Social Responsibilities of Business and Business Ethics

• Concept of Social Responsibility

  • Meaning: Obligation to pursue goals beneficial to society
  • Distinction from Legal Responsibility: Going beyond what is legally mandated
  • Why businesses need it:
    • Self-interest
    • Creation of public image
    • Avoidance of government regulation
    • Availability of resources
    • Better environment for business

• Responsibility towards Different Interest Groups

  • Towards Shareholders / Owners:
    • Fair return on investment
    • Safety of capital
    • Regular financial information
  • Towards Workers / Employees:
    • Fair wages and salaries
    • Safe working conditions
    • Opportunities for personal growth
  • Towards Consumers:
    • Quality goods at fair prices
    • Regular supply
    • Avoidance of unfair trade practices
  • Towards Government:
    • Payment of taxes honestly
    • Compliance with laws and regulations
  • Towards Community / Society:
    • Protection of environment
    • Generation of employment
    • Contribution to community development

• Business and Environmental Protection

  • Meaning: Preserving the environment from degradation
  • Causes of Pollution:
    • Air pollution (smoke, chemicals)
    • Water pollution (industrial waste)
    • Land pollution (toxic waste dumping)
    • Noise pollution (heavy machinery)
  • Role of Business in Environmental Protection:
    • Commitment by top management
    • Employee participation
    • Clear policies and procedures
    • Assessment of pollution control projects
    • Compliance with government laws

• Business Ethics

  • Meaning: Standards of behavior or moral principles guiding business
  • Elements of Business Ethics:
    • Top management commitment
    • Publication of a Code of Conduct
    • Establishment of compliance mechanisms
    • Measuring results (auditing)