SOCIAL RESPONSIBILITY

• Managers in the organisation are concerned with both internal and external environments.

• Managers always plan considering the wants and desires of members of the society outside the organisation.

• For most organisations, social responsibility is a way of life. It entails all such activities ranging from providing safe products and services to giving a portion of company’s profits to welfare organisation.

Social Responsibility of BusinessSocial responsibility of business is also viewed as conducting its operations in a free and fair manner by discharging its commitment towards different segments of its operational environment such as:

1. Responsibility towards Shareholders2. Responsibility towards Consumers3. Responsibility towards Employees4. Responsibility towards Creditors5. Responsibility towards Government6. Responsibility towards Suppliers7. Responsibility towards Competitors8. Responsibility towards General Public

ROLE OF GOVERNMENT

• Social changes can be implemented only by law.• There are many instances to prove it.• Eg., The Central Board of Direct Taxes,

Government of India increased its tax collection efficiency and effectiveness by introducing a simple tax return format called “SARAL”.

• This idea was to make tax-return formats more user friendly and eliminate intermediaries like tax consumers.

THE SOCIAL AUDIT• Social Audit is the main tool to evaluate Corporate Social Responsibility.

• It involves a commitment to systematic assessment of the company’s main activities that have a social impact and reporting to the society on relevant issues.

• Social Audit encompasses every possible area, such as Pollution Control, Training and Development, Promotion of Minorities and so on.

Difficulty:

i. It is difficult to determine the amount of money an enterprise spends in selected areas. Cost is an inadequate measure and does not show the results of social involvement.

ii. Other problems are the collection of the data and its presentation in a way that accurately reflects the social involvement of an enterprise.

ETHICS IN MANAGINGEthics refer to what is good and bad and is related to moral duty

and obligation.

Different types:

a. Personal Ethicsb. Accounting Ethicsc. Business Ethics

Implementing Ethical Concepts may be implemented in 3 ways:

1. Establishing appropriate company policy as a code of ethics.2. Involve a formally appointed Ethics Committee.3. Teach Ethics in Management Development Programs.

CODE OF ETHICS

Code of Ethics is a statement of policies, principles or rules that guide behaviour.

It do not only apply to business enterprise; they should guide the behaviour of persons in all organisation and in every day of life.

ETHICS COMMITTEE

Code of Ethics has to be necessarily supplemented by the appointment of an Ethics Committee, consisting of internal and external directors.

The functions of the Committee include:

• Holding regular meetings to discuss ethical issues.• Dealing with ‘Gray Areas”.• Communicating the code to all members of the organisation.• Checking for possible violation of code.• Enforcing the code.• Rewarding the compliance and punishing violations.• Reviewing and updating the code.• Reporting activities of the committee to Board of Directors.

Factors that raise Ethical Standards

The factors that raise ethical standards are:

a. Public disclosure and publicity.b. The increased concern of well-informed

public.c. Government regulations.d. Educational Programmes in Ethics.

Suggestions to develop Ethical Conduct

There are certain suggestions in developing Ethical Conduct throughout an organisation.

I. Provide Guidelines for Ethical Behaviour.

II. Teach Ethical Guidelines and their importance.

III. Do not get into problem areas that invite criticisms.

IV. Appoint an outside agency (that reports directly to BOD) to audit the ethical behaviour of managers.

V. Punish trespassers in a meaningful way and make it public so that it may deter others.

VI. Emphasize regularly that loyalty to the company does not excuse improper behaviour or actions.