by Tiwari Academy
NCERT Solutions for Class 11 Business Studies Chapter 6 Social Responsibilities of Business and Business Ethics. Study material with extra important questions in Hindi and English Medium are given in PDF file format to free download. Answers of long questions and short questions given in end exercises are given to study online. For suggestions and feedback, you are welcome on Tiwari Academy.
11th B St Chapter 6 Social Responsibilities of Business and Business Ethics
| ClassL 11 | Business Studies |
| Chapter: 6 | Social Responsibilities of Business and Business Ethics |
| Contents: | NCERT Solutions and Study Material |
Class 11 Business Studies Chapter 6 Solutions
Download Class 11 Business Studies Chapter 6 Study Material in Hindi and English
11th B St Chapter 6 Short Answer Questions
Social responsibility is an ethical framework and suggests that an individual has an obligation to act for the benefit of society at large. Social responsibility is a duty every individual has to perform so as to maintain a balance between the economy and the ecosystems. It refers to the obligations, duties and responsibilities of business enterprises towards society and its members. If a business makes use of society’s resources in the form of human and physical capital, it becomes the moral duty and responsibility to work for the betterment of society.
Social responsibility differs from legal responsibility on following aspects:
(a) Legal responsibility is compulsory under any of the laws, acts and constitution. Social responsibility is not backed by legal provisions.
(b) Social responsibility is broader than legal responsibility of business.
(c) Legal responsibility is mandatory while social responsibility is a choice.
What is environment? What is environmental pollution?
Environment encompasses all living and non living things around us which have an impact on our lives. It includes all surroundings and resources that affect our existence and quality of life. Pollution is the introduction of contaminants into the natural environment that causes adverse change. Pollution can take the form of chemical substances or energy, such as noise, heat or light. Pollutants, the components of pollution, can be either foreign substances and energies or naturally occurring contaminants. Rapid increase in population and industrialisation, the excessive use of resources has degraded and depleted the resources. Environmental pollution can be classified into the following four types: Air pollution, water pollution, land pollution and noise pollution.
What is business ethics? Mention the basic elements of business ethics?
Business ethics is a form of applied ethics or professional ethics, that examines ethical principles and moral or ethical problems that can arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations. It has a set of values and principles that govern the behaviour of individuals in an organisation. The main purpose of business ethics is to guide managers and other employees to perform their jobs in a manner that is socially acceptable.
The following are some of the elements of business ethics.
(a) Top management commitment
(b) Publication of a ‘code’.
(c) Establishment of compliance mechanism
(d) Involvement of employees at all levels
(e) Measurement of results
Briefly explain (a) Air pollution, (b) Water pollution and (c) Land pollution.
- (a) Air pollution: Air pollution occurs when harmful or excessive quantities of substances are introduced into Earth’s atmosphere. Sources of air pollution include gases, particulates, and biological molecules. Smoke and chemicals emitted by factories and vehicles degrade the air quality and causes air pollution.
- (b) Water pollution: Water pollution is the contamination of water bodies, usually as a result of human activities. Water bodies include for example lakes, rivers, oceans, aquifers and groundwater. Water pollution results when contaminants are introduced into the natural environment. Discharge of industrial and household wastes into rivers, streams or lakes causes degradation of the water quality.
- (c) Land pollution: This is caused due to the dumping of toxic material and wastes on land, which in turn damages the quality of land, making it unfit and unproductive for agriculture and crop plantation.
The following are the major areas of social responsibility of businesses.
- Economic responsibility: Business enterprises have the main objective of making profits. Therefore, it is the responsibility of every business enterprise to undertake economic activities such as producing goods and services according to the needs and wants of consumers and selling them at reasonable prices but still maintain the quality.
- Legal responsibility: Every business has to abide by the laws and regulations of the country in which it operates and should carry business activities lawfully.
- Ethical responsibility: The society also expects the business to fulfil all responsibilities not implemented by law. This includes respecting religious sentiments, producing quality products and working toward a better environment.
