This page contains the NCERT Business Studies class 11 chapter 6 Social Responsibilities of Business and Business Ethics from Part 1 Foundations of Business. You can find the solutions for the chapter 6 of NCERT class 11 Business Studies, for the Short Answer Questions and Projects/Assignments Questions in this page. So is the case if you are looking for NCERT class 11 Business Studies related topic Social Responsibilities of Business and Business Ethics question and answers.
Short Answer Questions
1. What do you understand by social responsibility of business? How is it different from legal responsibility?
Social responsibility of business refers to its obligation to make decisions and take actions that are desirable in terms of the objectives and values of society. It implies that businesses should respect societal aspirations and try their best to contribute to these aspirations alongside their profit interests. Legal responsibility, on the other hand, pertains to the adherence to laws and regulations. While legal responsibility can be fulfilled by mere compliance with the law, social responsibility goes beyond that. It involves recognizing social obligations that may not be covered by law and voluntarily taking actions for the benefit of society.
2. What is environment? What is environmental pollution?
The environment is defined as the totality of man’s surroundings — both natural and man-made. These surroundings include natural resources like land, water, air, fauna, flora, and raw materials, as well as man-made resources such as cultural heritage, socio-economic institutions, and people. Environmental pollution refers to the injection of harmful substances into the environment. Pollution changes the physical, chemical, and biological characteristics of air, land, and water, degrading living conditions, wasting or depleting raw material resources, and harming human life as well as the life of other species.
3. What is business ethics? Mention the basic elements of business ethics.
Business ethics concerns itself with the relationship between business objectives, practices, and techniques and the good of society. It refers to the socially determined moral principles which should govern business activities. The basic elements of business ethics are:
1.
Top management commitment: Leadership from the top for upholding the values of the organisation.
2.
Publication of a ‘Code’: Defining the principles of conduct for the organization in a written document.
3.
Establishment of compliance mechanisms: Setting up mechanisms to ensure decisions and actions align with ethical standards.
4.
Involving employees at all levels: Engaging all employees in implementing and upholding ethics policies.
5.
Measuring results: Auditing performance to ensure compliance with ethical standards and discussing results for future actions.
4. Briefly explain
(a)
Air Pollution,
(b)
Water pollution, and
(c)
Land pollution.
(a) Air Pollution: Air pollution results from factors that degrade air quality. It is mainly due to carbon monoxide from automobiles and smoke and other chemicals from manufacturing plants. This pollution can lead to a hole in the ozone layer, causing the earth’s warming.
(b) Water Pollution: Water becomes polluted primarily from chemical and waste dumping. Business enterprises have historically dumped waste into rivers, streams, and lakes without considering the consequences. This pollution harms aquatic life and poses threats to human health.
(c) Land Pollution: This type of pollution is caused by dumping toxic wastes on land, which harms the quality of the land and renders it unfit for agriculture or plantation. Restoring already damaged land quality is challenging.
5. What are the major areas of social responsibility of business?
The major areas of social responsibility of business can be broadly divided into four categories:
1.
Economic responsibility: It is the primary responsibility of a business to produce goods and services desired by society and sell them at a profit.
2.
Legal responsibility: Businesses have an obligation to operate within the laws of the land. A law-abiding enterprise is considered socially responsible.
3.
Ethical responsibility: This pertains to behaviors expected by society but not codified in law, such as respecting religious sentiments in advertising.
4.
Discretionary responsibility: This involves voluntary obligations assumed by a business, like providing aid during natural disasters or making charitable contributions.
6. State the meaning of Corporate Social Responsibility as per the Companies Act 2013.
Corporate Social Responsibility (CSR) as per the Companies Act 2013 refers to the responsibility of companies with a net worth of rupees five hundred crore or more, or a turnover of rupees one thousand crore or more, or a net profit of rupees five crore or more during any financial year to constitute a Corporate Social Responsibility Committee. This committee is responsible for formulating and recommending a CSR Policy indicating activities to be undertaken by the company as specified in Schedule VII, recommending expenditure for these activities, and monitoring the CSR policy. The company is required to spend at least two per cent of its average net profits made during the three immediately preceding financial years on CSR activities. If the company fails to spend such amount, it must specify the reasons in its Board’s report.
