Social Resposibility of Business. Department of Management
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1 Social Resposibility of Business Dr. Kavita Srivastava Department of Management ITS, Ghaziabad
2 Introduction Social responsibility of business refers to what the business does, over and above the statutory requirement, for the benefit of the society Responsibility connotes that the business has some moral Responsibility connotes that the business has some moral obligations towards the society
3 H.S. Singhania classifies the nature of the social responsibility of business into two categories : The manner in which a business carries out its own business activity The welfare activity that it takes upon itself as an additional function It can thus be said, that the economic consequences of any business action do not adversely affect the public or the society in general
4 Need for Social Responsibility Due to globalization of business and in order to establish a good corporate image, business includes a social responsibility s as corporate objective Very often social welfare is included during the collaboration agreements which necessitates the collaborating company to take up social responsibility of business. Corporate donations to social welfare projects of approved Corporate donations to social welfare projects of approved NGOs are exempted from income tax in India.
5 Social responsibility of business enables the organization to improve its product positioning and thereby improve its market share. The organizational culture of certain organizations makes it necessary for them to take up social cause as their moral responsibility.
6 CSR towards different Groups Responsibility to Shareholders: To protect the interests of the shareholders and employees, the primary aim of business is to remain in business. If a company fails to cope with the change in a changing and dynamic world, it becomes its responsibility that by means of innovation and growth, the company should consolidate and improve its position and help strengthen its share price. It is the endeavour of the company to ensure that its public image is such that the share holders can feel proud of their company.
7 Responsibility to employees Payment of fair wages Provision of best possible working conditions Opportunities for education, training and promotion Worker s participation p in decision-making Reasonable chances and proper system for accomplishment and promotion Establishments of fair working standards and norms Proper recognition, appreciation and encouragement of special skill and capability of the workers
8 Responsibility to consumers Research and development to improve quality and introduce better and new products Supply goods at reasonable prices To provide adequate after sales service To ensure that product sold has no adverse effect on the consumer To assure that problems of consumers are heard and redressed Understand the needs of customers and take steps to satisfy there needs. To avoid misleading advertisement To remove imperfection in the distribution systems
9 Responsibility towards the community To prevent environmental pollution and preserve ecological balance Provide maximum employment opportunity To conserve scarce resources and to develop alternatives, if possible Promotion of ancillary units and SSIs Rehabilitating the population displaced by operation of business, if any Development of Backward area Making possible contribution to promote education and population control
10 Responsibility towards government To abide by the laws of the Land To pay taxes honestly and in time To encourage and fair trade practices To avoid monopoly and concentration of economic power To avoid corruption
11 Arguments for Social Involvement of Business Business which survives at the resources of the society has responsibility towards society Social responsibilities like recycling of waste may have favorable financial effects Social involvement may discourage additional government regulation and intervention It will create a better image of company which may help in It will create a better image of company which may help in attracting customers, efficient personnel and investors
12 Arguments against CSR Business should confine to its own business. There are government and social organizations to carry out social activities actvtes It could adversely affect the economic health of the business(tisco) At times the cost of such activities is passed to the consumers At times companies involve in such activities for tax At times companies involve in such activities for tax exemptions
13 Thank you
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