- Discretionary responsibility: This responsibility is completely voluntary in nature. It implies that a business enterprise may opt for charitable activities like opening a charitable school or hospital for the poor, grant aid to people affected by natural calamities etc.
State the meaning of Corporate Social Responsibility as per the Companies Act 2013.
Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public. By practicing corporate social responsibility, also called corporate citizenship, companies can be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental. The Corporate Social Responsibility in India as governed by the Companies Act, 2013 (under Clause 135) applies to those companies which have an annual turnover of ₹1,000 crore and more, or those having a net worth of ₹500 crore and more, or a net profit of ₹5 crore and more. To engage in CSR means that, in the ordinary course of business, a company is operating in ways that contribute towards betterment of society and the environment, instead of contributing negatively to them.
11th B. St. Chapter 6 Long Answer Questions
The case in favour of taking up social responsibilities
(a) Existence and growth: Business enterprises exist to make profits by providing goods and services to consumers. Thus, we can say that their long-term growth prospect depends not only on their profits but also on how efficiently they serve society. Therefore, taking up social responsibilities supports the existence and growth of a business enterprise.
(b) Avoidance of government intervention: Business enterprises should always work in line with society’s values and ethics. This would help them fulfil their social responsibilities, which in turn would make them less prone to government intervention.
(c) Better environment for doing business: Businesses make use of society’s resource of human capital. Thus, by providing employment to people, they help solve the social problem of unemployment and poverty, thereby creating a favourable environment for business.
(d) Resources available to business: The business has all the financial and human resources available to cope up with the problems faced by it.
(e) Opportunity cost: Business can take up social problems and convert it into opportunities to generate gain in future.
The case against taking up social responsibilities
(a) Violation of profit maximisation objectives: It is argued that a business enterprise exists to make a profit. Thus, if it engages itself in solving social problems, then it may not have enough resources to meet its primary objective of profit maximisation.
(b) Burden on consumers: It is argued that when a business enterprise is engaged in solving social problems such as environment pollution and unemployment, its expenditures increase. This increased financial burden is ultimately passed on to the consumers in the forms of higher prices of products.
(c) Lack of social skills: Businesspersons are basically trained to solve business-related problems such as minimising cost, maximising profits and increasing sales. However, they are not specialised in solving social problems. Thus, it is argued that social problems must be solved only by specialised agencies, which have the required training and skills.
The following are the forces which are responsible for increasing the concern of business enterprises for social responsibility.
(a) Threat of public regulation: The interest of general public is to be safeguarded by the government. Thus, if a business is not socially morale towards society, then it can regulate the operations of that enterprise accordingly.
(b) Pressure of labour movement: The increase in capital mobility over time has increased the pressure on business enterprises to pay attention to the welfare of workers, by providing them with healthy working conditions along with good remuneration.
(c) Impact of consumer consciousness: Consumers education has led to a change in the mindset as consumers today are aware of their rights and responsibilities. Therefore, business enterprises need to be more efficient and productive to satisfy their customers.
(d) Development of social standards: Business these days are not just profit oriented. For their long-term survival and growth, they need to fulfil the new standards of social welfare.
(e) Development of business education: The spread of education over time has made consumers, investors, employees and owners more of social problems, thereby making them more sensitive to social issues.
(f) Relationship between social interest and business interest: There is a need to maintain the correct balance between social and business interest. Profitability and social responsibility go hand in hand. No business enterprise can work in isolation from society and can grow by doing the maximum good to society.
(g) Development of a professional managerial class: The core objective of profit maximization was a traditional aspect. But today’s professional managers make efforts to satisfy the interests of all members of society.
The core objective of any business enterprise is profit maximisation. Profit acts as a measure of success and growth of a business. Also, retained profits can be used to finance the expansion projects of a business enterprise. However, it is argued that business enterprises are not mere profit-making entities. They are considered as social institutions, too, as they are created by society and have a duty to fulfil towards the society for using up all resources. Business makes human and physical resources and works in tandem with the society. Thus, a need arises to create a balance between the business interests and social interests of a business enterprise, such that it can grow by doing the maximum good to society. Hence, we say that a business enterprise is a social institution and not merely a profit-making entity. In this regard, there are some of the responsibilities that must be fulfilled by an enterprise like paying taxes on time, paying fair wages to employees, supplying quality products at reasonable prices to customers
Why do the business enterprises need to adopt pollution control measures?
