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Class 11 Business Studies Chapter 6 Social Responsibilities of Business & Business Ethics
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Social Responsibilities of Business & Business Ethics
Chapter: 6
VERY SHORT TYPE QUESTIONS ANSWERS (1 MARK EACH)
A. Multiple Choice Question:
1. Social Responsibility is
(a) Same as legal Responsibilities.
(b) Broader than legal responsibility.
(c) Narrower than legal responsibilities.
(d) None of them.
Ans: (b) Broader than legal responsibility.
2. If business is to operate in a society which is full or diverse and complicated problems it may have —
(a) Little chance of Success.
(b) Great chance of success.
(c) Little chance of failure.
(d) No relation with success as failure.
Ans: (d) No relation with success as failure.
3. Business people have the skills to solve
(a) All social problems.
(b) Some social problems.
(c) No social problems.
(d) All economic problems.
Ans: (b) Some social problems.
4. That an enterprise must behave as a good citizen is an example of its responsibility
(a) Owners.
(b) Workers.
(c) Consumers.
(d) Community.
Ans: (d) Community.
5. Environmental protection can best be done by the effort of
(a) Business people.
(b) Government.
(c) Scientistspeople.
(d) All the people.
Ans: (d) All the people.
6. Carbon monoxide emitted by automobiles directly contributes to
(a) Water pollution.
(b) Air pollution.
(c) Land pollution.
(d) All the people.
7. Which of the following can explain the need for pollution control?
(a) Cost savings.
(b) Reduced Risks of liability.
(c) Reduction of health hazard.
(d) All of them.
Ans: (c) Reduction of health hazard.
8. Which of the following is capable of doings maximum good to society?
(a) Business success.
(b) Laws and Regulations.
(c) Ethics.
(d) Professional Management.
Ans: (c) Ethics.
9. Ethics is important for:
(a) Top management.
(b) Middle level managers.
(c) Non managerial employes.
(d) All of them.
Ans: (d) All of them.
10. Which of the following alone can ensure effective ethics programme in a business enterprise.
(a) Publication of a code.
(b) Involvement of employees.
(c) Establishment of compliance.
(d) None of them.
Ans: (b) Involvement of employees.
Short Answer Questions
1. What do you understand by Social Responsibility of business? How is it different from legal responsibility?
Ans: Social Responsibility of business implies those activities and duties which a business house is to do for the betterment of the social. It is the obligation of business to take decision and actions which protect promote and progress the welfare of the society as a whole.
Difference between social Responsibility and legal Responsibility:
(a) Social Responsibility is used in broader sense than legal responsibility.
(b) Legal responsibility can be fulfilled by maintaining legal formalities, where social responsibilities can be fulfilled by discharging all possible social obligation of all parties concerned with society.
(c) Legal responsibility is not voluntary, it is compulsory, But, social responsibility is voluntary.
2. Which is environment? What is environmental pollution?
Ans: Environment is a situation or condition which is created by the impact of various internal and external factors surrounding the business or any place.
Human activity generates a tremendous amount of waste materials. These and discbargod in various components of the environmental in which they bring about undesirable changes. The phenomenon is termed as Environmental pollution which has been defined as an undesirable change in physical chemical or biological characteristics of ait, water as land that will be or may be harmful to human and other life, industrial process, living conditions and cultural assets or cause wastage of our raw material resources.
3. What is business ethics? Mention the basic elements of business Ethics?
Ans: Ethics is the discipline dealing with what is good and bad and with moral duty and obligation. Ethics is that branch of philosophy which is the systematic study of selective choice of the standards of right or wrong by which it may ultimately be directed. Business ethics are those principles, practices and philosophies that are concerned with moral judgements and good conduct as they are applicable to business situations.
Following are the elements of business ethics:
(i) Top management commitment.
(ii) Publication of a code.
(iii) Establishment of compliance mechanisms.
(iv) Involving employees at all levels.
(v) Measuring results.
4. Briefly explain:
(a) Air Pollution.
