SOCIAL RESPONSIBILITY

SOCIAL RESPONSIBILITY OF BUSINESS : 

SOCIAL RESPONSIBILITY OF BUSINESS It is the manger’s responsiveness to public consensus. – Adolph Berle. It means there cannot be a set of SR applicable to all countries in all times. It will depend on the customs, religion, tradition, level of industrialization and so on. According to Keith Davis, SR refers to two types of business obligations. Socio economic obligation means actions of the organization should not affect the public welfare. Socio human obligation means nurture and development of human values.

DIFFERENT VIEWS ON SR : 

DIFFERENT VIEWS ON SR Communist view: They are suggesting imposition of social responsibilities on business through laws of the states as organization will not satisfy the society if not levied on them by force. Capitalist view: Businessmen should go with the business of producing quality goods & services efficiently and leave the solution of social problems to the government.

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Pragmatic view: First earn money and then the organization should focus on SR. because a loss making organization is actually social problem of the society. So development of the organization comes first rather than the SR. Trusteeship view: It says that earn lots of money but do remember that your wealth is not yours; it belongs to the people. The view was influenced by GITA teaching of APARIGRAHA (non-possession) and SAMBHAWA (equalism).

SR OF BUSINESS TOWARDS DIFFERENT GROUPS : 

SR OF BUSINESS TOWARDS DIFFERENT GROUPS Towards the consumers and the community: With the help of creativity, innovation, technology provide cheap and quality product & services to their customers. Deciding priorities of production in the country’s interest & conserving natural resources. Misleading ads, misbranding of articles with respect to their material, quality, origin etc., selling second hand goods, cartels of the companies, false claims should be stopped. Preventing the creation of monopolies. Providing after sales service & Eco-friendly production. Achieving better PR & supporting education, slum clearance etc.

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Towards Employees and Workers: A fair wage to workers as per the standard norms of the industry and the government. Smooth selection process without any kind of discrimination on grounds of sex, race, religion & physical appearance. Security of job and good quality work life. Participative management. Freedom, self – respect, self – realizations. Providing the opportunities for creative talent and incentives.

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Towards Shareholders and other Businesses: Should have the internal accountability and transparency. Fairness in relations with competitors i.e. competition on some ethics and fair play. Towards the state: To bring the harmony between limited enterprise and wider social interest of the country. Avoid active participation in and identification with political party. To provide the safeguard against the misbehaving business practices. To implement rural uplift and secure balanced development of the country. Maintaining equality of resource allocation and enforce distributive justice.

SOCIAL PERFORMANCE OF BUSINESS IN INDIA : 

SOCIAL PERFORMANCE OF BUSINESS IN INDIA ITC afforesting private degraded land to increase the supply of raw material for its paper factory. ITC is giving some revenue part to the welfare of child education when the customer purchase a note book of ITC. Nestle providing financial and technical assistance for constructing deep-bore well to the milk suppliers at Moga, Punjab. Cadbury India, Glaxo, Richardson Hindustan are helping the farmers to grow crops which serve as a raw material for them.

BUSINESS ETHICS AND CORPORATE GOVERNANCE : 

BUSINESS ETHICS AND CORPORATE GOVERNANCE BUSINESS ETHICS: It is the application of moral principles to business problems. Four factors which decides whether the work is ethical or unethical; Government Legislation. Business code. For e.g. competition, quality etc. Pressure groups. Personal values of a manager.

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CORPORATE GOVERNANCE: It is the extent to which companies run in an open and honest manner in the best interest of their stake holders. After the corporate scandal in the early 1990s in Britain, under the chairmanship of Sir Adrian Cadbury, the committee has recommended a code for best corporate governance; Non-executive directors for independent judgment on strategy, performance, resources etc. Non-executive committee for remuneration part of directors. Non-executive committee for financial management. Audit partners should be rotated.

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BENEFITS OF CORPORATE GOVERNANCE: Creates overall market confidence. Leads to increase company’s market share. Limits the liability of top management. Improves strategic thinking. Trust on financial report of the company.

CORPORATE GOVERNANCE IN INDIA : 

CORPORATE GOVERNANCE IN INDIA Only 16% of all the listed companies are paying dividends to their shareholders. Still 90% of the companies are not considering the shareholder values. Focus is more on earning profit rather social development. Still company profit used for personal purpose more. For e.g. Satyam. Top Companies of India known for its Corporate Governance: Infosys, Tata Group, Wipro, HDFC, Reliance, ITC, Ranbaxy, HUL, Hero Honda, L&T, SBI, Bajaj, ONGC.