Economic Analysis (Final)

Economic Analysis - 0522
Allama Iqbal Open University

Islamabad
In Partial Fulfillment of
Report on
Social Responsibility of Managers
Submitted by:
Muhammad Yasir Aftab
Roll No. AH504692
Submitted to:
Sir, Ghazanfar Mehmood Bhatti
Date: 31-Oct-10
Page 1 of 28
PRAISE TO ALLAH
“LORD OF THE LORDS, THE COMPASSIONATE,
THE MERCIFUL,
MASTER OF THE DAY JUDGEMENT!
YOU ALONE WE WORSHIP.
AND TO YOU ALONE WE LOOK FOR HELP
THOUSANDS OF SALAM TO HOLY
PROPHET HAZRAT MUHAMMAD
(SALALLAH - O –ALE HAY WSSALAM)
Page 2 of 28
DEDICATED
TO MY
EVER LOVING PARENTS
Page 3 of 28
PREFACE
　
Business environments are becoming more and more

complex with the passage of time. To understand and
deal with such riddle phenomena, one needs a lot of
energy and knowledge. So business education has
become an evolving science, which helps to solve the
business problems. Academic education provides general
knowledge about business decision and policies.
Economic analysis– as an integral part of MBA (Financial

Management) provides the opportunity of peeping into
real professional life of the business people. It enables us
to evaluate and understand the practical application of all
the terms & techniques that we have studied during our
course work.
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ACKNOWLEDGEMENTS
Praises to Almighty ALLAH, who bested upon me the

potential and ability to accomplish the task of the work.
Salaam to Holy Prophet Hazrat Muhammad (S.A.A.W).
I wish to express deep sense of gratitude to my elder

brother for his friendly behavior and his keen interest.
His kind advises and guidance helped me through out the
progress of this report.
I would like to thank all persons for their contribution and

coordination in completion of this work. They provided
very beneficial information, which increased my
knowledge.
Sincerely hope that everybody will like my work. Give

100% in everything that you do!
Muhammad Yasir Aftab
Page 5 of 28
TABLE OF CONTENTS
I. Introduction – What is Social Responsibilities ..............

Page 7
(Main idea & basis of Thesis Statement)
a. Manager by chance or by choice? (supporting idea)
b. Reason for Social Responsibilities (supporting idea)
II. Social Responsibilities of Manager .............

Page 10
a. Social Responsiveness (supporting idea)
b. Key Issues (supporting idea)
III. Arguments for assuming Social Responsibilities .............

Page 12
IV. Arguments against for assuming Social Responsibilities .............

Page 12
V. Social Audit: What is it??? .............

Page 13
VI. Obligations of Managers…. ............. Page 13
VII. Responsibility towards owners .............

Page 13
VIII Responsibility towards employees .............

Page 14
IX Responsibility towards consumers .............

Page 14
X Responsibility towards the Governments .............

Page 15
XI Responsibility towards the community and society .............

Page 15
XII Ethics ............. Page 15
XIII 3 ways of institutionalizing Ethics .............

Page 17
XIV Code of Ethics .............

Page 17
XV Importance of implementing ethics through Formal Committees

..........Page 17
XVI Case Study ............. Page 18
Page 6 of 28
XVII Summary .............

Page 22
XVIII Recommendations .............

Page 23
XIX Annex ............. Page 26
XX References ............. Page 27
Page 7 of 28
Social Responsibilities of Managers:
Hey Look at me….will u b a

manager like me??
Page 8 of 28
Are you a manager by chance or by choice?
The reason I ask this is because most managers become

managers only by a matter of their vertical growth (by
chance) in the organization and not necessarily because
they can manage people well or that’s what they’d like to
do (by choice).
I believe that most people are not prepared for the

transition from managing self to managing others. Being
successful as an individual is no measure of success for
being successful as a manager. And I have seen several
failures where the past glories and successes of
individual contributors could not be replicated once they
had a team to look after. It seemed as if they lost their
own edge and couldn’t do a good job at getting others to
perform either!
Good managers never shy away from taking responsibility

and being accountable for their actions – no matter how
good or bad. They are ready to face the consequences,
accept mistakes, and learn from their actions. Their teams
are able to follow the same.
Here we will discuss about some social responsibilities

which a manager must have.
Social responsibility:
The term social responsibilities can be
defined as the obligation of management
towards the society and others
concerned.
Page 9 of 28
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 long term success it
matters a great deal if the firm has a favourable image in
the public mind. Every business enterprise is an 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.
Page 10 of 28
Social responsibility of managers…
 Corporate Social Responsibility:
Corporate social responsibility

is involved with the impact of the
company’s actions on the society.
 Social Responsiveness:
Social responsiveness means the

ability of a corporation to relate
its operations & policies to the
social environment in ways that are
mutually beneficial to the company and to the society.
Key Issues:
 Impact of Social Responsibility on Profits
 Are Social Obligations in Conflict with profit