Long Answer Questions
1. Build up arguments for and against social responsibilities.
Arguments for Social Responsibilities:
1.
Economic Responsibility: A business’s primary responsibility is economic, i.e., to produce goods and services that society needs and to sell them at a profit.
2.
Legal Responsibility: Businesses have an obligation to operate within the laws of the land. Abiding by these laws ensures that the enterprise is socially responsible.
3.
Ethical Responsibility: Beyond laws, businesses have a duty to respect societal expectations and norms, like respecting religious sentiments in advertising. This ensures they’re behaving in a manner expected by society.
4.
Discretionary Responsibility: Businesses voluntarily assuming obligations, like charity or aiding during natural disasters, show that they care about societal welfare beyond profit.
5.
Social Responsibility Towards Different Interest Groups: Recognizing responsibilities towards stakeholders like shareholders, workers, consumers, and the community ensures that businesses are considering the broader impact of their actions on all involved parties.
6.
Business and Environmental Protection: With environmental degradation becoming a pressing issue, it’s crucial for businesses to adopt practices that safeguard the environment for the long-term well-being of society.
Arguments Against Social Responsibilities
1.
Primary Objective of Profit: From an individualistic perspective, the primary objective of a business might be to earn profit, which could sometimes be at odds with broader societal objectives.
2.
Increased Costs: Adopting environmentally friendly technologies or ethical practices might result in increased costs for businesses, which they might pass on to consumers or result in reduced profits.
3.
Lack of Expertise: Businesses are primarily equipped to deal with economic challenges, not societal ones. They might lack the expertise to effectively tackle societal issues.
4.
Potential for Conflict of Interest: Balancing profitability with social responsibility could lead to conflicts of interest, where decisions that benefit society might not necessarily be economically viable.
While the passage primarily focuses on the importance and types of social responsibilities, it implies that there can be potential challenges or conflicts in balancing profitability with societal objectives.
2. Discuss the forces which are responsible for increasing concern of business enterprises toward social responsibility.
The forces which are responsible for increasing concern of business enterprises toward social responsibility are as follows:
1.
Public Expectation: The society expects businesses not only to provide goods and services but also to consider the well-being of the community. Businesses exist to cater to society’s needs, and as societal awareness grows, so does the expectation that businesses will act in a socially responsible manner.
2.
Long-term Self-interest: Businesses have started realizing that in order to sustain and grow in the long run, they need to look beyond just profits. Ethical business is good for business in the long run, improving public image, earning trust, and leading to greater success. For instance, an ethically responsible enterprise that takes care of its environment and stakeholders will likely enjoy a better reputation.
3.
Moral Obligation: Ethical behavior means doing what is right and just. Companies recognize that certain actions, even if they don’t lead to immediate financial gain, are the right things to do. For instance, respecting cultural and religious sentiments in advertising.
4.
Government Regulation and Legal Pressure: Governments worldwide are now setting regulations and standards for businesses to follow to ensure they adhere to ethical practices. This legal pressure forces businesses to incorporate social responsibility into their operational strategies.
5.
Environmental Concerns: With the rise in environmental problems, there’s a growing realization worldwide that businesses play a significant role in either mitigating or exacerbating these issues. Environmental protection has become crucial, making businesses address issues like pollution and resource management.
6.
Globalization and Market Pressures: As businesses expand globally, they face different societal norms and expectations. To be successful globally, they need to adopt practices that are socially responsible and accepted across different cultures.
7.
Influence of Employees and Investors: Modern employees prefer to work for companies that have a social conscience. Similarly, investors are also more inclined to invest in companies that adopt ethical and responsible practices.
By considering these forces, it becomes evident that businesses today are under multifaceted pressures to adopt and integrate social responsibility into their core strategies.
3. ‘Business is essentially a social institution and not merely a profit making activity’. Explain.
Business is not just about earning profits and maximizing financial returns. While financial gains are undeniably a primary objective, a business exists within a society, interacts with various stakeholders, and hence, cannot function in isolation. Here’s an explanation as to why business is essentially a social institution and not merely a profit-making activity:
1.
Meeting Society’s Needs: From the social point of view, the main purpose of a business is to produce and provide goods and services that fulfill the needs of the people. Businesses cater to the demands of the society, ensuring that people have access to essential as well as non-essential commodities and services.
