Students can Download 1st PUC Business Studies Chapter 6 Social Responsibilities of Business and Business Ethics Questions and Answers, Notes Pdf, 1st PUC Business Studies Question Bank with Answers helps you to revise the complete Karnataka State Board Syllabus and to clear all their doubts, score well in final exams.
Karnataka 1st PUC Business Studies Question Bank Chapter 6 Social Responsibilities of Business and Business Ethics
1st PUC Business Studies Social Responsibilities of Business and Business Ethics Text Book Questions and Answers
Multiple Choice Questions
Question 1.
Social responsibility is
(a) Same as legal responsibility
(b) Broader than legal responsibility
(c) Narrower than legal responsibility
(d) None of them
Answer:
(b) Broader than legal responsibility
Question 2.
If business is to operate in a society which is full of diverse and complicated problems, it may have
(a) Little chance of success
(b) Great chance of success
(c) Little chance of Mure
(d) No relation with success or Mure.
Answer:
(a) Little chance of success
Question 3.
Business people have the skills to solve
(a) All social problems
(b) Some social problems
(c) No social problems
(d) All economic problems
Answer:
(b) Some social problems
Question 4.
That an enterprise must behave as a good citizen is an example of its responsibility towards
(a) Owners
(b) Workers
(c) Consumers
(d) Community
Answer:
(d) Community
Question 5.
Environmental protection can best be done by the efforts of
(a) Business people
(b) Government
(c) Scientists
(d) All the people .
Answer:
(d) All the people .
Question 6.
Carbon monoxide emitted by automobiles directly contributes to
(a) Water pollution
(b) Noise pollution
(c) Land pollution
(d) All the people.
Answer:
(d) All the people.
Question 7.
Which of the folio wing can explain the need for pollution control?
(a) Cost savings
(b) Reduced risk of liability
(c) Reduction of health hazards
(d) All of them
Answer:
(d) All of them
Question 8.
Which of the following is capable of doing maximum good to society?
(a) Business success
(b) Laws and regulations
(c) Ethics
(d) Professional management
Answer:
(c) Ethics
Question 9.
Ethics is important for
(a) Top management
(b) Middle-level managers
(c) Non-managerial employees
(d) All of them
Answer:
(d) All of them
Question 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 mechanisms
(d) None of them
Answer:
(b) Involvement of employees
Short Answer Questions
Question 1.
What do you understand by the social responsibility of business? How is it different from legal responsibility?
Answer:
Social responsibility of business refers to its obligation to make those decisions and perform those actions which are desirable in terms of the objectives and values of society. The very concept of social responsibility implies that it is essentially an ethical issue, since it involves the question of what is morally right or wrong in relation to the firm’s responsibilities.
Some people strongly believed that a firm’s only social responsibility is towards its owners. Some others, however, hold an opposite view and argue that the firm has a social responsibility to serve all sections of society who are affected by its decisions and actions.
Legal Responsibility-Every business has a responsibility to operate within the laws of the land. Since these laws are meant for the good of society, a law-abiding enterprise is a socially responsible enterprise as well. Social responsibility is broader than the legal responsibility of business.
Legal responsibility may be fulfilled by more compliance with the law Social responsibility is more than that. It is a firm’s recognition of social obligations even though not covered by the law, along with the obligations laid down by law. In other words, social responsibility involves an element of voluntary action on the part of business people for the benefit of society.
Question 2.
What is the environment? What is environmental pollution?
Answer:
The environment is defined as the totality of man’s surroundings including both natural and man-made surroundings including natural resources like land, water, air, fauna and flora and raw materials; or man-made resources such as cultural heritage, socioeconomic institutions and the people.
Environmental pollution refers to the injection of harmful substances into the environment which cause change in the physical, chemical and biological characteristics of air, land and water and harm the life of human and other species.
Question 3.
What is business ethics? Mention the basic elements of business ethics.
Answer:
Business ethics – Every business is expected to carry its operations in an ethical manner. By ethics, we mean the business practices which are desirable from the point of view of society. For instance, when we talk of the social obligations of the business, we refer to business ethics.