(b) Water pollution. and
(c) Land pollution.
Ans: (a) Air Pollution: Air pollution consists of a complex mixture of a number of gases, water vapour and a variety of five particulate material. The gaseous mantle which surrounds the globe is constituted by about 5.15×10 metric tons of gas which exerts a pressure of about 4 kg per sq. a.m. on carth’s crust. Most of these gases are compressed in the lowermost layer. Air pollution is created by smoke, chemicals from manufacturing plants and carbon monoxide emitted by automobiles.
(b) Water pollution: Generally water is polluted from chemical and waste dumping. Various manufacturing units have been dumping their waste into rivers, Streams and lakes. Water pollution is harmful for both human and animals, which led death of several animals and human beings.
(c) Land Pollution: Land pollution is created due to dumping of toxic wastes on land. This type of practices damages the quality of land making. Ultimate, the polluted land will be unfit for agriculture or plantation. Polluted land is a big problem for the entire economy of a country as because it can decrease the level of production of agriculture sector.
Long Answer Questions
5. What are the major areas of social responsibility of business.
Ans: Following are the major areas of social responsibility of business:
(i) Economic responsibility.
(ii) Legal responsibility.
(iii) Ethical responsibility.
(iv) Discretionary responsibility.
6. Build up agreements for and again social responsibilities.
Ans: Agreement for social responsibility:
(i) Due to the changed expectation the public needs have changed. Business is meant for the public and consequently respond to the needs of the public.
(ii) the creation of a better social environment benefits both the society and business. Society is benefited through better neighborhood and employment opportunities. Business gains from better community.
(iii) Business being a major source of economic power of a nation, should be accompanied by equal amount of responsibility.
(iv) Social involvement of business should also be in the interest of its stake holders-
(v) Involvement of business fro social upliftment always discourages additions government regulation and intervention. As a result it encourages greater freedom and more flexibility in decision making for business
(vi) Business should try to solve the acute and chronic problems of the society that other institutions have not been able to solve.
(vii) It is better to solve social problems through business involvement rather than to cure them.
(viii) Social involvement creates a favourable public image which can create and attract customers, employees and investors.
Agreement against social Responsibilities:
(i) Social involvement of business will increase the cost of business The cost of social programmes would have to be added to the price of the product which will be adverse to the society.
(ii) The primary task of business is to maximise profit by focussing strictly on economic activities. Social involvement could reduce economic efficiency.
(iii) Business people lacks the social skills to deal with the problems of the society Their skills and experiences are with the economic matters, which may not be pertinent to social problems.
(iv) Business have enough power, and additional social involvement would further increase its power and influence in the society.
(V) There is no complete support for involvement in social actions and consequently this disagreement among groups of the society with different view points with cause friction in the society.
(vi) There is lack of accountability of business as society and unless accountability is established, business should not get involved in social action.
7. Discuss the Forces which are responsible for increasing concern of business enterprises toward social responsibility.
Aas: Following factors or forces are responsible for increasing social responsibility:
(i) Public Regulation: Due to emerging of various Public Regulations, now all business houses have to maintain their necessary responsibilities to the society. It is become primary duty of every business to follow the related public regulations.
(ii) Pressure of labour movement: Labour movement can make many things compulsory for the business, which is a part of social responsibility. Infact, labour movement give pressure to impose various labour legislatures and law for labour welfare, which is also a part of social responsibility.
(iii) Consumer consciousness: Now-a-days, Consumers are very much conscious toward the social responsibility, whether the business houses discharge the minimum duties towards society or not. Moreover, Now-a-days consumers are qualified and aware of various legal action, like consumer Protection Act 1986, Right to information Act etc. by virtue of which they can give pressure on business community to discharge social responsibility properly.
(iv) Development of social standard fro business: Every business is to increase the standard of society. It is possible only if the business can contribute something to the society. Every business should have some social contribution and benefits.
(v) Development of business education: At present, business education are gradually increasing amongst the people, which make most of the people conscious and also increase the knowledge of business amongst the people.