2.
Impact on Society: Businesses have a profound impact on society in terms of employment, innovation, infrastructure development, and more. They play a vital role in the economic development and upliftment of a region or country.
3.
Social Responsibilities: Businesses have multiple responsibilities. They are expected to ensure the safety of their products, provide a fair wage to employees, respect the environment, and contribute to community development. These responsibilities signify that businesses don’t just function for profit but have a wider role in the betterment of society.
4.
Ethical Considerations: As discussed in the passage, businesses today are expected to adhere to moral principles, maintain integrity in their dealings, and respect ethical boundaries. This is evident from the emphasis on business ethics which is all about aligning individual good with societal good.
5.
Environmental Responsibility: The passage also highlights the role of businesses in environmental protection. They are expected to ensure minimal harm to the environment, adopt sustainable practices, and contribute to efforts that mitigate environmental issues. This underscores the fact that businesses have a duty beyond just profit-making, especially given their substantial influence on the environment.
6.
Stakeholder Relations: Businesses interact with a variety of stakeholders – employees, customers, investors, communities, and the government. Maintaining a harmonious relationship with all of them requires businesses to consider societal values, norms, and expectations.
In conclusion, while profit is a driving factor for any business, it isn’t the sole purpose. A business is deeply intertwined with society and has an obligation to act responsibly, ethically, and in a manner that benefits the broader community. This interdependence and broader role make business essentially a social institution.
4. Why do the enterprises need to adopt pollution control measures?
The enterprises need to adopt pollution control measures due to the following reasons:
1.
Reduction of Health Hazards: Pollution has direct and severe implications on health. Many diseases, such as cancer, heart attacks, and lung complications, are linked to pollutants in the environment. By controlling pollution, enterprises can mitigate the severity of these diseases, ensuring a healthier society.
2.
Reduced Risk of Liability: If an enterprise releases hazardous wastes into the environment, it might be held liable for the resultant harm. They could be required to compensate those affected by the pollution. By instituting pollution control measures, enterprises can reduce their legal liabilities and avoid such compensations.
3.
Cost Savings: Adopting effective pollution control programs can lead to operational cost savings. For instance, if an inefficient production process results in excess waste, the costs of waste disposal and plant cleaning can escalate. By adopting more efficient, less polluting processes, businesses can reduce these costs.
4.
Improved Public Image: With society becoming more environmentally conscious, a company’s stance on pollution control can significantly influence its public image. An enterprise that actively works towards environmental protection will be perceived positively, fostering trust among consumers and stakeholders.
5.
Other Social Benefits: Apart from the direct benefits, pollution control brings about several other societal advantages. These include clearer visibility, preservation of monuments and structures, improved overall quality of life, and access to natural resources in their pure form.
6.
Protection of Resources: Pollution degrades our natural resources. By controlling pollution, businesses ensure that these resources remain available for future generations. This sustainability is vital for the long-term survival and success of businesses themselves.
7.
Regulatory Compliance: Governments worldwide are becoming increasingly stringent about environmental regulations. By implementing pollution control measures, businesses can ensure they are compliant with these regulations, avoiding penalties and potential legal actions.
In conclusion, pollution control measures are not just an environmental necessity but also bring about operational, legal, and reputational benefits for businesses. Adopting these measures is crucial for the long-term viability and responsibility of enterprises.
5. What steps can an enterprise take to protect the environment from the dangers of pollution?
The following are the steps an Enterprise Can Take to Protect the Environment from the Dangers of Pollution:
1.
Commitment from Top Management: The upper echelon of the enterprise, especially the CEO and other senior managers, must show a deep and open commitment to environmental protection. They should drive the company towards practices that are environment-friendly and set clear guidelines on maintaining ethical behavior concerning the environment.
2.
Adopting Cleaner Technologies: Enterprises should focus on using technology that minimizes waste production. A preventive approach can be adopted to control pollutants at the source. For example, a change in the production process, redesigning of equipment, or replacing poor quality materials with better, environmentally-friendly alternatives can reduce pollution.
3.
Compliance with Government Regulations: Enterprises should ensure that they are strictly following all the laws and regulations put forth by the government to prevent pollution. This includes adhering to guidelines, permits, and standards set by environmental agencies.