The word ‘6111)08’ comes from the Greek root ‘ethos’ which means character, guiding beliefs, standards or ideals that pervade a group or community. In simple words, ethics specify what is good or bad, fair or unfair, right or wrong? When applied to business, ethics mean the business practices which are desirable from the point of view of society. Ethics can be referred to codes or other systems, for controlling means so that they serve human ends.
Meaning of business ethics – Business ethics refer to the moral principles which should govern business activities. These concerns the relationship between business objectives, practices and techniques for the good of society. They are concerned with determining what is right and what is wrong while doing the business. Business ethics provide a code of conduct for managers. The purpose of business ethics is to guide the managers and employees in performing their jobs. They lay down the norms of behaviour for the business and guide it in undertaking socially responsible activities.
A business is a part of society and so it should follow the ethical or moral norms of the society. It should be guided by the principles which are considered right by society. It is expected of every business firm to integrate ethical values with the business operations. Ethical business behaviour improves the public image, earns people’s confidence and trust, and leads to success.
Another related concept is that of ‘value’ which denotes society’s beliefs regarding certain issues. In the light of the social values, we can evaluate the policies and practices of a business. An ethically responsible enterprise develops a culture of caring for people and the environment and commands a high degree of integrity in dealing with others.
elements of business ethics – Ethical business behaviour is good for both the business enterprise and society’. The essential elements of business ethics are as follows.
- ‘Business ethics’ is an umbrella term which covers all business practices which are desirable from the point of view of society.
- Ethics coexist with the law but have much broader coverage. Ethics aim at perfection in the conduct of life. Thus, it guides the lawmakers to have perfect rules for all human behaviour.
- The concept of equity is implied in ethics. It aims at fair and reasonable treatment to all.
- Business ethics emphasize making a businessman an honest, just, and responsible citizen.
- Business ethics create self-imposed discipline on the part of the business firms.
- Topmanagementhasacrucialroleinguidingtheenti reorganizations towards ethically upright behaviour through continuous leadership.
Question 4.
Briefly explain
- Air Pollution
- Water pollution
- Land pollution.
Answer:
- Air pollution: It is mainly due to carbon monoxide emitted by automobiles. Smoke and other chemicals from production plants pollute the air. It results in air pollution. It has created a hole in the ozone layer leading to the dangerous warming of the earth.
- Water pollution: Business enterprises have been dumping chemicals and waste into rivers, lakes. It leads to the death of animals and dangerous to human life.
- Land pollution: Dumping of toxic wastes on land, causes land pollution. This damages the quality of land and making it unfit for agriculture.
Question 5.
What are the major areas of social responsibility of business?
Answer:
When the business commences, the social objective of the firm is recognized and it is important for the organization to know to whom and for what the business and its management are responsible. The major areas of social responsibilities of business include the following.
(i) Responsibility towards the shareholders or owners:
A business enterprise has the responsibility to provide a fair return to the shareholders or owners on their capital investment and to ensure the safety of such investment. The corporate enterprise on a company form of organisation must also provide the shareholders with regular, accurate, and full information about its working as well as schemes of future growth.
(ii) Responsibility towards the workers:
Management of an enterprise is also responsible for providing opportunities to the workers for meaningful work. It should try to create the right kind of working conditions so that it can win the cooperation of workers. The enterprise must respect the democratic rights of the workers to form unions. The worker must also be ensured of a fair wage and a fair deal from the management.
(iii) Responsibility towards the consumers:
Supply of the right quality and quantity of goods and services to consumers at reasonable prices constitutes the responsibility of an enterprise toward its customers. The enterprise must take proper precautions against adulteration, poor quality, lack of desired service and courtesy to customers, misleading and dishonest advertising, and so on. They must also have the right to information about the product, the company, and other matters having a bearing on their purchasing decision.
(iv) Responsibility towards the government and community:
An enterprise must respect the laws of the country and pay taxes regularly and honestly. It must behave as a good citizen and act according to the well-accepted values of the society. It must protect the natural environment and should avoid bad, effluent, smoky chimneys, ugly buildings dirty working conditions. It must also develop a proper image in society through continuous interaction with various groups of people.
Long Answer Questions
Question 1.
Build up arguments for and against social responsibilities.
