📘 Chapter 6 – Social Responsibility of Business and Business Ethics

​

Businesses exist to earn profit, but they also have a duty towards society. This duty is called social responsibility. In this chapter, we learn what social responsibility means, why it is important, and how ethical behaviour helps businesses succeed in the long run.

 

✅ 1. Meaning of Social Responsibility

Social responsibility means that businesses should not only focus on earning profit but also think about the welfare of society. It includes taking care of:

• Customers

• Employees

• Shareholders

• Government

• Environment

• Society at large

A socially responsible business tries to balance profit with public good.

 

✅ 2. Need for Social Responsibility

Businesses must follow social responsibility for many reasons:

1. Long-term self-interest: A business that helps society builds a good image and survives longer.

2. Public expectations: Today, people want businesses to be fair, honest, and eco-friendly.

3. Legal requirements: Laws now demand pollution control, fair wages, and safety.

4. Better environment for business: A healthy society means more customers and better workers.

5. Avoid government control: If businesses act responsibly, there is less need for strict rules.

6. Moral obligation: Businesses use society’s resources, so they should give back.

 

✅ 3. Responsibility Towards Different Groups

A business has responsibilities towards many people and groups:

• Owners/Shareholders: Give fair return on investment and grow the business.

• Employees: Provide good wages, safe working conditions, and respect.

• Consumers: Offer good quality products at fair prices, with honesty.

• Government: Pay taxes on time, follow laws, and support development.

• Community/Society: Create jobs, avoid pollution, support education and health.

• Environment: Use eco-friendly methods and reduce waste and pollution.

 

✅ 4. Arguments For and Against Social Responsibility

Arguments in Favour:

• Builds goodwill and trust

• Improves brand value

• Helps in long-term profits

• Reduces risk of legal trouble

• Attracts better employees and customers

Arguments Against:

• Main aim of business is profit, not charity

• May increase cost of products

• Not all businesses can afford it

• Social work is government’s job, not business’s

Even though some people oppose it, social responsibility is becoming more important in modern times.

 

✅ 5. Business and Environmental Protection

One of the biggest responsibilities of business today is to protect the environment from pollution and damage.

Types of Pollution Caused by Business:

• Air pollution: Smoke from factories and vehicles

• Water pollution: Wastes thrown into rivers and seas

• Noise pollution: Loud machinery and traffic

• Land pollution: Dumping waste on land

Reasons Why Business Should Protect Environment:

• Health of people is affected

• Natural resources are limited

• Pollution laws must be followed

• Public awareness is increasing

• Business also depends on natural resources

Steps Businesses Can Take:

• Use pollution control equipment

• Treat waste before disposal

• Save energy and water

• Follow environmental laws strictly

• Develop eco-friendly products

 

✅ 6. Business Ethics

Business ethics means following moral principles and values in business activities. It is about doing what is right, fair, and honest.

Importance of Business Ethics:

• Builds customer trust

• Improves employee morale

• Reduces legal issues

• Helps long-term growth

• Creates a good image in society

Examples of Ethical Business Practices:

• Not cheating customers

• Paying fair wages

• Avoiding child labour

• Being honest in advertising

• Protecting the environment

 

✅ 7. Elements of Business Ethics

A good ethical program in a business includes:

1. Code of Conduct – Written rules for good behaviour

2. Ethical Training – Teaching employees what is right and wrong

3. Top Management Support – Leaders must set a good example

4. Monitoring System – Checking if rules are followed

5. Rewards and Punishments – Encouraging honesty, punishing cheating

 

✅ Conclusion

In today’s world, a successful business is not just the one that earns high profits, but also the one that respects society and the environment. Social responsibility and ethics are not optional — they are essential for sustainable growth and public trust.