Objectives
Page 11 of 28
Management & the Society…
Technological Economic
ORGANIZATION
Ethical
Social
Politico-Legal
Page 12 of 28
Page 13 of 28
Social Involvement of Business
 Business have had received its charter from the

society & consequently has to respond to the needs of
the society.
 Society gains through employment opportunities, better
economy; whereas business benefits from a better
community ( community is the source of workforce & the
consumer of its products & services)
 Modern society is an interdependent system, & the
internal activities of the enterprise have an impact
on the external environment.
Arguments for assuming Social Responsibilities
 Use of Society’s Resources

 Long-term Business Interest
 Moral justification
 Better public Image
 Conscious Customers
Arguments against assuming Social Responsibilities
 Conflicting considerations
 Arbitrary Power
 Disregard of Market Mechanisms
 Responsibility of the Govt.
Social Involvement of Business
 Social involvement may be involved with the interest

of the stockholders.
 Social involvement creates a favorable public image.
 Social involvement discourages additional government
regulations and interventions. The result is greater
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freedom and more flexibility in decision making for

the business.
Social Audit: What is it???

Social Audit can be defined as a commitment to the
systematic assessment of and reporting on some meaningful,
definable domain of the organization’s activities that
have social impact.
Types of Social Audits:
• One is required by the Government & involves, for

example, pollution control, product performance
requirements, and equal employment Standards.
• The other kind of social audit concerns a great
variety of voluntary social programs.
Obligations of Managers….
Responsibility towards owners:
Page 15 of 28
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 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.
Page 16 of 28
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.
Ethics in effective managing
Ethics can be defined as the

discipline dealing with what is good &
Page 17 of 28
bad and with rules by which an individual lives his or her

personal life.
Ethics and Business Ethics are quite different animals and

there is a fine line to business ethics. Business ethics
is a form of applied ethics that examines ethical
principles and moral or ethical problems that arise in a
business environment.
In the increasingly conscience-focused marketplaces of the

21st century, the demand for more ethical business
processes and actions (known as ethicism) is increasing.
[1] Simultaneously, pressure is applied on industry to
improve business ethics through new public initiatives and
laws (e.g. higher UK road tax for higher-emission
vehicles).[2]Business ethics can be both a normative and a
descriptive discipline. As a corporate practice and a
career specialization, the field is primarily normative.
In academia descriptive approaches are also taken. The
range and quantity of business ethical issues reflects the
degree to which business is perceived to be at odds with
non-economic social values. Historically, interest in
business ethics accelerated dramatically during the 1980s
and 1990s, both within major corporations and within
academia. For example, today most major corporate websites
lay emphasis on commitment to promoting non-economic
social values under a variety of headings (e.g. ethics
codes, social responsibility charters). In some cases,
corporations have redefined their core values in the light
of business ethical considerations (e.g. BP's "beyond
petroleum" environmental tilt).
Page 18 of 28
3 ways of institutionalizing Ethics

 By establishing appropriate company policy or a “code
of ethics”.
 By using a formally appointed ethics committee.
 By teaching & training ethics in management
development programs.
Code of Ethics
 Code of ethics refers to a statement of principles, or
rules that guide ethical behavior in an organization.
 Code of ethics does not only apply to business
organizations; they should guide the behavior of
persons in all organizations and in everyday life.
Importance of implementing ethics through Formal

Committees:
Functions of an ethics committee may include:
 Holding regular meetings to discuss ethical issues.
 Dealing with “Grey Areas”

 Communicating the code of ethics to all members of the
organization
 Checking for possible violations of the code of
ethics.
 Enforcing the code of ethics.
 Rewarding compliance & punishing violations.