Answer:
Social responsibility of business means obligation to act in a manner which will serve the best interests of society. The social obligation of a business is different from the provisions of the law. But social obligation relates to the voluntary efforts on the assumption that what is good for the society is also good of the business. It would be useful to understand that arguments offered in favour of social responsibilities of business.
Case for Social Responsibility — Sorne people argue that a business is an economic entity and so it should follow econbrnic objectives only. It should not devote itself to social objectives. If it spends money and energy on social obligations, its profitability will godown.
But the modern view of business advocates assumption of social responsibilities by the business. The arguments in favour of assumption of social obligations are discussed below:
(1) Justification for existence and growth – Business is a creation of society and so it should respond to the demands of the society. As business uses the resources which belong to society, it is necessary that it should fulfill its social obligations. Business managers are obliged to use social resources for the common good of society.
(2) Long-term interest of business – It would be in the long-term interest of business to fulfill the demands and aspirations of the society, The people who have a good environment, education, and opportunities make good employees, customers and neighbors for the business. The public image of any firm would be improved when it supports social goods.
(3) Moral justification – Every business uses capital, physical and human resources of the society for achieving its purpose. It is also dependant on society for the acceptance of its output or goods and services. Further, business firms make use of various social facilitates or infrastructure like roads, power and water supply. Therefore, it is the moral responsibility of a business to pursue its social obligations and contribute to the well-being of society.
(4) Maintenance of society-Public image of a business will improve if it follows its social obligations. The business will retain the need credibility with the public. It will also avoid conflict with the society which is in its own interest. Good relations with the workers, consumers and suppliers will lead to the success of the business.
(5) Balancing of social power – A business firm has considerable social power in the sense that its decisions and activities can affect the consumers, employees, environment and surrounding community. It is logical that the business should assume corresponding responsibility to the diverse segments of society. If social power and responsibility are not balanced, the business might use its power against the interests of consumers, employees, the environment and the community.
(6) Avoidance of government intervention – In case the business fails to respond to social needs voluntarily, the Government wi 11 force the business to discharge its obligations through legislation. This will reduce the freedom and flexibility of the business. Hence it is in the interest of the business to voluntarily fulfil its obligations to society.
(7) Consumers’ Awareness – These days, the consumers are well informed. They expect higher quality products at reasonable rates. If they don’t get fair treatment from the business, they can organise themselves in the form of Consumers
Associations and compel the business to assume its social obligations.
The Case Against Social Responsibility – Some experts criticize the concept of social responsibility. They put forward the following arguments against the assumption of social responsibility business firms:
(1) Vague concept – The concept of social responsibility is very vague and amenable to different interpretations. There is no consensus on its meaning and scope. In such a situation it would be futile as well as risky to accept social responsibility.
(2) Violation of profit maximization objective – Involvement of business in social activities may dilute focus on economic productivity and weaken its position in the marketplace. Businessmen may get confused about their role in society. As a result business may perform poorly in both economic and social roles. Managers are the agents of owners and their sole mission should be to maximize profits consistent with law and social customs.
(3) Lack of social skill – All social problems cannot be solved the way business problems are solved. Business firms and their managers may lack the perception and skills to handle social issues. Their outlook a primarily economic and their skills are best suited for business activities. They may mishandle social matters. Therefore, social problems should be solved by other specialised agencies.
(4) Costs of social involvement – It is argued that social responsibilities like pollution control and environmental protection are very costly. Businesses cannot afford to invest considerable economic resources in social issues. Ifitdoesso costs of doing business will increase. Business is 1 likely to pass on the additional costs to consumers by increasing prices. This would imply additional burden on consumers. Therefore, it is unfair to tax the consumers in the name of social responsibility.
(5) Undermines free enterprise – Businessmen can be held accountable for social problems only when consumers, minorities, women, environmentalists and other social groups are represented on the board of directors. Such a diversity of interests would make the decision-making process political thereby undermining the free enterprise system.
(6) Business are not moral agents-Social responsibility is basically an amoral concept. Business organisations are not moral agents and cannot be expected to act on moral grounds. Public in general does not like business involvement or interference in social programmes.
