Social Responsibilities of Business & Business Ethics – Complete Guide For Class 11 Business Studies Chapter 6

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When it comes to understanding the responsibilities of businesses towards society, there’s a lot to unpack. Let’s delve into the key concepts of Social Responsibility of Business and Business Ethics to get a clearer picture.

Corporate Social Responsibility (CSR)

Corporate Social Responsibility is the continuing commitment by businesses to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.

Now that we’ve covered the essence of CSR, let’s move on to how social responsibility is defined and debated in the business world.

Social Responsibility Defined

“Social responsibility requires managers to consider whether their action is likely to promote the public good, to advance the basic beliefs of our society, and to contribute to its stability, strength, and harmony.” – Peter F. Drucker.

So, with an understanding of what social responsibility entails, let’s dive into the ongoing debate about its importance and implications.

A Debate on Social Responsibility

When discussing social responsibility, it’s essential to weigh both sides of the argument. Let’s explore the various perspectives on this critical issue.

Arguments for Social Responsibility

Those are some strong arguments in favor of social responsibility. However, let’s also consider the counterarguments.

Arguments Against Social Responsibility

With both sides of the debate laid out, what does the reality of social responsibility look like in practice?

The reality of Social Responsibility

The practical implementation of social responsibility brings several points of discussion. Let’s take a closer look at these real-world aspects.

Now that we’ve examined the real-world implications, let’s categorize the types of social responsibility businesses can undertake.

Kinds of Social Responsibility

Social responsibility can take various forms. Let’s break down the different types of businesses should consider.

Ethical Responsibility

The behavior of the firm is expected by society but not codified in law. Example: Respecting the religious sentiments and dignity of the people while advertising a product.

Discretionary Responsibility

Purely voluntary obligation that an enterprise assumes. Example: Contribution to charitable institutions, helping the needy in the event of a natural calamity like an earthquake.

Economic Responsibility

The primary social responsibility of a business enterprise is to provide good quality goods and services that society wants and sell them at a profit.

Legal Responsibility

Operate within the laws of the land. A law-abiding enterprise is a socially responsible enterprise as laws are made in the interest of society.

Having understood the various kinds of social responsibility, let’s explore how businesses interact with and protect the environment.

Business and Environmental Protection

Environmental protection is a crucial aspect of business ethics. Let’s dive into the specifics of how businesses impact and protect the environment.

Pollution

Pollution is the injection of harmful substances into the environment, which changes the physical, chemical, and biological characteristics of air, land, and water. It harms human life and the lives of other species.

Environment

The environment encompasses the totality of man’s surroundings, both natural and man-made. Protection of the environment is a serious issue that confronts business managers and decision-makers.

With a basic understanding of pollution and the environment, let’s discuss why pollution control is essential for businesses.

Need for Pollution Control

Understanding the need for pollution control leads us to the ethical considerations businesses must adhere to.

Business Ethics

Ethics in business is not just about legality but about doing what is right. Let’s explore the ethical decisions expected from a businessman.

Ethical Decisions Expected for a Businessman

• Provide customers with true information regarding products and services
• Allow customers to make free choices
• Provide quality products at reasonable prices

Business ethics refers to a set of moral values that govern the activities of a businessman, defining what is right and wrong.

Elements of Business Ethics

Ethics in business is driven by various elements that ensure an organization operates responsibly. Let’s take a closer look at these elements.

• Top management is committed to guiding people at all levels to follow ethical behavior.
• Publication of a ‘code of conduct’ covering areas such as health and safety in the workplace, and fair dealings in selling and marketing activities.
• Establishment of compliance mechanisms concerning ethical standards for recruitment and selection procedures.
• Involving employees at all levels by forming small groups to examine their attitude toward ethical policies.
• Measuring results from time to time and setting plans together with employees.

With these elements of business ethics in mind, let’s summarize what we’ve learned so far.

Now, Let’s Summarize the entire chapter

Concept of Social Responsibility

The obligation of businessmen towards society.

The Case for Social Responsibility

Case Against Social Responsibility

The Reality of Social Responsibility

Social Responsibility Towards Different Interest Groups

Environmental Protection and Business

Business Ethics

Business Ethics is a set of moral values that govern the activities of a business and define what is right and what is wrong when running a business. 

So, those were the major aspects of Social Responsibilities of Business & Business Ethics. By understanding these concepts, businesses can operate more ethically and responsibly, ensuring a positive impact on society and the environment,