DEPARTMENT OF M.B.

ETHICS is a set of standards or a code or value system worked out from human reason & experience by which free human actions are determined as ultimately right or wrong ,good or evil

Social responsibility & Ethics has been an elephant in the room for centuries . Social responsibility has to do with the social conscious of an entity or corporation. It also deals with the citizenship & public sprit of the company. It is common standard of justice.

Social responsibility is an important features of every business in modern times. Economic criteria alone cannot justify the existence of business organizations . Social moral and ethical aspects of business decisions are as important as economic aspects to judge the success of a business firm. Social responsibility is an organization's obligation to benefit society in ways that transcend the primary business objective of maximizing profit

The nature of Social responsibility can be understand as follows :

1-Focus on business firms : Both business & non-business organizations should be responsible towards society.
2-It deals with moral issues : Companies have specific policies and programmers to look after interests of their employees and other stakeholders. 3-It is a pervasive activity : Social responsibility is not just the obligation of top level managers. 4-It is a continuing activity : Social responsibility is not catering to the interests of society once or twice.

There are four levels of hierarchy :

1-Obeyance of the law Managers feel they are discharging Social responsibility by merely obeying the law. 2-Catering to public expections : Social responsibility goes beyond merely obeying the law. In addition to abiding by legal framework of the country:. 3-Anticipation of public expectations : At a still higher level, business firms not only fulfill what society expects from them but also anticipate needs of the society. 4-Creation of public expectations : At the highest level of hierarchy, managers not only cater to public demands but also set standards of Social responsibility and want the society to be benefited by those standards.

Regard corporate Social responsibility has gone through three phases : 1-Profit maximization : Historically, public viewed business enterprises as institutions which mainly looked after the interests of their owners. 2-Trusteeship management : During later years, the concept of Social responsibility got widened from mere satisfaction of owners interests of other stakeholders also, like employees,consumers,creditors etc. 3-Quality of life management : A still wider perspective of Social responsibility developed in 1960s. Business enterprises were supposed to change the quality of society.

Similar to historical perspective, there are three phases of philosophical perspectives of Social responsibility. 1-Traditional philosophy : It defines Social responsibility as producing goods services for society at low cost. 2-Stakeholder philosophy : It is an extension of traditional philosophy. 3-Affirmative philosophy : Similar to the 3rd place of historical perspective ,the affirmative philosophy aims at broadest spectrum of Social responsibility.

Four approaches to Social responsibility are discussed below : 1-Social obstruction : Firms which follow this approach to Social responsibility do the least possible to solve social problems. 2-Social obligation : Socially obliged firms discharge Social responsibility to the extent that avoids government interference. 3-Social response : A step further ahead of social obligation, firms perform legal, ethical and social obligation only if they are asked to do so. 4-Social contribution : Socially responsive firms which favor the concept of Social responsibility follow the social contribution approach where they seek opportunities to perform activities that contribute to social goals.

Companies must adhere to the following principles : 1-Supply chain responsibilities : A companys social responsibilities should cover all those with whom companies come in contact, irrespective of the relationship, product or service, or geographic location. 2-Stakeholder involvement : Companies must be ready to engage in dialogues with stakeholders. 3- Transparency and reporting : Companies must be transparent and open with respect to their policies and social conduct. 4-Independent verification : Companies must verify, that is internally monitor its CSR policies, quality of its reports and management systems and processes.

The following theories link the field of business and society and discuss issues related corporate social responsiveness and public policy : 1-Feminist theory : This theory of CSR is also known as ethics of care .t rejects the concept of moral reasoning as moral decision-making separates moral problems from social problems and distinguishes b/w moral decision-makers and individuals who from part of the society.

2-Stakeholders theory :This theory describes companys relationship with society. It asserts that companies should look after the interests of all those who are affected by their policies and operations.

3-Social contract theory : This theory focuses on changing contracts between business and society. it reflects expectations of society from business houses. Its main aim is economic growth or drive for profits. 4-Ethics and Nature : It describes the origin of ethical dimensions of business. The business values constitute three clusters of values economizing values,ecologising and power aggrandising. 5-Pragmatism : This theory of business ethics incorporates various trends found in contemporary business ethics.It provides a philosophical ground for understanding what is moral and why and how we chose among various principles in an ongoing process of dealing with change and novelty.

The business of a company its priorities direction of development, philosophy, policies all are guided by its objectives. Business is an economic institution that operates in social system. It influences various elements in society and is, in turn, influenced by them. The social system is influenced by the way business carries its activities. A business enterprise must, therefore, correspond to the social environment in which it operates.

The following arguments are offered in favor of corporate social responsibility : 1-Long run survival of business concerns : Firms that assumes social responsibilities may suffer losses in the short-run nut fulfilling social obligations is certainly beneficial for long-run survival of the firms. 2- Profitable for the business concerns : Assuming social responsibility necessary and helpful for long-run survival of business firms.

3-Moral and social commitment : Business organizations operate in the social environment and therefore should be morally committed to the interest of the society. 4-Improvement in public image : A business firm that looks after interests of the society develop goodwill and public image. 5-Helps in avoiding government regulation : Business organizations that do not assume social responsibility may be required to do so by the government. 6-Resources : Business organizations have enormous resources which can be partly used for soling social problems.

The concepts of corporate social responsibility has been criticized on the following ground. 1-Business is an economic activity : IT is argued by the opponents of social responsibility that basic function of a business enterprise be engaged in it, what amount of resources should be committed to social values. 2-Quantification of social benefits : What measures social responsibility and to what extent should a business enterprise be engaged in it what amount of resources should be committed to social values, whose interest should hold priority over others questions are open to subjective considerations.

3-Cost-benefit analysis : Any social-benefits programmed where initial costs exceed the benefits may not be taken up by business enterprises even in the short-run. 4-Lack of skull and competence : Professionally qualified managers may not have the aptitude required to solve the social problems. 5-Transfer of social costs : Costs related to social programmers are adjusted by business concerns. 6- Sub-optimal utilization of resources : If scares business resources are utilized for social goals, this would violate the very purpose of existence of an organizations.