(7) Reduction in competitive position – Indian business firms are often not fully competitive in international markets. In case they are asked to incur expenditure on social problems, their international competitiveness will deteriorate.
(8) Improper role-The proper role of business is to use its resources and energies efficiently so as to earn the best possible return on investment within the confines of law and ethics. Business should concentrate on economic performance leaving for special service to other organisations.
(9) Already responsible-Business oTgatfisation’are already serving society by providing goods and services, generating employment, developing technology and contributing to public exchequer through tax payments. It would be unjust to overburden them with further responsibilities.
The arguments against social responsibility suffer from two weaknesses. First they require business firms to ignore social demands which they cannot do. Secondly, the critics are Overstressing the influence and power which business may exercise by assuming social responsibilities. Public opinion is in favour of the assumption of social responsibilities. In fact the question today is not whether or not to accept responsibilities but how much responsibilities to assume.
Question 2.
Discuss the forces which are responsible for increasing concern of business enterprises toward social responsibility.
Answer:
The following forces have been responsible for increasing concern of business enterprises towards social responsibility.
(i) Threat of public regulation:
Democratically elected governments of today are expected to act as welfare states whereby they have to take care of ah sections of society. Thus,.where business institutions operate in a socially irresponsible manner, action is taken to regulate them for safeguarding people’s interest. This threat of pubhc regulation is one important reason due to which business enterprise feels concerned with social responsibility.
(ii) Pressure of labour movement:
Over the last century or so, labour has become far more educated and organised. Accordingly, labour movement for extracting gains for the working class throughout the world has become very powerful. This has forced business enterprises to pay due regard to the welfare of workers instead of following a policy of ‘hire and fire’ under which they could deal with workers at their will.
(iii) Impact of consumer consciousness:
Development of education and mass media and increasing competition in the market have made the consumer conscious ofhis right and power in determining market forces. The principle of caveat emptor (or let the buyer beware) has been substituted by the principle of customer is king’. Business enterprises have started following customer-oriented policies.
(iv) Development of social standard for business:
Businesses are no longer considered merely money crazy entities which can be allowed to mint money at any cost and get away with any kind of business practices. New social standards consider economic activity of business enterprises as legitimate but with the condition that they must also serve social needs.
No business can be done in isolation from society. It is the society that permits the business to exist and grow and it is on the basis of social standards that business functioning is to be ultimately judged.
(v) Development of business education:
Development of business education with its rich content of social responsibility has made more and more people aware of the social purpose of business. Educated persons as consumers, investors, employees, or owners have become more sensitive towards social issues than was the case earlier, when such education was not available.
(vi) Relationship between social interest and business interest:
Business enterprises have started realizing the feet that social interest and business interest are not contradictory. Instead, these are complementary to each other. The feeling that business can grow only through the exploitation of society has given way to the belief that the long-term benefit of business lies in serving society well. So also, a useful institution like business is recognized as an essential element of a modem civilised society.
(vii) Development of professional, managerial class:
Professional management education in universities and specialised management institutes has created a separate class of professional managers who have got an altogether different attitude towards social responsibility as compared to the earlier class of owner-manager.
Professional managers are more interested in satisfying a multiplicity of interest groups in society for running their enterprises successfully than merely following profit goals. These and a number of other social and economic forces have combined together to make the business a socioeconomic activity.
Business is no longer a mere occupation; it is an economic institution that has to reconcile its short-term and long-range economic interests with the demands of the society in which it functions. Essentially, it is this which gives rise to the general and specific social responsibilities of business.
While there is no denial of the feet that business is essentially an economic enterprise and that it must ultimately justify itself on economic performance, it is also true that business is an organ of society and as such it must justify its continuance by fulfilling its roles and responsibilities of society.
Question 3.
‘Business is essentially a social institution and not merely a profit-making activity. Explain.
Answer:
A business enterprise should do business and earn money in ways that fulfill the expectations of 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.
Every business firm has certain obligations towards society. It has to respect social values and norms of behaviour. It is obligatory on the part of business enterprise not to do anything, that is endorsable from society’s point of view.