 Reviewing and updating the code of ethics.
Page 19 of 28
 Reporting activities of the ethics committee to the

board of directors of the organization.
CASE Study on Toyota Rawal Motors (Pvt) Ltd
Company Profile:
Toyota Rawal Motors (Pvt) Ltd is one of the dealerships of

Indus Motor Company and was established in 1993 in
Rawalpindi to cover Rawalpindi and adjacent areas. It is
the largest dealership (area wise) in the country with
state of the art showroom and a covered workshop, which
has the capacity to repair 36 vehicles simultaneously and
with a large parking area specially diversified for
visitors parking, new vehicles parking and
workshop parking. Toyota Rawal Motors (Pvt)
Ltd. has a vast customer base, consists of
individuals as well as Departments in
Government, Semi-Government and Private
Sector.
Page 20 of 28
Mr. Muhammad Waqas Kiani:

Mr. Waqas Kiani is working with Toyota Rawal Motors (Pvt)
Ltd since 5 years. He is a young and energetic master
degree holder in MBA (HR).
Designation:
Manager (HR)
Meet the Manager:
What is the relation between Fun and work? What do you

think is most important for the growth of the company?
I describe it as ‘FUN In Work’, i.e. how much you enjoy in

doing your work or task at your work place and this is
most important. and then you can achieve Fun @ work as
well in its real sense.
What are your pet peeves?
Overflowing paper trays on employee’s desks, this is a

clear indicator either a performance gap problem where the
employee should have his/her duties performance measured
to address the gap or it could indicate a work overload
where the employee has been allocated too many duties for
him/her to realistically perform in the course of the
day/week/year.
Why did you choose HR? Why do want to make your career in
HR?
To be a good HR person we need to have excellent

interpersonal skills, good friendly attitude, decision-
making skills etc.
Page 21 of 28
I am a person who enjoys interacting with different levels

of people. I believe l this is a basic requisite for any
HR Personnel.
In addition, I believe I can excel even in people

management and hence HR is the right field where I can
utilize my skills.
“Customer is a key, or key is a customer,”?
Customer is important for any organization because without

them no business is possible.
Key is customer because they contribute in business by

word of publicity. If they are satisfied, they spread
their experience and this may increase the customers. In
case, if they are not satisfied, we may lose customers.
What is Employee Retention? Keeping your key, quality

employees happily so that, the company would not lose them
to the peer, competitive companies.
What is more important to you: the money or the work?
Money and work both are like siblings. However, I believe

that when you work hard, you could earn more. Therefore,
work is more important than money. It is the hard work
that can help you put another feather in your success cap.
What is your ability to work under pressure?
I have always enjoyed working under pressure. It is like a

tonic, which boosts me, but I always keep it under control
so it does not take a toll on me.
Page 22 of 28
Describe your management style.
1. To be sincere and honest at work.

2. Not to involve in subordinate’s personal matters.
3. To provide a friendly environment (Prioritizing the
work)
What have you learned from mistakes on the job?
Making mistakes is of human nature but feeling guilty of

the mistake or feeling sorry will be the waste of time.
Hence I was advised by my supervisor that we need to learn
from the mistakes and do not repeat it. Therefore, I
realize my mistake and I do not repeat them.
Do you have any blind spots?
I would say everyone has blind spots, and I would too.

Hence, I believe in teamwork, because when you are a part
of a team, you can point out other people’s blind spots
and they will do the same for you.
Do not be too specific of your actual weakness. Instead,

try to bring out that you are very team oriented.
What qualities do you look for in a boss?
The main thing that I feel is at no point of time; I

should feel like I have nothing to learn from him (either
professionally or personally).
Describe your work ethic.
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Work should give satisfaction to the people. If the person

is satisfied with the work, he can perform more, it
reflects in the growth of the organization as well as
individuals.
SUMMARY
How important is it for organizations and managers to be

socially responsible and ethical? In this report, we have
seen that what it means to be socially responsible and
ethical and what role managers play in it. But sometimes,
no matter how hard we try, we can not solve every
situation.
Page 24 of 28
RECOMMENDATIONS
Management responsibility towards employees relate to the

fair wages and salaries, satisfactory work environment,
labor management relations and employee welfare. Fair
wages should be fixed in the light of labor productivity,
the prevailing wage rates and importance of jobs. The
spread between minimum wages and highest salaries should
be reasonable.
Consumers are often victims of unfair trade practices.

