation to do what is right,

just and fair; Avoid harm.

LEGAL Responsibilities

Obey the Law Law is society’s codification of right and wrong;

Play by the rules

ECONOMIC Responsibilities

Be Profitable The foundation upon which all others rest

Carroll’s Model

The Pyramid of Social Responsibility

• Student social responsibility, known as SSR, is the responsibility of every student for his or her actions.

• It is morally binding everyone to act in such a way that the people around them are not adversely affected.

• SSR is based on an individual's ethics.• It may be impractical, especially in the modern

competitive world, where everyone works for their self-interest, but will succeed if we take decisions based on what will benefit a large number of people and respect everyone’s fundamental rights.

• As individuals we can make our small contributions to society by donating money to trustworthy, saving our resources by reducing our consumption, E.g. by switching off lights or computers when not in use.

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• Corporate social responsibility is nothing but how the business takes responsibility for social, economic and environmental impacts it may produce from its operation or products.

• Corporate social responsibility (CSR, also called corporate responsibility, corporate citizenship, and responsible business)

• Organization’s obligation to make decisions and take actions that will enhance the welfare and interests of society and organization.

• Being a good corporate citizen.• Organizations voluntarily taking further steps to improve

the quality of life for employees and their families as well as for the local community and society at large.

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• ISR is about an individual becoming responsible in his/her actions that have affect on communities outside his/her immediate circle.

• The immediate circle being family and friends.• There can be an argument about also including family

and friends, but it would be rather pertinent to include them as part of Individual Personal Responsibility.

• ISR expands on this by promoting a proactive stance towards positively influencing and affecting the people and environments outside your immediate circle.

• ISR is at the roots of CSR, because a corporate comprises of individuals and hence determines the social responsibility culture it creates. This is the intermingled relationship between CSR and ISR.

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• Social Opposition

• Social Obligation

• Social Response

• Social Contribution

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Businesses response to social responsibility tend to fall within four categories:•Social Opposition: View taken by business is that they have no obligation to the society in which they operate.•Social obligation: Companies believe that they have an obligation to obey the law. •Social response: Position taken by companies which believe that their social responsibilities are as dictated by law and will on selective basis go beyond the legal requirements. These units may volunteer to participate in limited socially responsible efforts, but not until they are convinced that the benefits outweigh the costs.•Social contribution: Position taken by Companies which believe that they have a deep obligation to serve the society.

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• Business enterprises are creatures of society and should respond to the demands of society.

• If the management does not react to changes in social demands, the society will either force them to do so through laws or will not permit the enterprise to survive.

• Therefore the long-term interests of business are best served when management assume social responsibilities.

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• The image of business organization are liked with the quality of its products and customer service and the extent to which it fulfills the expectations of owners, employees, consumers, government and the community at large.

• For long-term success it matters a great deal if the firm has a favorable image in the public mind.

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• Every business enterprise is a organ of society and its activities have impact on the social scene.

• Therefore, it is important for management to consider whether their policies and actions are likely to promote the public good, advances the basic values of society, and constitute to its stability, strength and harmony. 19

• Increasing concern for the social responsibility of management, it is now recognized that besides taking care of the financial interest of owners, managers of business firms must also take into account the interest of various other groups such as employees, consumers, the government and the community as a whole.

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• The primary responsibilities of management is to assure a fair and reasonable rate of return on capital and fair return on investment can be determined on the basis of difference in the risks of business in different fields of activity.

• With the growth of business the shareholders can also expect appreciation in the value of their capital.

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• Management responsibility towards employees relate to the fair wages and salaries, satisfactory work environment, labor management relations and employee welfare.

• Fair wages should be fixed in the light of labor productivity, the prevailing wage rates in the same or neighboring areas and relative importance of jobs.

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• Manager’s salaries and allowances are expected to be linked with their responsibility, initiative and skill.

• But the spread between minimum wages and highest salaries should be reasonable.

• Employees are expected to build up and maintain harmonious relationships between superior and subordinates.

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• In a competitive market, serving consumers is supposed to be a prime concern of management.

• But in reality perfect

competition does not prevail in all product markets. In the event of shortage of supply there is no automatic correction.

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• Consumer interests are thus protected to some extent with laws and pressure of organized consumer groups.

• Management should anticipate these developments, satisfy consumer needs and protect consumer interests.

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• Goods must be of appropriate standard and quality and be available in adequate quantities at reasonable prices.

• Management should avoid resorting to hoarding or creating artificial scarcity as well as false and misleading advertisements.

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• As a part of their social responsibility, management must conduct business affair in lawful manner, honestly pay all the taxes and dues, and should not corrupt public officials for selfish ends.

• Business activities must also confirm to the economic and social policies of the government.

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Wages and Salari

• The socially responsible role of management in relation to the community are expected to be revealed by its policies with respect to the

- employment of handicapped persons & weaker sections of the community.

- environmental protection- pollution control- setting up industries in

backward areas- providing relief to the

victims of natural calamities etc.

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Wages and Salari

> All Social responsibility, both individual and corporate, is voluntary.

> It is about going above and beyond what is called for by the law (legal responsibility).

> It involves an idea that it is better to be proactive toward a problem rather than reactive to a problem.

> Social responsibility means eliminating corrupt, irresponsible or unethical behavior that might bring harm to the community, its people, or the environment before the behavior happens.

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•Internet websites .