Manufacturing and selling of adultered goods, making deceptive advertisements, not paying taxes due timely, polluting the environment, and exploiting workers are some of the cases which may increase the profit of the enterprises but have adverse effects on society at large.
On the other hand, supplying good quality goods, creating healthy working conditions, honestly paying taxes, preventing pollution and environment, and sincerely attending to customers complaints and grievances 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.
Social responsibility of business refers to its obligation to make 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. The idea is that business is essentially a social institution and not merely a profit-earning activity.
It follows responsible business, and indeed any responsible member of society must act with due concern for the effects on the lives of other people. Should a business enterprise be run for the benefit of its owners who may desire to get as much profit as is possible or else, it needs to be responsible for serving the interest of other sections of the society such as customers, employees, suppliers, government, and community? The very concept of social responsibility implies that it is essentially an ethical issue since it involves the question of what is morally right or wrong in relation to the firm’s responsibilities.
In brief, the concept of social responsibility is based on the promise that a business firm is more than an economic institution. It is an organ of society and its activities exercise significantly meant for society. Therefore, businesses should work beyond the narrow goal of profit-making. In the long run, social responsibility is consistent with the profit motive. A business cannot survive and grow without serving society. By fulfilling its social obligations, a business creates an environment that is conducive to the business.
Question 4.
Why do enterprises need to adopt pollution control measures?
Answer:
Pollution prevention or control is needed to preserve precious environmental resources and to improve the environmental quality so that the preserved resources can be utilized for the benefit of mankind and the improvement of the health and wellbeing of the people.
The amount of damage to a particular medium (air, water, land) varies according to the type of pollutant, the amount of pollutant disposed of, and the distance from the source of pollution.
1. Reduction of health hazards:
There is increasing evidence that many diseases like cancer, heart attacks, and lung complications are caused by pollutants in the environment. Pollution control measures can not only check the seriousness of such diseases but can also be supportive of healthy life on earth.
2. Reduced risk of liability:
It is possible that an enterprise is held liable to pay compensation to people affected by the toxicity of gaseous, liquid and solid wastes it has released into the environment. Therefore, it is a sound business policy to install pollution control devices on its premises to reduce the risk of liability.
3. Cost savings:
An effective pollution control program is also needed to save costs of operating business. Cost savings are particularly noticeable when improper production technology results in greater wastes which lead to a higher cost of waste disposal and cost of cleaning the plants.
4. Improved public image:
As society becomes increasingly conscious of environmental quality, a firm’s policies and practices for controlling wastes will increasingly influence people’s attitude towards its work. A firm that promotes the cause for the environment will be able to enjoy a good reputation and will be perceived as a socially responsible enterprise.
5. Other social benefits:
Pollution control results in many other benefits like clearer visibility, cleaner buildings, the better quality of life, and the availability of natural products in a purer form.
Question 5.
What steps can an enterprise take to protect the environment from the dangers of pollution?
Answer:
Steps to Pollution Control – The success of a business depends on the well-being of people in the society which, in turn, depends on the preservation of the natural environment that provides land and other natural resources to the business. The government has passed several laws and framed rules against air, water, and noise pollution.
These must be followed by the business firms both in letter and spirit.’It is the social responsibility of every business to check a” sorts of pol Iutipn of environment and take steps to protect the environment. Several approaches of steps can be adopted to check pollution. Some of these approaches are given below :
(1) Environmental evaluation – Echo friendly or clean and low waste technology should be used by industrial organizations. Any industrial activity should be allowed after a comprehensive evaluation of its impact on the environment. For example, all government agencies in India are required to submit The Environmental Impact Statement for their projects. This would ensure that all effects of an industrial undertaking are examined before it is approved. An environmental audit is necessary to prevent undue pollution of the environment.
(2) Establishing pollution control standards – Standards can be laid down to prescribe the maximum allowable level of specific pollutants. For example, Euro 11 emission norms have been established for small cars manufactured in India to check air pollution. There should be the scientific treatment
(3) Regulation: Water pollution is controlled through regulations. of all emissions before the release into the environment. Licensing procedures have been laid down to regulate industrial and municipal discharge into rivers and canals. Certain types of waste and pollutant scans be discharged only after treating them through prescribed technology. Business houses should comply with the laws and regulations enacted for the prevention of pollution control.
