Measuring results.<\/li>\n<\/ul>\n<\/p>\n
Question 4.
\nBriefly explain
\n(a) Air pollution
\n(b) Water pollution and
\n(c) Land pollution.
\nAnswer:
\n(a) Air pollution – Air pollution is the result of combination of factors which lowers the air quality. It is mainly due to carbon monoxide emitted by automobiles. The use of chemicals in industries and air pollution caused by industries have created a hole in the ozone layer. This produces greenhouse effect which means a dangerous warming of the earth. It is the responsibility of business to check the use of industrial chemicals and take effective steps to control air pollution.<\/p>\n
(b) Water pollution-Carefulness disposal of industrial wastes and effluents has caused the problem of water pollution. This has led to the death of animals in several cases and also posed a threat to human life. Several diseases are reported to have been caused by water pollution.<\/p>\n
Thus, it should be obligatory for every industrial unit to take steps to check water pollution. They should adopt scientific methods to dispose of waste and affluents and clean the polluted water through water treatment plants before disposing of the water in drains, canals or rivers. Water pollution had led to the death of several animals and posed a serious threat to human life.<\/p>\n
(c) Land pollution – Dumping of toxic wastes in the land causes land pollution. This might damage the quality of land making it unfit for agriculture. In order to check land pollution, solid waste disposal methods should be used by the industrial organisations. The combustible wastes should be separated and used as fuels in industrial boilers.<\/p>\n
Question 5.
\nWhat are the major areas of social responsibility of business?
\nAnswer:
\nSocial responsibility has an element of voluntary action on the part of the business person to perform social responsibilities.
\nThe case for social responsibility – Business is expected to be responsible to society due to the following reasons :
\n(1) Self-interest – Business exists for providing goods and services to satisfy human needs. Though, profit motive is an important justification for business activity but in the long-term, it is in the interest of business to assume social obligations.<\/p>\n
Enlightened businessmen recognise that they can succeed better by fulfilling the demands and aspirations of society. People who have had a higher standard of living and have been exposed to an environment conducive to healthy growth make better employees and customers for business than those who are poor, ignorant and oppressed. For example, provision of higher wages and good working conditions motivates workers to work hard and produce more. In fact, the prosperity and growth of business is possible only through continuous service to society.<\/p>\n
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(2) Creation of society – Business is a creation of society and uses the resources of society. Therefore, it should fulfill obligations to society. Businessmen should respond to the demands of society and should utilise the social resources at their command for the benefit of the people. In the long run a successful business can be built on the foundations of a happy community and a satisfied workforce. Social responsibility by business provides justifications for its existence and growth.<\/p>\n
(3) Social power – Businessmen have considerable social power. Their decisions and actions affect the lives and fortunes of all of us. They collectively determine for the nation such important matters as amount of employment, rate of economic progress and distribution of income among various groups.<\/p>\n
Businessmen should assume social obligations commensurate with their social power. Otherwise, their social power will be taken away by the society through government controls and other regulations. It is, therefore, the moral and right thing for business enterprises to assume social obligations. Therefore, it is in the interest of business to fulfil social responsibilities in order to improve the image of business when it supports social goals.<\/p>\n
(4) Public image-A business can improve its image in public by assuming social obligations. Good relations with workers, consumers and suppliers help in the success of business. Social obligations improve the confidence and faith of people in a business enterprise.<\/p>\n
(5) Social awareness – No business can be done in isolation from society. It is the society that permits business to exist and grow. Nowadays consumers and workers are well informed about their rights. Consumers expect better quality products at reasonable prices. Similarly, workers desire fair wages and other benefits. They exercise pressure on the employers through trade unions. If business does not fulfil its obligations, there will be industrial unrest and conflict in society. A society with fewer problems provides better environment for a firm to conduct its business.<\/p>\n
<\/p>\n
(6) Free enterprise If businessmen do not accept and discharge their social obligations they will lose their freedom. For example, the government has passed the Consumer Protection Act to prevent businessmen from indulging in adulteration, black marketing and other anti-social practices.<\/p>\n
Thus, social responsibilities are essential for avoiding governmental action against business. Such action will reduce the freedom of decision matting in business. Business enterprises have started realising the fact that social interest and business interest are not contradictory. Instead, these are complementary in nature.<\/p>\n
(7) Law and order – Business can survive and grow only when there is law and order in society. Every business has a responsibility to operate within the laws of the land. Since these laws are meant for the good of the society, a law abiding enterprise is a socially responsible enterprise as well.<\/p>\n
(8) Moral justification – In a large country like India, government alone cannot solve all Hie problem -. Business has money and talent with which it can assist the government in solving which it can assist the government in solving problems.<\/p>\n
<\/p>\n
For example, business can play a vital role in solving regional disparities, unemployment illiteracy, scarcity of foreign exchange and such other problems in the country. Moreover, business has created some problems such as pollution. Therefore, business should help society in solving its problems.<\/p>\n
(9) Socio-cultural Norms – India has a rich cultural heritage. Businessmen who help in preserving and promoting this heritage will naturally enjoy the patronage of the society and the government. Business should, therefore, promote equality of opportunity, healthy relations with employees and customers, etc.<\/p>\n
(10) Professionalisation – Management of business enterprises is being professionalised. An owner-manager nurses a greater greed for profiteering because all the gains go to him. But a salaried and qualified manager is loss likely to be lured because he does not benefit from the profits earned through questionable practices.<\/p>\n
(11) Trusteeship – Mahatma Gandhi suggested that \u201cthose who own money or property should hold and use it in trust for society\u201d. Businessmen should run business firms not for their self-enrichment but for the good of the society.<\/p>\n
Long Answer Questions<\/span>
\nQuestion 1.