Spare Parts 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.
Management must conduct business affair in lawful manner,

honestly pay all the taxes and dues, and should not
corrupt public officials for selfish ends. Management
social responsibility is 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.
The recommendation for socially responsible managers

includes the description as 'one that visibly takes part
in society and reaches beyond the core business and
minimal requirements imposed by law, all of which
translates into added value for the company and society'.
Page 25 of 28
Consciously focusing business activities on the creation

of value in three dimensions: not only in financial-
economic quantities, such as profitability and market
value, but also in an ecological as well as a social
sense. This means that a company allows operating profits
to be guided at each of these dimensions, known
collectively as the Triple P bottom-line:
Profit - the creation of goods and services, profit as a

measuring stick for resulting social appreciation.
People - the consequences for people, in and outside of

the company.
Planet: the effects on the environment.
Page 26 of 28
ANNEX
EXAMPLE OF CORPORATE SOCIAL RESPONSIBILITY
1. Tyson Foods offers an example of a major company tying

its corporate social responsibility efforts to its core
mission. Tyson has committed its brand to efforts to
relieve and ultimately end childhood hunger, and in the
past few years been integrating social media into its
hunger relief efforts.
Tyson connected with the Social Media Club and began a string
of extraordinarily smart and effective efforts to enlist
the community. For example, it launched a campaign in
Austin in which it agreed to donate 100 pounds of chicken
to the Capital Area Food Bank of Texas for every comment
posted on its blog. They received 658 comments in two
hours and loaded up two trucks filled with chicken for the
hungry, Beth said. They repeated the success in Boston and
San Francisco, launched a user-generated video contest in
Minnesota and sponsored a day of service for its social
media team.
Page 27 of 28
REFERENCES
http://www.scribd.com/doc/17056714
Haynes, T. (n.d.). Social Responsibility and Organizational

Ethics. Retrieved May 8, 2010, from Answers.com:
http://www.answers.com/topic/social-responsibility-
and-organizational-ethics
ISO - International Organization for Standardization. (2009),

Social Responsibiity - ISO 26000,
Web site: http://www.iso.org/sr
http://www.toyotarawal.com
http://www.toyota-indus.com/
Page 28 of 28

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Economic Analysis - 0522

Allama Iqbal Open University

“LORD OF THE LORDS, THE COMPASSIONATE,

MASTER OF THE DAY JUDGEMENT!

YOU ALONE WE WORSHIP.

AND TO YOU ALONE WE LOOK FOR HELP

THOUSANDS OF SALAM TO HOLY

PROPHET HAZRAT MUHAMMAD

(SALALLAH - O –ALE HAY WSSALAM)

EVER LOVING PARENTS

Business environments are becoming more and more

Economic analysis– as an integral part of MBA (Financial

Praises to Almighty ALLAH, who bested upon me the

I wish to express deep sense of gratitude to my elder

I would like to thank all persons for their contribution and

Sincerely hope that everybody will like my work. Give

Muhammad Yasir Aftab

I. Introduction – What is Social Responsibilities ..............

II. Social Responsibilities of Manager .............

III. Arguments for assuming Social Responsibilities .............

IV. Arguments against for assuming Social Responsibilities .............

V. Social Audit: What is it??? .............

VI. Obligations of Managers…. ............. Page 13

VII. Responsibility towards owners .............

VIII Responsibility towards employees .............

IX Responsibility towards consumers .............

X Responsibility towards the Governments .............

XI Responsibility towards the community and society .............

XII Ethics ............. Page 15

XIII 3 ways of institutionalizing Ethics .............

XIV Code of Ethics .............

XV Importance of implementing ethics through Formal Committees

XVI Case Study ............. Page 18

XVII Summary .............

XVIII Recommendations .............

XIX Annex ............. Page 26

XX References ............. Page 27

Social Responsibilities of Managers:

Hey Look at me….will u b a

Are you a manager by chance or by choice?

The reason I ask this is because most managers become

I believe that most people are not prepared for the

Good managers never shy away from taking responsibility

Here we will discuss about some social responsibilities

Reason for Social Responsibilities:

Social responsibility of managers…

 Corporate Social Responsibility:

Corporate social responsibility

Social responsiveness means the

 Impact of Social Responsibility on Profits

 Are Social Obligations in Conflict with profit

Management & the Society…

Social Involvement of Business

 Business have had received its charter from the

Arguments for assuming Social Responsibilities

 Use of Society’s Resources

Arguments against assuming Social Responsibilities

 Responsibility of the Govt.

Social Involvement of Business

 Social involvement may be involved with the interest

freedom and more flexibility in decision making for

Social Audit: What is it???

Types of Social Audits: