Question 1: Build up arguments for and against social responsibilities.
Answer: Arguments for Social Responsibility
Justification for existence and growth: It is a fact that a business prospers and sustains in the long run only when it serves some purpose to the society. Hence, it can be said that social responsibility is necessary for existence and growth of a business organization.
Long term interest of the firm: If the public image of a business firm gets tarnished, it becomes difficult for the firm to continue in the long run. All the stakeholders should view the business organization with positive perspective in order to ensure long term survival of the organization.
Avoidance of government regulation: Sometimes, the government may enact new laws if the business firms are seen not providing some social service. Thus, a commitment towards social responsibility is a good tool to avoid new rules and regulations being enacted.
Maintenance of society: Sometimes, people may resort to unlawful activities if a business organization is not seen to fulfill social obligations. This can create the problem of lack of harmony in the society. So, by committing to social responsibility; the business organization ensures maintenance of peace in the society.
Availability of resources with business: A business firm has valuable and financial resources. Hence, a business firm should utilize its resources for some social causes.
Converting problems into opportunity: Established business firms have a long history of turning various problems into opportunities. This is the reason; new products and new markets are created and profitably utilized. Business firm should take social problems as opportunities and should tackle those problems.
Violation of profit maximization objective: The main purpose of existence of a business firm is profit maximization and any activity related to social responsibility interferes and violates the objective of profit maximization.
Burden on consumers: Many activities related to social responsibility involve very high cost and the cost is finally transferred to the consumers. Thus, social responsibility creates a burden on the consumers. Many products and services become costlier because of the costs involved in social responsibility.
Lack of social skills: A business organization’s competency lies in creating value from the business. The business organization does not have the necessary skills to handle social responsibility. Hence, business firm should be left to focus on value creation.
Lack of broad public support: In general; public does not appreciate a business organization’s involvement in social causes. Due to this, corporate social responsibility does not have broad public support.
Question 2: Discuss the forces which are responsible for increasing concern of business enterprises toward social responsibility.
Answer: The forces which are responsible for increasing concern of business enterprises toward social responsibility:
Question 3: ‘Business is essentially a social institution and not merely a profit making activity’. Explain.
Answer: A business can be defined as an activity which is involved in trade of goods or services. A business activity is done with the sole purpose of profit maximization. However, some not-for-profit organizations also exist and conduct business. Let us analyze whether a business is just a profit making activity or more than that.
Profit making is an essential aspect of business because a loss-making business firm cannot survive in the long run. It has to earn profit in order to survive and grow. Profit is necessary for continuing various functions of a business organization. For example; a business needs to invest in people and other resources from time to time. This investment would not be possible if the business is incurring losses. A business also needs to come with new products or services in order to cater to the changed preferences. New product development is also a resource intensive task and profit is necessary for resource mobilization. Thus, it can be said that profit maximization is a prime goal of any business organization.
But we need to remember the fact that a business does not function in vacuum. A business needs consumers to buy its products or services. It needs some suppliers to source raw materials and equipments. It needs to maintain a good relationship with its suppliers and consumers so that it can smoothly conduct business.
If a business organization sours its relationship with either the supplier or the consumer, it cannot sustain for more than a couple of seasons. So, it needs to obey the laws of the land to maintain respect in the eyes of suppliers and consumers.
In my neighbourhood, a simple rustic fellow from Himachal Pradesh sells momos. His mobile shop is made up of a gas stove, some steamers and a wooden board; all of them fitted on the rear carrier of his bicycle. Looking at the big crowd he attracts, I can easily tell the great taste of momos he sells. No other momos seller in that area can match the crowd at his stall. To top it all, the guy behaves nicely with every customer. This guy is able to do brisk business because he is serving tasty food at affordable price and his very good customer relationship skills. Had this guy been arrogant or ill-behaved, he would not be able to do as brisk business as he is doing right now. This example shows that a business needs to be an integral part of the society in which it functions.
Hence, it can be said that a business is essentially a social institution and not merely a profit making activity.
Question 4: Why do the enterprises need to adopt pollution control measures?
Answer: A business organization takes and utilizes various natural and man-made resources from the environment. We know that pollution destroys the environment and hence it is necessary to protect the environment. Like every other member of the society, a business organization too needs to take adequate pollution control measures because pollution control is a collective responsibility. Some of the important reasons for adopting pollution control measures are as follows:
Question 5: What steps can an enterprise take to protect the environment from the dangers of pollution?
Answer: To protect the environment from the dangers of pollution, a business enterprise can take following steps:
Question 6: Explain the various elements of business ethics.
Answer: The various elements of business ethics are as follows:
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