(4) Banned hazardous substances – Under this approach unsafe or hazardous substances are either banned or their use is restricted. For example, smoking in public places and the use of polythene bags are banned in some states. Legislative control over toxic substances is necessary to check environmental pollution. The Bhopal gas tragedy prompted the Government of India to enact new and more stringent rules and regulations.
Businesscanadoptthefollowingmeasuresforenvironmental protection :
- Comply both in letter and spirit with the laws and regulations enacted for the prevention of air and water pollution,
- Assist public authorities in their programmes of environmental protection.
- Recycle waste and effluent before discharging them from factories.
- Provide financial assistance to government and non-government organizations for environmental protection.
- Institute awards and prizes for outstanding achievements in the field of environmental protection.
- Modernise manufacturing and other activities to minimise pollution of the environment.
- Employ eco-friendly techniques and systems in different areas of business.
Question 6.
Explain the various elements of business ethics.
Answer:
Concept and elements of business ethics – Every business is expected to carry its operations in an ethical manner. The word ethics’ is derived from the Greek word ‘ethos’ which means character, ideals, and standards of behaviour. Ethics may be defined as the study of moral behaviour.
It is concerned with standards of moral conduct as these are established and expressed through the behaviour of individuals in an organization or society. In simple words, ethics specify what is good or bad, fair or unfair, right or wrong. Every occupation has its own ethics, e.g. medical ethics, legal ethics, accounting ethics, business ethics, etc.
Ethics become meaningful only when they are understood with reference to the decisions and actions of individuals in a particular field of activity. Ethics define what is right and what is wrong. They constitute a set of principles or rules for governing behaviour. When applied to business, ethics means the business practices which are desirable from the point of view of society.
Concept of Business Ethics – Business ethics may be defined as a set of standards or principles governing the moral conduct of businessmen. It requires the businessmen to be honest with themselves and with others. Ethical behaviour on the part of all those engaged in business has its roots in various aspects of contemporary society, e.g. social values, work ethics, goals of the organization, etc. Ethical behavior for businessmen varies according to different situations. However, a morally responsible businessman is one who observes the value system best suited for a particular situation. It is expected of every business firm to integrate ethical values with the business operations.
It is difficult to say what constitutes unethical behaviour on the part of businessmen. However, keeping a double set of accounts to evade taxes, corrupting public servants to get favours, using misleading advertisements to defraud customers, revealing trade secrets to competitors, using a company’s property for personal benefit are all examples of unethical business behaviour. Society does not approve of sale of adulterated goods use of false weights, hoarding of goods or black-marketing of goods.
An act, decision, or behaviour is considered ethical if it is in conformity with the norms or standards prevailing in the society. Ethics, therefore, involves the critical evaluation of human actions to determine whether they are right or wrong in terms of truth and justice.
For example, false claims in advertisements and doing personal business on company time are unethical. However, it is not always easy in differentiating between right and wrong. The same act may be unethical in one situation and ethical in another. For instance, killing a civilian in a time of war is unethical but killing an enemy soldier in the same war is considered ethical.
Ethical behaviour is above the behaviour required by law though in many respects ethics and law overlap. Law reflects what society considers the minimum standards of conduct and behaviour. Both ethics and law are concerned with right and wrong. However, law embodies society’s codified ethics. Violation of law is always unethical but the violation of ethics may not always be illegal.
When profit maximization was considered to be the aim of business, ethics was not given importance in business affairs. In order to prevent unethical practices and to curb the exploitation of consumers, the Government of India passed the
Consumer Protection Act and other laws. Now businessmen realise that ethical considerations are important in business for the following reasons :
- Businessmen are responsible for the welfare of society. They can discharge their social responsibilities only when they adopt ethical practices.
- Modern society is an industrial society and business values, to a lack extent, are adopted by most members of the society.
- If a business adopts unethical practices, it can lose the power and prestige it enjoys in society.
- A job has a fairly important place in a person’s life. A healthy personality can be developed only when business values are in harmony with social values.
- Business ethics create self-imposed discipline on the part of die business firms.