(vi) Relationship between social interest and business interest: No society can develop without developing society and business can develop without developing the society. There is a inter relationship between social interest and business interest, Business produce and supply goods for the benefit of the society.
(vii) Development of professional managerial class: Presently various professional managerial courses are developed, by which various quality professional managers are emerged. So, in presence of quality and professional management. Social responsibility are considered seriously, by every business houses.
8. Business is essentially a social Institution and not merely a profit making activity. Explain.
Ans: Society is the home of business. The business enterprises cannot effort to work in isolation from the society. A business today is a vital and an important social and economic institution called upon to assume larger responsibilities. Business has a natural and intimate link in the viability of society in the stability and growth of its economy, in its orderly functioning under the rule of laws. In the system of the society a business enterprise cannot remain a mere instrument for earning profits out of is activities. Hence, it is the social justice that the business must not be guided by profit motive alone. So, social welfare and business management together. There cannot be a prosperous business in the real sense ignoring the motive of social welfare.
On the other hand, one must have resources to finance social welfare programmes. Moreover, the concept of social economic growth with equity demand that productive organisations should be built-up not for today or for tomorrow but for performance and continuity so that it can stand the test of time. In this era of discontinuity the public sector businesses to develop greater social conscience. Social concern, social awareness and social responsibility relation to its actions. Modern Business is regarded as an integral part of a nations’s economic and social system. Hence, it must have society’s approval to function successfully. In today’s world society is expecting much more from business than in the past. Modern business must assume responsibility for public good. The management of business should adopt a reasonable and responsible attitude towards factors of business like price, labour, capital, supply, quality etc. So as to be in conformity with the requirements of public policy. The business on the contrary, must also operate it profit because earning profit indicate the worthwhile ness after enterprise in the use of its resources.
9. Why do the enterprises need to adopt pollution control measures?
Ans: Because of the following reasons, the enterprises need to adopt pollution control measures:
(i) Reduction of health hazards: Due to environmental pollution various diseases like cancer, heart attacks and lung complications are emerged. So, every enterprise should control the pollution.
(ii) Reduced risk and liability: Due to affect by the toxicity of gaseous, liquid and solid wastes enterprise is to pay compensation. So, every enterprise is to install pollution control devices in its promises for reducing such liabilities.
(iii) Cost savings: If the Enterprise uses proper quality technology, thereby it can reduce wastes, cost and also minimise pollution, which ultimately can save cost.
(iv) Improved public image: By maintaining environmental quality, the business houses can increase good public images, so, public regulation can be obtained by the business through minimizing pollution.
Other social benefits: In addition to the above reason, there are some other reasons such clearer visibility, cleaner buildings, better quality of life, and the availability of natural product in a purer form, for Dunia it is needed to control the pollution by enterprises.
10. What steps can an enterprise take to protect the environment from the dangers of pollution.
Ans: Generally the following steps can he taken by the enterprise to protect the environment form the dangers of pollution :
(i) The enterprise can take step to crate work culture fro environmenta protection and pollution prevention.
(ii) Commitment should be shared by all employees throughout the enterprise. The should be divided amongst all division, section, department.
(iii) Formulating clear cut policies and programmes for purchasing raw material, implementing technology, treatment of wastes etc. for controlling pollution.
(iv) Enterprise should maintain all rules and regulations enacted by the Government for prevention of pollution.
(v) Enterprise should participate in various government programmes taken for controlling pollution or clearing up of polluted rivers, plantations of trees etc.
(vi) Frequent assessment of cost benefit analysis of pollution control programmes, whether these programmes are implemented for environmental protection or not.
(vii) Arranging educational workshops and training materials to share technical information and experience with various business parties such as suppliers, dealers, customers to involve actively in pollution control programmes.
11. Explain the various elements of business ethics.
Ans: Following are the basic elements of business others:
(i) Commitment of Top management: Without commitment of top management, ethic can be implemented in practice of business. Top management has sufficient power to improve the behaviour and ethical aspect of the organisation toward a satisfactory level.
