B USINESS E THICS 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. . I NTRODUCTION 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. . C ONCEPT OF S OCIAL R ESPONSIBILITY 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 responsibilities by business enterprises implies that they respect the aspirations of society and would try their best to contribute to the achievement of these aspirations along with their profit interests. This idea is in contrast to the common notion that business exists only for maximising profits for its owners and it is irrelevant to talk of public good. It follows that a Mani is