Elements – Business ethics is an umbrella term which covers all business practices which are desirable from society point of view. The main elements of business ethics are as follows: –
(1) Values-Values are the beliefs which an individual, an organisation or a society holds. Values represent convictions and stem from personal beliefs and opinions. For example, supplying a quality product ir, spite of holdings monopoly in its production and distribution may be the value of a company. Business ethics emphasize making a businessman an honest, just, and responsible citizen.
(2) Rights – Rights are the claims that entitle a person to take particular actions. For example, everybody has certain rights as a citizen of the country. The concept of equity is implied in ethics. It aims at fair and reasonable treatment to all.
(3) Duties -Duties are the obligations of a person or an organization. For example, every citizen has the duty to follow the laws of the country. Ethics aim at perfection in the conduct of life. Thus, it guides the law’ makers to have a perfect ruler for all human behaviour.
1st PUC Business Studies Social Responsibilities of Business and Business Ethics Additional Questions and Answers
One Mark Questions
Question 1.
State any one argument for the social responsibility of business.
Answer:
Favourable environment of business
Question 2.
State any one argument against the social responsibility of business.
Answer:
Lack of social skills
Question 3.
State any one of the social responsibility of business towards investors.
Answer:
Chairman and directors of the company should be easily accessible to the investors.
Question 4.
State any one of the social responsibility of business towards consumers.
Answer:
Right Information about a product
Question 5.
State any of the causes for pollution.
Answer:
Population growth
Question 6.
Mention any one of the type of pollution.
Answer:
Air Pollution
Question 7.
State any one need for pollution control.
Answer:
Reduced risks of liability
Question 8.
What is business ethics?
Answer:
Business ethics is the set of values, principles and standards governing the moral conduct of the business.
Question 9.
State any of the elements of business ethics.
Answer:
Involving employees at all levels
Two Marks Questions
Question 1.
What is the social responsibility of business?
Answer:
Social responsibility is an ethical framework and suggests that an entity, be it an organization or individual, has an obligation to act for the benefit of society at large.
Question 2.
State any two arguments for social responsibilities of business.
Answer:
- Avoidance of government regulation
- Long term interest of the firm
Question 3.
Mention any two arguments against social responsibility of business.
Answer:
- Lack of Public Support
- Burden on customers
Question 4.
State any two responsibilities towards employee.
Answer:
- Proper incentives measures
- Promotional opportunities
Question 5.
What is environmental protection?
Answer:
Environmental protection is a practice of protecting the natural environment on individual, organisation controlled or governmental levels, for the benefit of both the environment and humans.
Question 6.
What is air pollution?
Answer:
Air pollution occurs when gases, dust particles, fames (or smoke) or odour are introduced into the atmosphere in a way that makes it harmful to humans, animals and plan
Question 7.
State any two needs for pollution control.
Answer:
- Improved public image
- Cost savings
Question 8.
Mention any two elements of business ethics.
Answer:
- Top management commitment
- Publication of a code
Five Marks Questions
Question 1.
What are the Responsibility of business Towards Investors
Answer:
- Shareholders who are the owners of business should be provided with correct information about company to enable them to give them true and fair position of the company to enable them to decide about farther investments.
- Company should provide a fair return on the investment made by shareholders. If shareholders do not get proper dividend then they will hesitate to invest additional funds in the concern.
- Shareholders should be kept fully informed about the working of the company for healthy growth of the business. The Companies Act 1956 also requires company to give fall disclosure in the published statements.
- Company should strengthen the share prices by its growth, innovation and diversification.
- At the same time shareholders shall also offer wholehearted support and co-operation to the company to protect their own interests.
Ten Marks Questions
Question 1.
What are the responsibilities of business towards Consumers?
Answer:
- Quality: The company should produce quality goods. The company should try to improve its quality because at not time quality can be 100%. There is always room for improvement of quality.
- Fair Prices: The customers should not be cheated by charging high prices. It is not possible to fool the customer at all the time. Thus, fair price convert a customer into a permanent customer.
- Honest Advertising: The customers want to know the facts, features, advantages, side effects, etc, of the product. The advertisement conveys this information. Thus, the company must see that the advertisement is not being misleading and it must be done by providing the true and actual information.