(ii) Code of Conduct: The enterprise is to publish written code of conduct for the entire organisation, this written code of the enterprise provides honesty, adherence to laws, product safely and quality health and safety in the workplace, conflict of interest, employment practice, marketing practice etc.
(iii) Compliance mechanisms: Enterprise should ensure that the proper mechanisms for actual decisions and actions comply with the business, ethinal standards have been established. Such as paying attention to values and ethics in recruiting and hiring, emphasizing corporate ethics in training, auditing performance regularly to analyse the degree of compliance systems which help employees report incidents of unethical behaviours.
(iv) Involvement of employees at all level: Involvement of employees at all level is immersely important to maintain ethical aspect. Because. Ethics are to implemented by employees. So, without their involvement, it is very much impossible to establish ethical aspect in business practices.
(v) Measuring result: Measuring the result of different activities are very much essential for ethics. The top management should estimate the result for further course of action.
ADDITIONAL QUESTIONS & ANSWERS
1. What are the social responsibilities of business?
Ans: The main social responsibilities or obligation of the business can be studied as follows:
(a) Availability of goods: The business should ensure the supply of goods and services to meet the requirement of the society. The business should ultimate the total demand for various commodities and adjust the production accordingly.
(b) Supply of quality goods and services: The supply of quality goods and services to the consumers at reasonable prices is the responsibility of the business. The businessmen should aim at consumers satisfaction. The supply of adulterated goods, poor in quality unusable or harmful to health will be against business ethics. It is the duty of the businessman to study the wants and needs of consumers and provide them with quality goods at reasonable price.
(c) Co-operation with the government: Business should Co- operate with the government in helping to achieve the objective of socialistic pattern of society. The government of India has devised the roles both for public and private sectors. The government has fixed priorities for the execution of the major policies for the growth and development of the nation. But it is not uncommon for the Indian businessman to adopt tactics and strategies that go counter to the government polities. The businessman also try to evade various taxes. Hence the business community should adopt a positive approach towards the politics of the government and should help it in solving national problems.
(d) Creation of more employment: The business can help us society by creating more and more job opportunities. The expansion of business not only help in employing more persons in factory but it has a multiple effect. Persons are required at various levels in the channels of distributions from the producers to consumers. The business community should plough back its profit for further expansion of business activities which will ultimately create new job opportunities.
(e) Utilisation of National Resources Properly: The business should scare resources to the best possible us. Wastage of anything will not only loss of the enterprise but it will be a national loss. The business is tree to damage or couen discriminate depletion of natural resources. The one of improved technological methods for the production of goods can be helpful in raising production and reducing costs.
2. What are the responsibilities of business towards shareholders?
Ans: The responsibilities of the business towards its shareholders may be explained as below:
(a) Fair return on investment: The shareholders expect to declare a reasonable dividend on the money contributed by them by investing in their shares. Therefore the organisation must fulfill the expectations of the shareholders who have given them money for execution of their projects.
(b) Proper use of money: The money contributed by shareholders should be utilised properly in productive purposes which yield large profits.
(c) Research and development: The business organisation should undertake research and developmental programmes which will enable it to face competition and survive in the market.
(d) Proper conduct of meeting: The business organisation should conduct the meetings of the shareholders as per company law.
(e) Correct information: Every year the business organisation should supply an audited copy of its trading. Profit & loss account, balance sheet, reports of auditors, directors etc. to every shareholder. Shareholders should be give correct information regarding future plans and programmes of the company.
(f) Fair practices on stock Exchanges: The Directors of the business organisation should not try to weaken public confidence by indulging in unfair practices on the stock exchange.
(g) Expansion: The business organisation should go in for expansion and diversification of business activities so as to maximin the return on shareholder’s investment.
(h) Shareholder’s participation: Bonus share should be issued to the shareholder’s in order to encourage participation in the administration of the organisation.
