Social responsibility

of a
Business Manager

Submitted by: Sumaira Kalsoom

Roll no:
Submitted to: Sir Mateen
Book: Marketing Theory
Code: 5534
Course: MBA

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 Table of Contents

Contents Page No

Dedication 03

Executive Summary 04

Introduction of topic 04

Practical Review of Company 07

application of topic 08

SWOT Analysis 09

recommendations 10

References 11

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 DEDICATION

This report is dedicated to the greatest man in the world that shows us the right path. Who is the

great patron of the mankind that is Holy Prophet Hazrat Mohammad (Peace Be
upon Him).

I would also like to dedicate this small effort of extract to my Parents and Teachers. They have
always been a shining star to look upon, to give light and to show me the directions whenever
I am lost. May Allah give them more strength and long life to guide me forever. Ameen

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 Social responsibility of a Business Manager

Introduction to issue

Social responsibility of a business managers is an ethical or ideological theory that an entity

whether it is a government corporation , organization or has a responsibility to society While
primarily associated with business and governmental practices, activist groups and local
communities can also be associated with social responsibility, not only business or governmental
entities.

Social Responsibilities of Management

The term social responsibilities can be defined as the obligation of management towards the
society and others concerned.
Reason for Social Responsibilities: Business enterprises are creatures of society and should
respond to the demands of society. If the management does not react to changes in social
demands, the society will either force them to do so through laws or will not permit the enterprise
to survive. Therefore the long term interests of business are best served when management
assume social responsibilities. The image of business organization liked with the quality of its
products and customer service and the extent to which it fulfills the expectations of owners,
employees, consumers, government and the community at large. For longterm success it matters
a great deal if the firm has a favorable image in the public mind. Every business enterprise is a
organ of society and its activities have impact on the social scene. Therefore, it is important for
management to consider whether their policies and actions are likely to promote the public good,
advances the basic values of society, and constitute to its stability, strength and harmony.
Increasing concern for the social responsibility of management, it is now recognized that besides
taking care of the financial interest of owners, managers of business firms must also take into
account the interest of various other groups such as employees, consumers, the government and
the community as a whole. These interested groups are directly or indirectly affected by the pursuit
of business activities and they are the stake-holders of the business enterprise.

Responsibility towards owners: The primary responsibilities of management is to assure a fair

and reasonable rate of return on capital and fair return on investment can be determined on the
basis of difference in the risks of business in different fields of activity. With the growth of business
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the shareholders can also expect appreciation in the value of their capital.

Responsibility towards employees: Management responsibility towards employees relate to the

fair wages and salaries, satisfactory work environment, labour management relations and
employee welfare. Fair wages should be fixed in the light of labor productivity, the prevailing wage
rates in the same or neighbouring areas and relative importance of jobs. Managers salaries and
allowances are expected to be linked with their responsibility, initiative and skill. But the spread
between minimum wages and highest salaries should be reasonable. Employees are expected to
build up and maintain harmonious relationships between superior and subordinates. Another
aspect of responsibility towards employees is the provision of welfare amenities like safety and
security of working conditions, medical facilities, housing, canteen, leave and retirement benefits.
Responsibility towards consumers:
In a competitive market, serving consumers is supposed to be a prime concern of management.
But in reality perfect competition does not prevail in all product markets. In the event of shortage of
supply there is no automatic correction. Besides consumers are often victims of unfair trade
practices and unethical conduct of business. Consumer interests are thus protected to some
extent with laws and pressure of organized consumer groups. Management should anticipate
these developments, satisfy consumer needs and protect consumer interests. Goods must be of
appropriate standard and quality and be available in adequate quantities at reasonable prices.
Management should avoid resorting to hoarding or creating artificial scarcity as well as false and
misleading advertisements.
Responsibility towards the Governments: As a part of their social responsibility, management must
conduct business affair in lawful manner, honestly pay all the taxes and dues, and should not
corrupt public officials for selfish ends. Business activities must also confirm to the economic and
social policies of the government.
Responsibility towards the community and society:
The socially responsible role of management in relation to the community are expected to be
revealed by its policies with respect to the employment of handicapped persons, and weaker
sections of the community, environmental protection, pollution control, setting up industries in
backward areas, and providing relief to the victims of natural calamities etc.

Social Responsibility as a growing trend:

Here we are dealing with another aspect of the work of directing and managing,
namely the relationship which directors and managers have with the community in
which they live and work, of which they are a part.

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Decisions taken by directors and managers affect the community, affect the quality of
life and indeed the safety of health and life of the people in a widening area.
We already defined responsibility by saying that
When I give a person work to do, I hold him accountable for the way in which
he does it, i.e. he is responsible to me. This is the meaning of responsibility.

Hence when we are talking about the 'social responsibilities of directors and
managers' then we are talking about their responsibilities towards society, i.e.
towards the community.

What we are saying is that the purpose of enterprises is to satisfy the needs of the
community and that in the end directors and managers are working for the
community and that they are accountable to the community for the way in which this
work is done.

In other words, directors and managers are responsible to the community for what
they do, are accountable to the community for the results of their work and for the
way in which such results are achieved.

Again, this is one end of a scale. It is the 'participative' end of the scale and describes
the relationship between the community and its leadership. To understand the point
of balance in the many organizations which are neither at one extreme nor the other,
we again need to look at the other extreme end of the scale.

