Answer the following
1) Explain the responsibilities of business towards employees.
Ans. The responsibilities of business towards employees are explained as follows :
1) Job security : Job security (guarantee) gives mental peace to the employees. In order to encourage employees to work with full concentration, dedication and commitment, the business organisation must give job security and frame rules for confirmation of their service and strictly adhere to them. This will in turn raise their morale, interest and loyalty towards the organisation.
2) Fair remuneration : The business organi-sation should pay adequate and attractive salaries along with incentives like overtime allowance, bonus, etc. to all employees. Wages or salaries payable to employees should be fixed by considering nature of work. The business organisations should frame suitable wage plans for increments and timely revision of wages.
3) Health and safety measures : The business organisations is expected to take necessary steps for protecting the health and hygiene of the employees. Proper sanitation, canteen, medical facilities, hygienic conditions, etc. must be provided to them. Proper maintenance of machines and premises must be done to prevent accidents and control pollution. Business organisation should provide safety equipment such as helmets, safety goggles, gloves, shoes, masks, etc. to the employees.
4) Good working condition : The business organisations must provide good working conditions to their employees such as adequate lighting, ventilation, safe drinking water, etc. The business organisations are expected to take necessary steps to avoid and minimise air, sound and water pollution. The business organisation must fix proper working hours and norms (shift wise, if any) with due provisions for lunch break, tea intervals, restrooms, etc.
5) Recognition of Trade Unions : The business organisation must recognise the right of a worker to join a recognised trade union. The management or employer should not prevent workers from forming a trade union. The management should not follow the policy of “Divide and Rule”. Further, the management should solve the problems of the workers amicably by holding face to face interactions, talks, meetings and negotiations with unions. The management and union should agree to ban lockouts and strikes to protect the interest of both the parties. A business organisation is expected to maintain industrial harmony and peace.
6) Education and training : The business organisations are expected to take efforts to educate and train the employees. Depending on the nature of job, the business organisation should offer education, training and guidance to their employees free of cost. To update their knowledge, on the latest development and to increase the efficiency of the employees, the organisation should arrange ‘Refresher in service training’ and `Introduction Training’ at regular intervals.
7) Workers participation in management : The business organisations are expected to encourage workers to participant in the management by forming workers’ committee. The management should encourage the workers through different schemes like suggestion schemes, profit sharing, etc. These schemes enable the management to raise employees’ morale and help the management to give them a sense of belonging.
8) Promotion and career opportunities : Business organisations should offer enough opportunities of promotion to their qualified and talented employees. They should give detailed information about qualification, skills and experience required to get promotions. This will increase awareness and motivate the workers to work hard.
9) Proper grievance procedure : The organi-sation must introduce a suitable grievance (redressal) procedure to deal with the employees’ complaints. All their queries or problems should be sorted out and solved quickly and amicably. The employees must feel satisfied that their complaints are attended properly. Management or employer must investigate and take necessary actions to settle the grievances and complaints.
10) Miscellaneous : Management or employer should – (i) give fair treatment to all employees. (ii) recognise, appreciate and encourage special skills and talents of the employees. (iii) introduce code of conduct for the employees. (iv) protect religious, social, political rights of the employees. (v) allow employees to form informal groups.
2) Define concept of social responsibility and what is the need for social responsibility.
Ans. Meaning and Definition : Social responsibility is an obligation of the business organisation to take those decisions and perform those actions which are desirable to fulfil the objectives and add values to our society. The business organisations are expected to perform all the activities of their business in such a manner that such activities will not cause any harm to any part of the society. In other words, the business enterprises should undertake such activities which will protect and contribute to the interest of society and fulfil their expectations. According to Howard D. Bowen “Social Responsibility is to pursue those policies to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society.” In brief, social responsibility comprises of an element of voluntary action taken by the business people for the benefit of the society.
