One app for all your study abroad needs
This chapter discusses the concept, need, arguments for and against, kinds, and specific responsibilities of business towards society. It covers social responsibility towards owners, workers, consumers, government, and community, along with the business role in environmental protection and pollution control. The chapter also explains business ethics, its elements, and its importance for long-term success. These notes summarise key concepts from Chapter 6 of the NCERT textbook Business Studies for effective revision. You can also download the free PDF for quick reference.
Contents
- 1 Introduction
- 2 Concept of Social Responsibility
- 3 Need for Social Responsibility
- 4 Reality of Social Responsibility
- 5 Kinds of Social Responsibility
- 6 Business and Environmental Protection
- 7 Business Ethics
- 8 Important Definitions in NCERT Notes Class 11 Business Studies Chapter 6: Social Responsibilities of Business and Business Ethics
- 9 FAQs
Explore Notes of Class 11: Business Studies
Introduction
A business enterprise should do business and earn money in ways that fulfil the expectations of society. Business is permitted by society to carry on activities and earn profits. It must avoid undesirable practices like adulterated goods, deceptive ads, tax evasion, pollution, and worker exploitation. Supplying quality goods, healthy working conditions, honest tax payment, pollution control, and attending to customer complaints are desirable practices. Socially responsible and ethical behaviour leads to durable success.
- Examples: Adulterated goods increase profit but harm society; quality goods improve image and profitability.
- Desirable practices: Honest taxes, pollution devices, fair customer service.
Concept of Social Responsibility
Social responsibility of business refers to its obligation to make decisions and perform actions desirable in terms of the objectives and values of society. Businesses must respect society’s aspirations and contribute to them along with profit interests. It is broader than legal responsibility. Legal responsibility is mere compliance with the law. Social responsibility includes voluntary actions beyond the law for society’s benefit.
- Social responsibility: Decisions desirable for society’s objectives and values.
- Broader than legal: Includes voluntary actions not covered by law.
Need for Social Responsibility
Social responsibility is an ethical issue involving what is morally right or wrong. It includes voluntary action by businessmen. Debate exists on whether businesses should assume social responsibilities.
Arguments for Social Responsibility:
(i) Justification for existence and growth: Business exists to satisfy human needs; profit is the outcome of service to society. Continuous service ensures prosperity and growth.
(ii) Long-term interest of the firm: Service to society gains maximum long-run profits; public image improves when social goals are supported.
(iii) Avoidance of government regulation: Voluntary social responsibility reduces the need for new laws; regulations limit freedom.
(iv) Maintenance of society: Laws cannot cover all circumstances; business assuming responsibility prevents anti-social activities.
(v) Availability of resources with business: Business has financial, human, and managerial resources to solve social problems.
(vi) Converting problems into opportunities: Business can turn social challenges into profitable deals.
(vii) Better environment for doing business: A Society with fewer problems provides a better business environment.
(viii) Holding business responsible for social problems: Business creates issues like pollution, unsafe workplaces; moral obligation to solve them.
Arguments against Social Responsibility:
(i) Violation of profit maximisation objective: Business exists only for profit; social responsibility contradicts this.
(ii) Burden on consumers: Costs of social responsibilities are shifted to consumers via higher prices.
(iii) Lack of social skills: Businessmen lack training to solve social problems; they should be left to specialised agencies.
(iv) Lack of broad public support: The Public does not support business interference in social programmes.
Reality of Social Responsibility
Business people realise they have social obligations besides profits. Private firms must meet democratic society. Factors forcing social responsibility include:
(i) Threat of public regulation: Governments regulate irresponsible businesses to protect people.
(ii) Pressure of the labour movement: Organised labour forces worker welfare.
(iii) Impact of consumer consciousness: Educated consumers demand rights; ‘customer is king’.
(iv) Development of social standards for business: Business must serve social needs to be legitimate.
(v) Development of business education: Increases awareness of social purpose.
(vi) Relationship between social interest and business interest: Complementary; serving society benefits business long-term.
(vii) Development of professional, managerial class: Professional managers satisfy multiple interest groups.
Kinds of Social Responsibility
Social responsibility is divided into four categories:
(a) Economic responsibility: Produce goods and services society wants and sell at a profit.
(b) Legal responsibility: Operate within the laws of the land.
(c) Ethical responsibility: Behaviour expected by society but not in law; voluntary.
(d) Discretionary responsibility: Purely voluntary obligations like charitable contributions.