3. Mention the responsibilities of business towards its employees.
Ans: The following are the responsibilities of business towards its employees:
(a) To provide proper working condition in respect of sanitation, lighting, ventilation, recreation place, safety and security of service etc.
(b) To pay fair wages and salaries keeping in view the cost of living, productivity of labour,contribution in prosperity of business etc.
(c) To provide monetary incentive in the form of bonus, overtime wages, medical and travelling allowances from time to time, So that employees are motivated to work hard for the betterment of the business.
(d) To provide welfare facilities like housing social security, education, training, sports etc.
(e) To protect trade union rights of workers including the right of participation in management, etc.
4. Mention the responsibilities of business towards its customers.
Aus: The responsibilities of business towards customer have assumed great importance because every business has to depend upon the customers.
The following are responsibilities of business towards its customers:
(a) To provide goods and services which can satisfy the needs and desires of different classes of customers
(b) To provide standard quality goods which will give maximum satisfaction to the customers.
(c) To ensure regular and adequate supply of goods specially during the periods of shortage.
(d) To avoid unfair trade practices like adulteration, hoarding, black- marketing, under-weighting, false or deceptive advertising etc.
(e) To charge fair and reasonable prices and to avoid charging artificial higher prices.
(f) To enser a fairly wide distribution of products among all sections of customer.
(g) To provide comect information about the products regarding its services, unes, quality, prices etc.
(h) To meet the complaints of the customer properly and promptly.
(i) To arrange for providing after sales services.
(j) To avoid exploitation of consumers by creating artificial shortage of commodities and charging artificial higher prices.
5. What are the responsibilities of business towards Government?
Ans: The responsibilities of business towards Government may be mentioned as follows:
(a) To pay taxes and dues to the government honestly, fully and prompt in time.
(b) To abide by the business laws in their true spirit.
(c) To Co-operate with the government in solving national problems like unemployment, poverty, concentration of economic power, illiteracy etc.
(d) To assist the government in crisis periods like floods drought, famine, earthquake and other natural calamities.
(e) To keep away form such unlawful activities leading to corruption such as bribing public officials to get undue for was from them.
(f) To help and Co-operate with the government in formulation of constructive policies for the betterment of business environment.
6. What is Business Ethics?
Ans: Business decisions which effect the lives of human beings connected with business in one way or another way are considered as business ethics. Ethics is a branch of social sciences which deals with concepts
such as right and wrong, good and bad, fair and unfair, just and unjust, legal and illegal, moral or immoral in respect of human actions. It is a code of conduct which guides human actions and activities. In the words
of wheeler, “Business ethics is an art or science of maintaining harmonious relationship with society, its various groups and institutions as well as recognising the morale responsibility for the rightness or wrongness of business conduct.”
7. Explain the importance of Business Ethics.
Ans: The need and importance of business ethics can be well understood from the following points:
(a) Protection of consumers right: Consumers play a vital rote in the market. In essence business is meant for the Satisfaction of consumers. But in practice they are neglected by the businessman. Hence business ethics can be used for the protection of consumers rights and protect them from the malpractices like adulteration unfair trade practices etc.
(b) Social responsibilities: Social responsibilities of the business can be excented by the application of business ethics.
(c) Safeguarding the interest of Industry: Business ethics are necessary to safeguard the interest of business and industry. Large scale business orgainations try to dominate the small scale industries. Hence small scale units can be projected provided the large scale industries mints follow a code of business ethics.
(d) Consumers movements: Consumers movement and thein awareness of rights have compelled the industry to follow is principles of business ethics.
(e) Good relations with Society: To maintain coordial atmosphere and good relations with the society, the business ethics are necessary.
(f) Beneficial to business and society: A healthy climate, which can benefit the business and the society can be created through the introduction of business ethics. Businessmen are motivated to introduce social welfare and social security measures.
(g) Consumers market: There has been a change in the concept of business. The concept of profit has been replaced by the concept of consumers satisfaction. Hence business ethics are required to maintain the balance between the profit and consumers satisfaction.
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