Need for social responsibility :
1) Concept of Trusteeship : Trusteeship is a socio-economic philosophy that was advocated by Mahatma Gandhi. According to it, rich (wealthy) people would be trustees of the trusts that take care of the welfare of the people in general. Businessmen are treated as trustees of society.
2) Changing expectation of society : Over the years, Society’s expectations from the business organisation have undergone severe change. In earlier days, business firms were recognised as the providers of goods and services. However in recent years society expects that every business organisation as a responsible citizen should contribute towards social welfare of the people in the society.
3) Reputation : Business organisations spend large amount of money in brand building and in creating and strengthening their favourable image. The business organisations which care for every organ of the society and contribute to social well-being enjoy a good reputation in the society. Such organisations always get good support from the public which in turn increases sales, profitability, attraction of talent and sustained growth.
4) Protection of environment : It is the social responsibility of the business organisations to make proper and careful use of country’s natural resources. They should not cause environmental pollution (degradation) like contamination pollution of water resources, depletion of ozone layer, etc. Such type of pollutions result in poor health of the community and put a question mark on the survival of human species/race.
5) Optimum utilisation of resources : Usually, large business organisations have huge amount of resources such as manpower, talent, finance and expert at their disposal to use. It is the social responsibility of business organisations to make optimum use of available resources to protect society’s interests. The organisation should always avoid wastage of resources.
6) Pressure of trade union : The workers have now become more conscious of their rights and privileges. In recent years, trade unions play significant role in business environment. The workers have realised that their efforts contribute to the profits of the business organisation and expect management to pay them fair wages, bonus, etc. to minimise or avoid conflicts between trade unions and management. The business organisations should understand the responsibility towards employees to avoid conflicts and act accordingly.
7) Growth of consumer movement : Advancement and growth in education, development of mass media and growing competition in the market create awareness among the consumers about their rights and powers. Hence, business organisation are required to follow consumer-oriented policies.
8) Government control : From the side of business organisation, government rules and regulations are not desirable. This is because government put certain restrictions and limit the freedom of business organisations. In order to put moral and legal pressure on business, the government has enacted several laws such as Consumer Protection Act, 1986, Air Pollution Act, Food Adulteration Act, etc.
9) Long term self interest : A business organisation and its image stand to earn handsome profit in the long run if its motive is providing services to the society. When the workers, consumers, shareholders, government officials and members of the public feel that a business organisation is indifferent to the social interests, they may withdraw their support to end co-operation. Therefore, it is in the long-term interest of the business organisation to be socially useful and fulfil its social responsibility.
10) Complexities of social problems : Many a time some business organisations themselves create social problems such as discrimination in treatment, unsafe workplaces, different types of pollutions, etc. It is the moral and social obligation of the business organisation to solve these social problems.
11) Globalisation : In globalisation, business activities are conducted throughout the world. In recent years, the entire globe (world) has becomes the market place for buying and selling goods and services produced in any part of the world. Globalisation creates and provides more opportunities, threats and challenges to the business organisations. Those countries in the world which have followed good and fair trade practices capture and influence the entire world trade.
3) Explain the responsibilities of a business unit towards society at a large.
Ans. The following are the social responsibilities of a business unit towards society community/ public in general :
1) Protection of environment : In recent years, pollution becomes one of the major problems. Industries, chemical plants, cement plants, etc. create air pollution and water pollution. The business organisations must take all possible measures to prevent or minimise air and water pollution and maintain ecological balance.
2) Better and maximum use of resources : The business firms must make proper and optimum use of available resources in the larger interest of the society. The resources such as water, land, fuel, raw materials, etc. should be used fairly and efficiently. However, care should be taken not to misuse or waste such resources.
3) Reservation for weaker section : For upliftment of economically weaker section of society, the business organisations are expected to reserve certain positions in their organisations. They should also provide financial and other necessary help to them wherever expected.
