CHAPTER 6
SOCIAL RESPONSIBILITIES OF BUSINESS AND
BUSINESS ETHICS
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
•
explain the concept of social responsibility;
•
discuss the need for social responsibility;
•
identify the social responsibility towards different interest groups;
•
analyse the relationship between business and environmental
protection; and
•
define the concept of business ethics and state the elements of
business ethics.
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SOCIAL RESPONSIBILITIES OF BUSINESS AND BUSINESS ETHICS
6.1 INTRODUCTION
A business enterprise should do
business and earn money in ways that
fulfill the expectations of the society.
Every individual living in society has
certain obligations towards society. He
has to respect social values and norms
of behaviour. A business enterprise is
permitted by society to carry on
industrial or commercial activities and
thereby earn profits. But it is obligatory
on part of the business enterprise not
to do anything, that is undesirable from
society’s point of view. Manufacture
and sale of adulterated goods, making
deceptive advertisements, not paying
taxes which are due, polluting the
environment and exploiting workers
are some examples of socially
undesirable practices which may
increase the profit of enterprises but
which have adverse effect on society at
large. On the other hand, supplying
good quality goods, creating healthy
working conditions, honestly paying
taxes prevention/installing pollution
devices in the factory, and sincerely
attending to customer complaints are
examples of socially desirable practices
which improve the image of enterprises
and also make them profitable. In fact,
it is through socially responsible and
ethically upright behaviour that
business enterprises can get durable
success.
6.2 CONCEPT OF SOCIAL RESPONSIBILITY
Social responsibility of business refers
to its obligation to take those decisions
and perform those actions which are
desirable in terms of the objectives and
values of our society. The assumption
of social responsibilitie