\nBuild up arguments for and against social responsibility.
\nAnswer:
\nArguments for Social Responsibility:
\n(i) Justification for existence and growth:
\nBusiness exists for providing goods and services to satisfy human needs. Though profit motive is an important justification for undertaking the business activity, it should be looked upon as an outcome of service to the people. In fact, the prosperity and growth of the business are possible only through continuous service to society. Thus, the assumption of social responsibility by businesses provides justifications for their existence and growth.<\/p>\n(ii) Long-term interest of the firm:
\nA firm and its image stand to gain maximum profits in the long run when it has its highest goal as \u2018service to society\u2019. When increasing number of members of society including workers, consumers, shareholders, government officials, feel that business enterprise is not serving its best interest, they will tend to withdraw their cooperation to the enterprise concerned. Therefore, it is in its own interest if a firm fulfills it\u2019s social responsibility. The public image of any firm would also be improved when it supports social goals.<\/p>\n
(iii) Avoidance of government regulation:
\nFrom the point of view of a business, government regulations are undesirable because they limit freedom. Therefore, it is believed that businessmen can avoid the problem of government regulations by voluntarily assuming social responsibilities, which helps to reduce the need for new laws.<\/p>\n
(iv) Maintenance of society:
\nThe argument here is that laws cannot be passed for all possible circumstances. People who feel that they are not getting their due from the business may resort to anti-social activities, not necessarily governed by law. This may harm the interest of business itself. Therefore, it is desirable that business enterprises should assume social responsibilities.<\/p>\n
(v) Availability of resources with business:
\nThis argument holds that business institutions have valuable financial and human resources which can be effectively used for solving problems. For example, business has a pool of managerial talent and capital resources, supported by years of experience in organising business activities. It can help society to tackle its problems better, given the huge financial and human resources at its disposal.<\/p>\n
(vi) Converting problems into opportunities:
\nRelated with the preceding argument is the argument that business with its glorious history of converting risky situations into profitable deals, can not only solve social problems but it can also make them effectively useful by accepting the challenge.<\/p>\n
(vii) Better environment for doing business:
\nIf business is to operate in a society which is full of diverse and complicated problems, it may have little chance of success. Therefore, it is argued that the business system should do something to meet needs before it is confronted with a situation when its own survival is endangered due to enormous social illnesses. A society with fewer problems provides be ‘ r environment for a firm to conduct its business.<\/p>\n
(viii) Holding business responsible for social problems:
\nIt is argued that some of the social problems have either been created or perpetuated by business enterprises themselves. Environmental pollution, unsafe workplaces, corruption in public institutions, aid discriminatory practices in employment are some of these problems. Therefore, it is the moral obligation of business to get involved in solving these problems, instead of merely expecting that other social agencies will deal with them on their own.<\/p>\n
Arguments against Social Responsibility Major arguments against social responsibility are:
\n1. Violation of profit maximisation objective:
\nAccording to this argument, business exists only for profit maximisation. Therefore, any talk of social responsibility is against this objective. In fact, business can best fulfill its social responsibihty if it maximises profits through increased efficiency and reduced costs.<\/p>\n
2. Burden on consumers:
\nIt is argued that social responsibilities like pollution control and environmental protection are very costly and often require huge financial investments. In such circumstances, businessmen are likely to simply shift this burden of social responsibihty by charging higher prices from the consumers instead of bearing it themselves. Therefore, it is unfair to tax the consumers in the name of social responsibihty.<\/p>\n
3. Lack of social skills:
\nAll social problems cannot be solved the way business problems are solved. In fact, businessmen do not have the necessary understanding and training to solve social problems. Therefore, according to this argument, social problems should be solved by other, specialized agencies.<\/p>\n
4. Lack of broad public support:
\nHere the argument is that the public in general does not like business involvement or interference in social programmes. Therefore, business cannot operate successfully because of lack of public confidence and cooperation in solving social problems.<\/p>\n
Question 2.
\nDiscuss the forces which are responsible for increasing concern of business enterprises towards social responsibility
\nAnswer:
\nResponsibilities towards different interest groups – As a socio-economic institution, business comes into contact with several groups such as shareholders, employees, customers, the government, community, suppliers, competitors, etc. Business is responsible to all these interest groups.<\/p>\n
<\/p>\n
(1) Responsibilities towards owners and investors – A business enterprise has the responsibility to provide a fair return to shareholders or owners on their capital investment and ensure the safety of their investment. To provide the shareholders the following informations in order to protect their investment:<\/p>\n
\n- To ensure safety of investment;<\/li>\n
- To provide a fair and regular dividend or interest;<\/li>\n
- To offer reasonable appreciation of capital through optimum utilisation of resources;<\/li>\n
- To provide regular, accurate and adequate information on the financial position of the company;<\/li>\n
- \u00a0To offer reasonable opportunities for participation of shareholders in policy decisions; and<\/li>\n
- To give equal treatment to all shareholders.<\/li>\n<\/ul>\n
(2) Responsibilities towards workers – The employees are the greatest asset of a business and their well-being is a matter of material advantage as well as moral obligation. Employees should be treated as honourable individuals who are justly rewarded, fairly encouraged, fully informed and properly assigned.<\/p>\n
Their lives must be given meaning and dignity. A senseofpartnershipand belonging should be inculcated. They should be provided both economic and psychological satisfaction. The enterprise must respect the democratic rights of workers. Business has the following responsibilities towards its employees:<\/p>\n