4.
Participation in Government Programs: Businesses should actively participate in government-led initiatives related to environmental protection. This can include management of hazardous substances, initiatives to clean polluted rivers, tree plantation drives, and efforts to curb deforestation.
5.
Regular Assessment of Environmental Programs: Enterprises should regularly evaluate their pollution control programs to understand their effectiveness. This involves assessing the costs and benefits of these programs and ensuring that they are making tangible progress in environmental protection.
6.
Educational Workshops and Training: Companies should invest in training their staff and associated stakeholders about the importance of pollution control. Workshops can be conducted to share technical information and experiences with suppliers, dealers, and customers to ensure collective responsibility.
7.
Engaging with the Community: Continuous interaction with various community groups and being receptive to their feedback can help businesses understand the environmental impact of their operations. They can also participate in community-led environmental protection initiatives, ensuring a collaborative effort in safeguarding the environment.
8.
Dealing with Waste Effectively: Waste management is crucial. Enterprises should adopt scientific techniques for the treatment and disposal of waste. This can prevent harmful substances from entering and polluting the environment.
By taking these steps, enterprises can play a pivotal role in protecting the environment from the dangers of pollution, ensuring a sustainable future for all.
6. Explain the various elements of business ethics.
The following are the various elements of business ethics.
1.
Top Management Commitment: One of the foundational elements of business ethics is the unwavering dedication from the top management. The CEO and senior managers should not only express but also actively demonstrate their commitment to uphold ethical behavior within the organization. Their leadership plays a crucial role in setting the tone for the entire company’s ethical conduct.
2.
Publication of a ‘Code’: Companies that prioritize ethical conduct often draft and disseminate a “code” of conduct. This code serves as a written document outlining the fundamental principles the organization upholds. It covers vital areas such as honesty, compliance with laws, product safety, workplace health and safety, conflict of interest, employment practices, fair sales/marketing practices, and accurate financial reporting.
3.
Establishment of Compliance Mechanisms: To make sure the company’s actions align with its ethical principles, appropriate compliance mechanisms should be in place. Some examples include hiring practices that emphasize ethical behavior, continuous training on corporate ethics, regular auditing to monitor compliance, and establishing communication channels to report unethical incidents.
4.
Involving Employees at All Levels: Ethical conduct within a business is a collective effort. Employees at every tier of the organization should be actively involved in upholding and promoting the company’s ethical values. Small groups can be formed to discuss and analyze the company’s ethical policies and the employees’ attitudes towards them.
5.
Measuring Results: While quantifying the outcomes of ethical programs can be challenging, businesses should engage in periodic audits to monitor their adherence to ethical standards. The findings should then be discussed among the top management team and other employees to ascertain the future course of action and make necessary adjustments.
In essence, business ethics revolves around the interplay of individual objectives and societal expectations. By integrating these elements, businesses not only ensure their operations are in line with moral principles but also contribute positively to societal well-being.
7. Discuss the guidelines enumerated by the Companies Act 2013 for Corporate Social Responsibility.
The guidelines enumerated by the Companies Act 2013 for Corporate Social Responsibility are as follows:
The Companies Act 2013 introduced the concept of CSR in the Indian legal statute for the first time. The key provisions relating to CSR under the Companies Act 2013 are primarily contained in Section 135, along with the CSR Policy Rules, 2014, and Schedule VII of the Act.
1.
Applicability: The CSR provisions are applicable to companies with a net worth of INR 500 crore or more, or a turnover of INR 1000 crore or more, or a net profit of INR 5 crore or more during any financial year.
2.
CSR Committee: Such companies are required to constitute a CSR Committee of their Board of Directors, comprising at least three directors, with at least one of them being an independent director.
3.
CSR Expenditure: The Act mandates companies to spend at least 2% of the average net profits of the company made during the three immediately preceding financial years in pursuance of its CSR policy.
4.
Activities Included: Schedule VII of the Act lists down the CSR activities which may include eradicating extreme hunger and poverty, promotion of education, promoting gender equality, ensuring environmental sustainability, protection of national heritage, setting up homes and hostels for women and orphans, etc. This list is illustrative and not exhaustive.
5.