4) Development of backward regions : The society expects that the business firms should start their industries in less developed (backward) areas to create employment opportunities. It will increase purchasing power among these people. In this manner, business organisations should make development in backward regions.
5) Protect against anti-social activities : The business organisations should neither undertake nor participate in anti-social activities. They should not provide any financial assistance to anti-social elements. The business firms should avoid anti-social activities such as smuggling, association with underworld (criminal) people, bribing government officials, etc.
6) Financial assistance : The society expects financial helps and donations from the business organisations for various social welfare activities such as eradication of poverty, illiteracy, etc. The society also expects financial assistance from them to organise various awareness programmes like anti-drug campaigns, antinoise pollution campaigns, etc.
7) Prevent congestions : The society expects that the business firms start industries in industrial zones and at different locations. It will minimise the adverse effects like pollution and overcrowded cities in residential areas. This facilitates business firms to provide jobs to local people. This in turn avoids congestion in big cities.
8) Employment generation : The business units should generate and provide better job opportunities to young and well qualified people in all sections of the society. It should make maximum efforts to generate employment through expansion and diversification of its business. This will avoid unemployment and poverty in the society.
4) What are the responsibilities of business towards investors and government.?
Ans: Responsibilities of business towards investors :
1) Proper conduct of meetings : Whenever need arises, a company should call and organise meetings of investors to provide information about the business. Prior to meeting, proper notice and agenda should be sent well in advance. During the period of financial crisis, investors should be convinced and taken into confidence. Reasons for failure should be explained to the investors to gain their confidence.
2) Return on Investment : Investors invest their money in the company by accepting risk. They are entitled by get fair returns on their investment at regular interval in the form of interest. Investors expect the following from the business organisations : (a) fair returns on their investment, (b) safety of their investment and (c) steady and gradual appreciation of the business.
3) Handling grievances : A company is required to pay attention and handle the grievances and complaints of the investors amicably. There should be orderly procedure to solve and deal with grievances without any delay. The business management should answer all the queries of investors regarding any issue in satisfactory manner.
4) Maintain transparency : Investors supply funds for long term and for working capital to carry on business more efficiently. Investors expect that business firms should maintain high degree of transparency in their operations.
5) Proper disclosure of information : A company is expected to disclose full and factual information through regular reports, circulars and statement of profit. The company must provide its financial performance more correctly so that prospective investors are able to take right decisions to invest their money in future.
6) Maintain solvency and prestige : Business organisation or a company is expected to maintain sound financial position, prestige, solvency and goodwill to gain confidence of investors. For this, company should undertake innovation, research and expansion programme on the continuous basis.
Responsibilities of business towards government :
1) Timely payment of taxes : Business organisations are expected to pay various taxes such as sales tax, income tax, corporate tax, excise duty, wealth tax, etc. levied by the government from time to time. These funds enable the government to undertake various development projects.
2) Observing rules and regulations : The business organisations are expected to comply with the various laws, rules and regulations enacted by the government. The company should follow the laws regarding obtaining license of business operation, price determination and production, etc. They should conduct business in lawful manner.
3) Earning foreign exchange : The business organisations are expected to export their products to foreign countries to earn foreign exchange. Foreign exchange is required by the government to import various goods, valuable and important products.
4) Economic development : The government sets the targets for balanced growth and rapid economic development of the country. The business organisation is expected to provide necessary support to the government.
5) Implementing socio-economic policies : The business organisations are expected to provide co-operation and required funds to the government in implementing various socio-economic programmes and policies. (
6) Suggestions to the Government : The business organisations are expected to give suggestions to the government in framing important policies such as Industrial Policy, Import-Export Policy, Licensing Policy, etc. They are helpful to government in framing organisation friendly policies.
7) No favours : The business organisation should not take any favour from the government officials by giving bribes or influencing them in any matter.
8) Contributing to government treasury : The business organisation must contribute by extending financial aid to the government during emergencies and natural calamities like floods.