SOCIAL RESPONSIBILITY OF BUSINESS

Every business enterprise is an integral part of the society.

It uses the scarce resources of the society to continue and grow.

Thus no activity of business should be injurious to the interests of the society.

Social Responsibility of businessMeaning Obligation of business enterprises to

adopt policies and plans of actions that are desirable in terms of the

Expectation Values Interest of the society.

It ensures that the interests of different groups of the public are not adversely affected by the decisions and policies of the business

Social Responsibilities of Business towards Different Stake holders

Responsibility towards the shareholders or owners.

Responsibility towards the Employees. Responsibility towards the Consumers. Responsibility towards the Suppliers. Responsibility towards the Financiers. Responsibility towards the Government. Responsibility towards the Community.

Responsibility towards the shareholders or owners.

Fair return on their investment. Appreciation in the value of share. Ensure better performance Full disclosure of information Organizing AGM Voting rights

Responsibility towards the Employees Ensure a fair wage or salary Working Hours Good and Safety working condition Medical Facilities Housing Facilities Canteen Facilities Leave facilities Retirement benefits Educational allowances for children Reasonable amount of bonus Provision for participation in management

Responsibility towards the Consumers Quality of products / services Reasonable Price. Adulteration should be avoided. Packaging and labeling. Advertisements should not mislead the

customers. After sale service. Customers grievances should be redressed

immediately.

Responsibility towards the Government A business enterprise must follow the

guidelines of the government while setting up the business.

It conduct the business in lawful manner. It should disclose the required information. Taxes must be paid honestly and on time. It should not indulge in any corrupt

practices or unlawful activities.

Responsibility towards the Community Promoting social and cultural values. Generating employment opportunities Contribution towards the upliftment of

weaker sections. Protecting the physical and ecological

environment of the society. Contribution to the community

development programmes like public health care, sports, cultural programmes.

Responsibility towards the SuppliersPayment should be made promptly.

Responsibility towards the FinanciersPrompt payment of interest and repayment of principal amount.

Business Ethics

Meaning of Ethics ‘Ethics’ originated from the Greek word ‘ethos’ -

Culture – prevalent behaviour in the society. Character, conduct and activities of the people

based on moral principles / values. It is concerned with what is right and what is

wrong in human behaviour on the basis of standard behaviour or conduct accepted by the society.

Honesty, truthfulness, compassion, sympathy, feeling of brotherhood etc.

Ethics is about voluntarily conforming to what is good/acceptable/desirable behaviour without the force of any legal/social obligation. Choosing to do some thing that is not mandated by the law or not doing some thing that is permitted by the law but may cause harm to some one.

Ethics can result from Religion Philosophy Family teachings Social value

Business Ethics Business ethics are the moral principles,

which guide the behaviour of businessmen or business activities in relation to the society.

It provides certain code of conduct to carry on the business in a morally justified manner.

Doing what's right in relationship with stakeholders.

Normal principles and standards that define right and wrong behavior in the world of business.

What is right and wrong is determined by public interest groups/ business organizations.

Broad Areas of Business Ethics Managerial Mischief

Illegal, unethical, or questionable practices of individual managers or organizations.

Moral MazesEthical problems that managers must deal with on a daily basis

Business EthicsAvoiding Malpractices

Black-marketing, Artificial high pricing, Adulteration, Cheating in weights and measures, Secret kick backs to administrators and

politicians Selling of duplicate and harmful products, Hoarding, etc.

Improving Customers' Confidence Being honest and truthful about quality and

quantity of goods, Charging fair prices.

Safeguarding Consumers' Rights right to health and safety, right to be informed, right to choose, right to be heard, right to redress, etc.

Protecting the rights - Employees, Shareholders, Suppliers, Financiers, competitors.Encouraging Healthy Competition Paying taxes and discharging other obligations promptly.

Theories of Ethics

Utilitarian TheoryPlans and actions of the business should be evaluated by their consequences.

Basic Rights TheoryFunctions / activities of the business must not violate basic rights.

Theory of JusticeBusiness decisions must guided by fairness, equity and impartiality to ensure justice.

Elements of Business Ethics High Business Value Ethical evaluation of Management Decision Adoption of fair means to achieve objectives Discharge Social Responsibilities Keeping Promise Upholding Cultural & Religious value of

society Ethical Co operation