CSR Policy: The CSR Committee is required to formulate and recommend a CSR Policy to the Board of Directors, indicating activities to be undertaken as per Schedule VII. The Board must approve this policy and disclose its contents in its report and place it on the company’s website.
6.
Reporting: The Board’s report to the shareholders needs to include an annual report on CSR containing particulars specified in the annexure about the CSR policy and initiatives taken.
7.
Failure to Spend: If the company fails to spend the required amount on CSR, it must specify the reasons for not doing so in its Board’s report.
8.
Implementation: Companies can implement their CSR activities through a registered trust, society, or a company established by the company or its holding or subsidiary or associate company.
9.
Monitoring: The CSR committee monitors the CSR policy from time to time.
These provisions ensure that qualifying companies allocate resources towards the social betterment of society, thereby ensuring a balance between profitability and social welfare.
Projects/Assignments
1. Develop and put in writing a code of ethics for use in the classroom. Your document should include guidelines for students, teachers, and the principal.
Classroom Code of Ethics
Preamble:
This code of ethics is created to ensure a respectful, safe, and conducive learning environment for every member of our school community. It is essential that students, teachers, and the principal abide by these principles to foster trust, respect, and personal growth.
Guidelines for Students:
1.
Respect and Tolerance: Treat every classmate and teacher with respect irrespective of their race, religion, gender, age, and physical or mental abilities.
2.
Honesty: Be honest in your work and actions. Refrain from cheating, copying, or presenting someone else’s work as your own.
3.
Punctuality: Arrive on time for classes and school events. Respect the importance of time in an educational setting.
4.
Responsibility: Take responsibility for your actions and their consequences. Avoid blaming others for your mistakes.
5.
Active Participation: Engage actively in lessons. Listen attentively and avoid distractions.
6.
Safety: Do not engage in activities that can harm yourself or others. This includes physical violence, bullying, or using abusive language.
Guidelines for Teachers:
1.
Impartiality: Treat every student with fairness. Avoid favoritism and ensure that grading is done based on merit.
2.
Professionalism: Maintain a professional relationship with students. This includes appropriate communication, behavior, and boundaries.
3.
Lifelong Learning: Regularly update your knowledge and teaching methods. This ensures students receive the best education possible.
4.
Confidentiality: Respect the confidentiality of student information, only sharing it when it’s legally or ethically required.
5.
Empathy: Understand the diverse backgrounds and challenges faced by students. Provide extra support when necessary.
6.
Open Communication: Encourage students to express their opinions, doubts, and concerns. Be approachable and open to feedback.
Guidelines for the Principal:
1.
Leadership: Lead by example. Display values and behaviors that reflect the school’s mission and vision.
2.
Open Door Policy: Be approachable for both staff and students. Encourage open communication.
3.
Continuous Improvement: Regularly assess and adapt school policies, ensuring they cater to the changing needs of students and staff.
4.
Safety and Welfare: Ensure the school premises are safe. Prioritize the emotional, physical, and mental well-being of the students and staff.
5.
Resource Allocation: Ensure that the resources (like books, technology, and infrastructure) are up-to-date and distributed fairly among all.
6.
Staff Development: Promote and provide opportunities for staff professional growth and development.
By abiding by this code of ethics, we commit ourselves to uphold the values of integrity, respect, responsibility, and growth, ensuring a positive learning environment for all.
2. Using newspapers, magazines and other business references, identify and describe at least three companies that you think are socially responsible and three that you think are socially irresponsible
Socially Responsible Companies:
1.
Tata Group:
Description: The Tata Group, an Indian multinational conglomerate, has always been at the forefront of corporate social responsibility in India. With a motto “Leadership with Trust”, they engage in a variety of community and social initiatives.
Evidence: The Tata Trusts, including Sir Ratan Tata Trust and Sir Dorabji Tata Trust, focus on areas like health, education, and livelihood opportunities. Their commitment to returning to society is evident in their pledge to donate 60% of the group’s profits to charity.
2.
Infosys:
Description: Infosys, a multinational corporation that provides IT consulting and services, has been actively involved in numerous CSR activities in India.
Evidence: Infosys Foundation supports programs in the areas of education, rural development, healthcare, arts and culture. They’ve been recognized for their effort in bridging the digital divide, biogas-based electricity generation, and numerous health initiatives.