Social Responsibility Towards Different Interest Groups
Here are some of the social responsibilities of business towards different interest groups:
(i) Responsibility towards shareholders or owners: Fair return on investment; safety of investment; regular, accurate information on working and growth.
(ii) Responsibility towards workers: Meaningful work; right working conditions; respect union rights; fair wages and deal.
(iii) Responsibility towards consumers: Right quality, quantity at reasonable prices; no adulteration, misleading ads; right of information.
(iv) Responsibility towards government and community: Respect laws; pay taxes honestly; good citizen; protect the environment; proper society image.
Also Read: NCERT CBSE Class 10 Chapter 3 Economics Notes
Business and Environmental Protection
The environment is the totality of man’s surroundings – natural and man-made. Quality is deteriorating due to industrial activity. Pollution injects harmful substances; it harms health, life, and resources.
Causes of Pollution
Industry is the main source of waste generation, and it generates various types of waste. There are different types of pollution in the atmosphere. They are:
(i) Air pollution: Carbon monoxide from automobiles; smoke from plants; ozone hole, global warming.
(ii) Water pollution: Chemical/waste dumping in rivers; threatens life.
(iii) Land pollution: Toxic wastes damage land, unfit for agriculture.
(iv) Noise pollution: Factories, vehicles cause hearing loss, heart issues, and mental disorders.
Need for Pollution Control
Several reasons exist to justify the need to control various types of pollution levels. These include:
(i) Reduction of health hazards: Checks diseases like cancer, lung issues.
(ii) Reduced risk of liability: Avoid compensation for toxicity damage.
(iii) Cost savings: Effective control reduces waste disposal costs.
(iv) Improved public image: Environment-conscious firm seen as responsible.
(v) Other social benefits: Better visibility, quality of life, purer products.
Role of Business in Environmental Protection
Businesses should lead in pollution control and resource protection. Some of the steps to be followed by the business for environmental protection are:
(i) Top management commitment to work culture for protection.
(ii) Share commitment across all divisions and employees.
(iii) Clear policies for quality materials, superior technology, and waste disposal.
(iv) Comply with government laws.
(v) Participate in government programmes – hazardous substances, river cleaning, and tree plantation.
(vi) Periodical assessment of programmes.
(vii) Arrange workshops, training for suppliers, dealers, and customers.
Business Ethics
Business supplies goods/services to society; the primary objective is profit. Ethics is concerned with right/wrong judged by society’s standards. Business ethics: Socially determined moral principles governing business activities. Examples: Fair prices, fair weights, fair worker treatment, reasonable profits. Ethical behaviour improves image, trust, and success. Ethics and profits go together long run.
Elements of Business Ethics
Some of the basic elements of business ethics are:
(i) Top management commitment: CEO leads ethical conduct; upholds values.
(ii) Publication of a ‘Code’: Written document on honesty, laws, product safety, workplace health, and fairness.
(iii) Establishment of compliance mechanisms: Ethics in recruiting, training, regular audits, and reporting systems.
(iv) Involving employees at all levels: Implement policies; discuss in groups.
(v) Measuring results: Audit compliance; discuss for further action.
Important Definitions in NCERT Notes Class 11 Business Studies Chapter 6: Social Responsibilities of Business and Business Ethics
This section lists key terms for clarity and revision:
- Social Responsibility: Obligation to take decisions and actions desirable for society’s objectives and values.
- Economic Responsibility: Produce goods/services society wants and sell at a profit.
- Legal Responsibility: Operate within the laws of the land.
- Ethical Responsibility: Behaviour expected by society but not codified in law.
- Discretionary Responsibility: Purely voluntary obligations, like charity.
- Pollution: Injection of harmful substances into the environment.
- Business Ethics: Socially determined moral principles governing business activities.
Explore Solutions of Class 11: Business Studies
Related Reads
Explore Notes of Other Subjects of NCERT Class 11
FAQs
It is the duty of business to make decisions and take actions that are good for society’s goals and values, beyond just earning profits.
It justifies their existence, ensures long-term profits, avoids government rules, uses resources to solve problems, and creates a better environment for business.
Economic: Produce and sell needed goods profitably; Legal: Follow laws; Ethical: Do what society expects; Discretionary: Voluntary help like charity.
It means following moral rules set by society in business activities, like fair prices, honest ads, and good treatment of workers.
Top leaders commit, follow laws, use better technology, treat waste properly, join government programs, and train everyone involved.
For NCERT study material, follow NCERT Notes and Solutions Class 11 Business Studies by Leverage Edu now.