Pollution control is a term used in environmental management. It means the control of emissions and effluents into air, water or soil. Without pollution control, the waste products from overconsumption, heating, agriculture, mining, manufacturing, transportation and other human activities, whether they accumulate or disperse, will degrade the environment. Pollution control is necessary for preserving and improving the quality of environmental resources. The following are some of the reasons why business enterprises need to adopt pollution control measures.
- (a) Reduced health hazards: Pollutants in the environment can be a reason for hazardous diseases such as cancers and respiratory problems. Thus, pollution control measures will help in reducing the level of diseases and lead to a healthy life.
- (b) Reduced risk of liability: Heavy penalties are levied to enterprises that are held responsible for polluting the environment and are asked to compensate. Pollution control mitigates the risk of such liabilities.
- (c) Cost savings: The government is taking up initiative to help firms implement efficient pollution control mechanisms to reduce the cost of waste disposal and the cost of cleaning up production plants. This in turn helps firms to reduce their costs.
- (d) Improved public image: An increase in the education level has made people more aware about environmental problems. As a result, they have started realising the need to protect the environment. Thus, business enterprises which adopt pollution control measures enjoy a good reputation in society.
- (e) Other social benefits: Pollution control is not only beneficial for the society but for a business itself as it enjoys various other benefits such as cleaner surroundings, better quality of life for its employees.
What steps can an enterprise take to protect the environment from the dangers of pollution?
Various business activities such as production, transportation and consumption of goods often result in overexploitation of natural resources and it becomes the responsibility of every business enterprise to contribute toward environment healing. The following steps can be taken by the business enterprises to control pollution.
- Top level commitment: The top management should be committed towards spreading awareness in employees creating, developing and maintaining a framework for environmental protection and pollution prevention.
- Commitment by employees: Employees should follow the footsteps of top management and should be committed to keeping the environment clean and protected.
- Better technology: Enterprises should avoid cheap resources that cause harm to the environment and employ environment effective technologies of production. The waste management should be a priority for enterprises. This will ensure environment protection and pollution control.
- Rules and regulations: Enterprises must abide by the rules and regulations laid by the government for the prevention of environmental pollution. They must also encourage the implementation of rules within work culture.
- Awareness and Assessment: By conducting workshops and training programmes, business enterprises must make an effort to spread awareness. It should conduct periodic assessment of employees and the ethics followed to conserve the environment.
- Active participation: All levels of management should actively participate in government programs relating to pollution control. An enterprise must also indulge in programmes for tree plantation etc to help environment heal.
Explain the various elements of business ethics?
Business ethics is a form of applied ethics or professional ethics, that examines ethical principles and moral or ethical problems that can arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations. It has a set of values and principles that govern the behaviour of individuals in an organisation. The main purpose of business ethics is to guide managers and other employees to perform their jobs in a manner that is socially acceptable.
The following are some of the elements of business ethics.
- Commitment by top management: Top-level personnel, such as the CEO’s, Vice President and other higher level managers, must positively follow the ethical code of conduct. They should be a role model for other employees in their organisation in adopting the code.
- Publication of a “code”: An enterprise must clearly lay down the ethical code of conduct and behaviour to be followed in the organisation by all the members working in it. The code should also include quality standards for work, laws governing production and employee health and safety standards.
- Establishment of compliance mechanism: There should be a proper channel or mechanism to ensure the code is duly followed by all individual. It can measure the actions of individual employees. This should be done in order to confirm whether the ethical standards are being met.
- Involvement of employees at all levels: The successful implementation of ethical standards depends to a large extent on the involvement of employees at different levels. This is because it is the employees who actually implement the ethical codes.
- Measurement of results: Measuring the implementation of ethical standards is a tedious task and the top management should take initiative to monitor compliance. Also, there must be a zero tolerance policy and management must take serious action against any unethical behaviour in the organisation.