3.
ITC Limited:
Description: ITC is one of India’s leading multi-business conglomerates with a diverse presence in FMCG, Hotels, Agri-business, and Information Technology.
Evidence: Their e-Choupal initiative is a unique blend of CSR and business that addresses challenges in rural farming. They’ve also made significant strides in afforestation, watershed development, and sustainable agriculture.
Socially Irresponsible Companies:
1.
Kingfisher Airlines:
Description: Once a leading airline in India, it’s downfall brought about various financial and operational irregularities to light.
Evidence: The company faced allegations of financial mismanagement, defaulting on loans, and non-payment of salaries to employees. Their operations came to a halt leaving thousands unemployed and creditors unpaid.
2.
Nirav Modi’s Firestar Diamond:
Description: Nirav Modi and his jewelry company were involved in a massive banking scam in India.
Evidence: The company was involved in fraudulent activities leading to a $2 billion scam at Punjab National Bank, one of India’s premier banking institutions.
3.
Union Carbide Corporation:
Description: The multinational company was involved in the Bhopal Gas Tragedy, one of the world’s worst industrial disasters.
Evidence: A gas leak in 1984 at their plant in Bhopal resulted in thousands of deaths and affected over half a million people. The company faced severe backlash for safety negligence and insufficient compensation to the victims.
Note: The above examples and evidences are based on real events but have been presented in a concise manner for the purpose of the assignment. The classification of companies into responsible and irresponsible is based on specific incidents and does not reflect the entirety of their operations or contributions.
3. Choose a company and prepare a report on Corporate Social Responsibility undertaken by it.
Company: Tata Group
Introduction:
The Tata Group is a renowned Indian multinational conglomerate, headquartered in Mumbai. With diversified operations ranging from IT, steel, automobiles to consumer goods, the group has played a pivotal role in India’s industrial growth. Over the years, the Tata Group has also stood out for its dedication to Corporate Social Responsibility (CSR).
Areas of CSR Engagement:
1.
Education:
●
Tata Education and Development Trust: This initiative offers scholarships for needy students, including those wishing to study overseas.
●
Affirmative Action Programme: Focuses on providing educational and entrepreneurial opportunities specifically to the Scheduled Castes and Scheduled Tribes.
2.
Healthcare:
●
Tata Trusts: Pioneers in the country’s public health system, they have initiatives like Swasth India which aims at improving the nutrition outcomes of communities.
●
Tata Memorial Centre: A leader in cancer care treatment, research, and education.
3.
Rural Development:
●
Tata Watershed Development Programme: Aims at making dry and degraded lands productive by training communities in watershed development techniques.
●
Tata Steel Rural Development Society: Focuses on enhancing the quality of life in villages around Tata Steel’s operational areas.
4.
Environmental Sustainability:
●
Green School Project: Jointly initiated by Tata Steel and TERI, it aims at creating awareness about environmental issues among school students.
●
Afforestation: Tata companies have planted millions of trees to restore the ecological balance.
5.
Livelihood and Skill Development:
●
Tata STRIVE: Focuses on skilling the youth and making them job-ready.
●
Tata Motors Skill Development: Aims at enhancing the skills of underprivileged youth and making them employable in the automobile industry.
Impact of CSR Initiatives:
●
Social Impact: Enhancing the quality of education, healthcare services, and skill development opportunities for underprivileged sections of society.
●
Environmental Impact: Through their afforestation efforts, they have contributed to reducing the carbon footprint and restoring ecological balance. The group also emphasizes reducing water consumption and waste generation.
●
Economic Impact: By skilling the youth, Tata has created a pool of employable individuals, boosting local economies. The group’s rural development initiatives have also resulted in increasing incomes for marginalized farmers.
Conclusion:
The Tata Group’s commitment to CSR is reflected in its myriad initiatives that touch every aspect of societal development. By consistently investing resources in community development and environmental conservation, the group is not only setting standards for corporate India but is also playing a pivotal role in nation-building. The legacy of the founder, Jamsetji Tata, who believed in improving the community for its progress, is well upheld by the current generation of Tata companies.
Sources: Tata Group’s official website, Annual reports, and other publically available resources.