Quick Revision Notes

Class 11 Business Studies

Definition: Social responsibility of business refers to its obligation to take decisions and perform actions that are desirable in terms of the objectives and values of our society.
Why Business Needs Social Responsibility:
- Self-interest
- Creation of better public image
- Avoidance of government regulation
- Maintenance of society and availability of resources
- Holding business responsible for social problems

A business enterprise interacts with various groups. Its social responsibilities towards them are:

Towards Shareholders / Owners:
- Provide a fair return on investment (dividend).
- Ensure safety of capital.
- Provide regular, accurate, and transparent financial information.
Towards Workers / Employees:
- Fair wages and salaries.
- Safe, clean, and healthy working conditions.
- Opportunities for personal growth and training.
- Social security benefits (PF, gratuity, medical aid).
Towards Consumers:
- Supply quality goods and services at reasonable prices.
- Regular and adequate supply of products.
- Avoidance of unfair trade practices (adulteration, hoarding, misleading advertisements).
- Prompt redressal of consumer grievances.
Towards Government:
- Payment of taxes and duties honestly and regularly.
- Compliance with laws, rules, and regulations.
- Not indulging in corrupt practices.
Towards Community / Society:
- Protection of the environment (pollution control).
- Generation of employment opportunities.
- Contribution to community development (health, education, infrastructure).
- Preservation of cultural values.

Definition of Pollution: The injection of harmful substances into the environment that causes damage to natural resources, human health, and ecological balance.
Major Types of Pollution:
- Air Pollution: Caused by emissions from industries, vehicles, and burning of fossil fuels (leads to global warming, ozone depletion).
- Water Pollution: Caused by dumping industrial waste, chemicals, and sewage into rivers and oceans.
- Land (Soil) Pollution: Caused by dumping toxic wastes, garbage, and excessive use of fertilizers/pesticides.
- Noise Pollution: Caused by factory machinery, vehicles, and loudspeakers (causes hearing impairment, stress).
Role of Business in Environmental Protection:
- Top management commitment to create an environmental-friendly culture.
- Commitment from all employees to protect the environment.
- Developing clear-cut policies and procedures for waste disposal and resource conservation.
- Complying with laws and regulations enacted by the government (e.g., Pollution Control Board guidelines).
- Conducting periodic environmental audits and assessments.

Meaning: Business ethics refers to the socially determined moral principles and values that govern the behavior of business persons and enterprises. It defines what is 'right' and 'wrong' in business.
Key Elements of Business Ethics:
1. Top Management Commitment: Leaders must set an example and enforce ethical standards.
2. Publication of a 'Code': A formal, written code of ethics defining the enterprise's standards of integrity and values.
3. Compliance Mechanism: A system to monitor and ensure adherence to ethical standards.
4. Employee Involvement: Involving all levels of employees in framing and implementing ethical practices.
5. Measuring Results: Auditing and evaluating the ethical performance of the business regularly.

CSR (Corporate Social Responsibility): The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce, local community, and society at large.
Stakeholders: Individuals or groups who affect or are affected by the actions of a business (Owners, Employees, Consumers, Government, Society).
Code of Ethics: A written document outlining the mission, values, and principles of a business and how professionals are expected to approach problems.