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Assignment - Social Ethical Res Mang.

The document discusses the social responsibilities of management and businesses. It defines social responsibility as management being responsible not only to shareholders but also to other stakeholders such as workers, customers, creditors, suppliers, government, and society. It provides arguments for why businesses should have social responsibilities, such as changing public expectations, avoiding government intervention, and creating a favorable public image. It also defines social stakeholders as shareholders, employees, customers, creditors/suppliers, society, and government. Finally, it explains that social audits measure an organization's social responsiveness and can be required by government or done voluntarily.

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17 views3 pages

Assignment - Social Ethical Res Mang.

The document discusses the social responsibilities of management and businesses. It defines social responsibility as management being responsible not only to shareholders but also to other stakeholders such as workers, customers, creditors, suppliers, government, and society. It provides arguments for why businesses should have social responsibilities, such as changing public expectations, avoiding government intervention, and creating a favorable public image. It also defines social stakeholders as shareholders, employees, customers, creditors/suppliers, society, and government. Finally, it explains that social audits measure an organization's social responsiveness and can be required by government or done voluntarily.

Uploaded by

aishasiddiq5784
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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ASSIGNMENT

Unit 3: Social & Ethical Responsibilities of Management

1. What are social responsibilities of management?

“Social responsibility contends that management is responsible to the organization itself and to
all the interest groups with which it interacts. Other interest groups such as workers, customers,
creditors, suppliers, government and society in general are placed essentially equal with
shareholders”.
According to the above definition’s managers should pay attention to the welfare of workers,
consumers’ needs and their safety, the interests and rights of creditors, government regulations
and the obligations of the organization towards society as a whole.

2. What are the arguments for social responsibilities of business?

Following are the arguments for social responsibilities of business:


• Change in public expectations: The needs of today’s consumers have changed,
resulting in a change in their expectations of businesses. Since businesses owe their
profits to society, they have to therefore respond to the needs of society.

• Business is a part of society: Society gains through economic development and the
provision of employment opportunities; and business benefits through the workforce
and consumers provided by society

• Avoiding intervention by Government: By being socially responsible, organizations


attract less attention from regulatory agencies. This gives them greater freedom and
flexibility in their operations

• Balance of responsibility and power: Businesses have considerable power and


authority. The exercise of this power should be accompanied by a corresponding
amount of responsibility

• Impact of internal activities of the organization on the external environment: Most


firms are open systems ie they interact with external environment. To avoid a
negative impact on the eternal environment firms should be socially responsible.

• Projecting shareholder interests: By being socially involved, a company can improve


its image and thus protect its shareholders’ interests.

• New avenues to create profits: Social responsibility involves the conservation of


natural resources. Conservation can be beneficial for firms. Items that had been
considered waste earlier can be recycles and profitably used again.

• Favorable public image: Through social involvement, a firm can create a favorable
pubic image for itself and endear itself to society. By so doing, a firm can attract
customers, employees and investors.

• Endeavor to find new solutions: Businesses have a history of coming up with


innovative ideas. Therefore, they are likely to come up with solutions for social
problems, which other institutions were unable to tackle.

• Best use of resources of a business: Businesses should make optimum use of the skills
and talent of its managerial personnel as well as its capital resources to produce good
quality products and services. By doing so, the business will be able to fulfil their
obligations toward society.

Prevention is better than cure: It is in the interests of business organizations to prevent social
problems. Instead of allowing large-scale unemployment to lead to social unrest, businesses
can be sources of employment for eligible youth

3. What are social stakeholders?

Business enterprises are primarily accountable to 6 major interest groups


 Share holders
 Employees
 Customers
 Creditors and suppliers
 Society
 Government

These groups are also known as social stakeholders


• Shareholders: They provide the core resource – the capital – that enables an
organization to operate and grow. They expect the management to use the capital in
judiciously and operate the business in a way that ensures a good return on their
investment. They should be provided with adequate and timely information about
the functioning of the organization.

• Employees: They are the biggest asset of the organization. It is mandatory for
business firms to protect the interests of their employees.

• Customers: In recent years, customers have received great attention. Firms have
begun to realize the importance of keeping customer happy. Moreover, the growth of
consumerism has made firms more aware of their duties towards consumers.

• Creditors and suppliers: They are responsible for providing inputs of production
process in the form of raw materials and capital. Management is responsible for
fulfilling its obligations to its creditors and suppliers.

• Society: Organizations function within a social system and draw their resources from
this system. Therefore, they have certain obligations towards society. The
management of business organization can fulfil their obligations toward society by
preserving and enhancing the well-being of the members of society.

• Government: The government of a country provides the basic facilities required for
the survival and growth of businesses. The government monitors and to a certain
extent, controls the business systems of the country. Most of the controls imposed by
the government are in the best interests of businesses.

4. What is Social Audit?

Social audits arose from the need to measure the social responsiveness of organization. Social
audits enable management to identify the direct financial benefits as well as the intangible
benefits to the organization from socially responsible behavior.
It is broadly distinguished into two types:
 Those required by the government
 Voluntary social programs

The audits imposed by the government involves the audit of pollution control measures, audit
of product performance and audit of equal employment standards. The second type includes
voluntary audits made by companies to identify the extent of their social responsiveness.

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