- After Sales Service: The company is expected to provide after sale service for maintenance of goods during the period of warranty. Efficient and effective after sale service helps to establish good relation between the customers and the company.
- Research and Development: The consumers require that the business organization must conduct research and development for the purpose of improving the quality and reducing the cost of production. That is, it must provide ISI or AGMARK products to the customers.
- Consumer’s Safety: The business must ensure that the product supplied will not adversely affect on the life and health of the customers. Unsafe product must not be marketed by the company.
- Regular Supply: Consumer should be supplied with the goods regularly as and when required by them The commercial organization should not create artificial shortage of goods.
- Attend Complaints: The consumer complaints must be attended to immediately.
- Avoid Monopolistic Competition: The commercial organization should avoid monopolistic competition in the interest of consumers.
- Training: The commercial organization should arrange to train the customers either free or for a fee. It must be in case of computers, etc.
Question 2.
What are the Responsibility of business Towards Government?
Answer:
The social responsibilities of a business organization towards government can be explained with the help of the following points:
- Observation of Rules and Regulation: The organization are required to follow the rules and regulations laid by the government in proper manner.
- Payment of Taxes: The business organizations must pay taxes and duties regularly to the government such as sales tax, income tax, octroi duty, custom duty, VAT, etc. Nonpayment of taxes is an offense because it would be difficult for the government to undertake development programs. .
- Assistance in Implementing Socio-Economic Policies: The government expects co-operation and help from the business sector to help in implementing programs and policies relating to social and economic development.
- Earning Foreign Exchange: The government also expects from business organization that it will earn foreign currency by exporting goods in the foreign market. The government requires this foreign currency for importing valuable and important products.
- Advising the Government: The business organization has to provide timely advice to the government in respect of framing important policies such as Industrial policy, Import & Export policy, Licensing policy, etc.
- No Favors: The commercial organization should not take any type of favor from government officials by bribing or influencing them
- Contributing to Government Treasury: The commercial organization must contribute the funds to government during the emergencies and natural calamities like floods, earthquakes, etc.
- Political Stability: Commercial organizations should work towards the political stability of the country. The stable government often brings more return and peace in a democratic country.
Question 3.
What are the responsibilities of business towards employees?
Answer:
Employees provide human resources to the organization. They are very important to the company. Therefore, the responsibilities of a business organization towards the employees should be fulfilled in proper manner because this will give a greater productivity to the oiganization. We have explained the responsibilities of a business organization towards employees in brief as follows:
- Meaningful Work and Job Satisfaction: In a country like India, the job opportunities are limited with a serious problem of unemployment. Therefore, to provide a good work, proper working conditions and job security are the social responsibilities of commercial organizations.
- Fair Returns: Workers should be paid sufficient wages and salaries, other incentives like bonus, medical allowance, traveling allowances, etc. Prompt payment to the workers, results in higher motivation to the work force.
- Best Physical and Mental Atmosphere: Fresh and decent working conditions, proper sanitary facilities, cool and fresh drinking water and etc. items are the essentials of employees. Therefore, by taking in to consideration these requirements, proper attention should be givento the facilities.
- Participation in the Management: The workers must be encouraged to take part in management by forming workers committee, suggestion scheme, profit sharing, co¬partnership, etc. It is an important responsibility of the commercial organization.
- Training, Promotion and Welfare Schemes: Modem business demands efficient and trained staff. Therefore, proper training should be provided to the employees. Welfare facilities like scholarship, transport facility, refreshment facility, games, etc. should also be provided to the employees so that they can complete the work in efficient manner.
- Recognition of Unions: Organizations should recognize workers right of forming union. It will help in maintaining industrial peace.
- Proper Personnel Policies: There must be proper personnel policies in respect of transfers, promotions, recruitment, training, etc. There should be no partiality in promotion, transfer or any other activity for the employees.
- Health and Safety Measures: The commercial organization should take adequate measures to protect health of the employees. They should be provided with proper canteen, medical and other facilities. ,
- Grievance Procedure: There should be proper grievance procedure to handle employee complaints. These are the social responsibilities of a business organization towards employees