In theory the 'profit motive' and 'free competition' are supposed to direct effort into
areas and directions most needed by the community. In practice it is only
infrequently that we have a free market in which prices for needed goods and
services are freely determined by supply and demand. Oil prices are determined by
what the producers can persuade the customers to pay and the oil producers consult
with each other about what to charge next and in this way bring pressure to bear on
their customers. Solicitors not only lay down the scale of fees for convincing but in
addition exclude competition by preventing others from doing the same work. Prices
for goods tend not to be the cost of production plus a reasonable margin but tend to
be determined by what one can persuade people to pay for what one can persuade
them to buy. And demand can be manipulated by the mass media.

In practice directors are required by law to act first and foremost in the interests of
the owners so that it is profit which is maximised. At this end of the scale, profit is
maximised regardless of the cost to others, i.e. regardless of the cost to the
community. Since it is long-term profits which are being maximised, profits are
maximised regardless of the cost to the community but only to the extent of the
likelihood of repercussions.

Thus we now need to consider how to assess the work of directors and managers
from the point of view of the extent to which their work either serves or harms the
community.

Hence we now look at some major problems and disasters which have already taken
place as the result of preoccupation with profit regardless of the cost to the
community and draw some relevant conclusions.

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 Introduction

Bank Islamic is incorporated on October 18, 2004 in Pakistan. The epochal idea of
BankIslami was conceptualized by Jahangir Siddiqui & Company Limited and DCD Group in late
2003. Mr. Hasan A. Bilgrami was appointed as Adviser to the sponsors on March 16, 2004 to
formalize the idea. He presented the concept paper of BankIslami to sponsors on March 24, 2004.
A detailed business plan was then prepared and a formal application was submitted to the State
Bank of Pakistan on May 26, 2004. On September 26, 2005, Dubai Bank joined the Sponsors and
became one of the founding shareholders of BankIslami by investing 18.75% in the total Capital.

BankIslami Pakistan Limited was the first Bank to receive the Islamic Banking license under the
Islamic Banking policy of 2003 on March 31, 2005. The Bank envisioned to focus primarily on
Wealth Management as the core area of business in addition to Shariah compliant Retail Banking
products, Proprietary and Third party products, and Integrated financial planning services.

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 Social Responsibility of a Business Manager of Islamic Bank

The term social responsibilities can be defined as the obligation of manager or business
towards the society and others concerned. He told me that manager social responsibilities
also include the responsibilities towards owner, responsibilities towards employees,
responsibilities towards consumers, responsibilities towards government, responsibilities
towards community and society.

Responsibilities towards employees:

Managers responsibility towards employees relate to the fair wages and salaries, satisfactory work
environment, labour management relations and employee welfare. Fair wages should be fixed in
the light of labor productivity, the prevailing wage rates in the same or neighboring areas and
relative importance of jobs. Employees are expected to build up and maintain harmonious
relationships between superior and subordinates. Another aspect of responsibility towards
employees is the provision of welfare amenities like safety and security of working conditions,
medical facilities, and housing, canteen, leave and retirement benefits.

Responsibility towards consumers:

In a competitive market, serving consumers is supposed to be a prime concern of management.

But in reality perfect competition does not prevail in all product markets. In the event of shortage of
supply there is no automatic correction. Besides consumers are often victims of unfair trade
practices and unethical conduct of business. Consumer interests are thus protected to some
extent with laws and pressure of organized consumer groups. Management should anticipate
these developments, satisfy consumer needs and protect consumer interests. Goods must be of
appropriate standard and quality and be available in adequate quantities at reasonable prices.
Management should avoid resorting to hoarding or creating artificial scarcity as well as false and
misleading advertisements

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Responsibility towards the community and society:

The socially responsible role of management in relation to the community are expected to be
revealed by its policies with respect to the employment of handicapped persons, and weaker
sections of the community, environmental protection, pollution control, setting up industries in
backward areas, and providing relief to the victims of natural calamities etc.

SWOT Analysis

Strengths

• Internet Banking
• Phone Banking
• Verity of Products
• Bio-Metric ATM facility

Weaknesses

• Credit cards
• Less Marketing
• Lacking in number of branches

Opportunities

• An emerging market
• Innovation

Threats

• Political Situation

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 • Lots of banks are coming in market

Conclusion
Growth and development of any organization depends upon the strategies planed by the
management and implementation of these strategies. Bank Islamic is established and
incorporated taking into account the golden Islamic rules. And Pakistan is an Islamic country and
the market is very good for the business which is incorporated under Islamic rules. Bank Islamic is
mostly focusing on retail banking, consumer banking, corporate banking, investment banking and
also provide fantastic value added service which are keep to attract customer. Islamic bank is
highly focusing on developing and generating revenue by adding new customer. Bio-Metric ATM is
new induction in Islamic banking system in Pakistan which means they are doing lot for growth.

Proposal/ Recommendations
• Markup should only be deducted to increase socio economic activities.
• It should be completely Riba free.
• There should be more branches in Pakistan.
• There should be more products in Islami bank.
• Rule must be according to the real teachings of Islam and should be approved by
authentic religious personalities whose authentications are accepted all over the world.
• Number of schemes in Islamic banking should be increased.
• Bank Islamic should increase their marketing and advertisements.
• Improve the skills of bankers through training.
• Media coverage and conferences regarding Islamic banking should be increased.
• It is necessary to brief the people about the Islamic banking.
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 Reference
I have consulted following references to prepare this report.

a. Book by Stephen P. Robbins. Mary Coulter

b. www.bankislami.com.pk
c. Get idea form class lecture
d. www.wikipedia.com. (For any kind of information and definition)
e. Group discussion

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