2. • Managers in the organisation are concerned with both
internal and external environments.
• Managers always plan considering the wants and
desires of members of the society outside the
organisation.
• For most organisations, social responsibility is a way of
life. It entails all such activities ranging from providing
safe products and services to giving a portion of
company’s profits to welfare organisation.
3. Social Responsibility of Business
Social responsibility of business is also viewed as
conducting its operations in a free and fair manner by
discharging its commitment towards different segments of
its operational environment such as:
1. Responsibility towards Shareholders
2. Responsibility towards Consumers
3. Responsibility towards Employees
4. Responsibility towards Creditors
5. Responsibility towards Government
6. Responsibility towards Suppliers
7. Responsibility towards Competitors
8. Responsibility towards General Public
4. ROLE OF GOVERNMENT
• Social changes can be implemented only by law.
• There are many instances to prove it.
• Eg., The Central Board of Direct
Taxes, Government of India increased its tax
collection efficiency and effectiveness by
introducing a simple tax return format called
“SARAL”.
• This idea was to make tax-return formats more
user friendly and eliminate intermediaries like tax
consumers.
5. THE SOCIAL AUDIT
• Social Audit is the main tool to evaluate Corporate Social Responsibility.
• It involves a commitment to systematic assessment of the company’s main
activities that have a social impact and reporting to the society on relevant
issues.
• Social Audit encompasses every possible area, such as Pollution
Control, Training and Development, Promotion of Minorities and so on.
Difficulty:
i. It is difficult to determine the amount of money an enterprise spends in
selected areas. Cost is an inadequate measure and does not show the
results of social involvement.
ii. Other problems are the collection of the data and its presentation in a way
that accurately reflects the social involvement of an enterprise.
6. ETHICS IN MANAGING
Ethics refer to what is good and bad and is related to moral duty
and obligation.
Different types:
a. Personal Ethics
b. Accounting Ethics
c. Business Ethics
Implementing Ethical Concepts may be implemented in 3 ways:
1. Establishing appropriate company policy as a code of ethics.
2. Involve a formally appointed Ethics Committee.
3. Teach Ethics in Management Development Programs.
7. CODE OF ETHICS
Code of Ethics is a statement of
policies, principles or rules that guide
behaviour.
It do not only apply to business enterprise;
they should guide the behaviour of persons in
all organisation and in every day of life.
8. ETHICS COMMITTEE
Code of Ethics has to be necessarily supplemented by the
appointment of an Ethics Committee, consisting of internal and
external directors.
The functions of the Committee include:
• Holding regular meetings to discuss ethical issues.
• Dealing with ‘Gray Areas”.
• Communicating the code to all members of the organisation.
• Checking for possible violation of code.
• Enforcing the code.
• Rewarding the compliance and punishing violations.
• Reviewing and updating the code.
• Reporting activities of the committee to Board of Directors.
9. Factors that raise Ethical Standards
The factors that raise ethical standards are:
a. Public disclosure and publicity.
b. The increased concern of well-informed
public.
c. Government regulations.
d. Educational Programmes in Ethics.
10. Suggestions to develop Ethical
Conduct
There are certain suggestions in developing Ethical Conduct throughout
an organisation.
I. Provide Guidelines for Ethical Behaviour.
II. Teach Ethical Guidelines and their importance.
III. Do not get into problem areas that invite criticisms.
IV. Appoint an outside agency (that reports directly to BOD) to audit the
ethical behaviour of managers.
V. Punish trespassers in a meaningful way and make it public so that it may
deter others.
VI. Emphasize regularly that loyalty to the company does not excuse improper
behaviour or actions.
