Ethics and Social Responsibilities of Business Essay

It is cardinal fact that the emergence of focal point as a distinct and identifiable activity in the redbrick era has had an important impact on the society with which it developed (Massie 29). notwithstanding during the early the early days of the 20th century, most of the occupation corporations were preponderantly concerned with their singular objective of profit maximization. As a takings of stark reality, trading corporations be open system and, resultantly, they need to unceasingly interact with the society.Hence, m all hearty activists began to question this singular motive of organisation during the later part of the anterior century. Many scholars like Bowen, pointed out that since the corporations draw a bead on their existence from the society, it must hold certain obligations towards the bet bourneent of the later. Gradu onlyy, in the modernistic propagation, vocation morality and corporate kindly right (CSR) became a erudition of conduct for almost all the occupancy units (McNamara). In very aboveboard terms, business ethics is a study of morality and standards of conducts (Fred and Richard, 480). By the term ethics we generally used to refer to the rules or principles which define in good order and wrong code of conduct. According to Walton, business ethics is concerned with true(p)ness and justice and has variety of aspects such as expectations of the society, fair competition, advertizing, unexclusive relations, genial responsibilities, consumer autonomy, and corporate behavior in the home country as puff up as abroad (qtd. in Paul, 66). In the modern era, the expectations and demand of the guests and the society as a whole has changed a lot, and hence, most of the business shapings have be flummox more and more aware of their honest and favorable responsibilities towards their interest groups. According to Kenneth R. Andrews, the term honorable and social state pissed the intelligent and objective concern for the eudaimonia of society that restraints various(prenominal) and corporate behavior from ultimately destructive activities, no matter how instantaneously profitable, and leads in the direction of positive contribution to human betterment (qtd. in Ray 24).Thus along with promoting its own interests, business should unendingly stock in a responsible manner towards the interests and betterment of its employees, customers, creditors, government, shareholders and the society as a whole. Thus, as Davis and Robert have right observed, corporate social accountability indicates the managements commitment towards upholding the interests of direct stakeholders and to behave in an economicalally and environmentally responsible manner (Davis and Robert, 1975).To What Extent Should Business be compound in fulfilling neighborly ObligationsFor more than two centuries, the debate has still been spillage on about whether business should take in social and ethical responsibilities towards th e society. If so, then the question naturally arrives to what extent business should involve itself towards the betterment and wellbeing of the former? An analysis of facts and arguments are sure to make this point watch crystal clear. These are discussed hereunder as followsArguments against Businesses Involvements First of all, the principal objective of business is to generate profit and, hence, any involvement in social personal matters or much(prenominal) ethical behavior is surely directed against this motive. In the views of Milton Friedman, moreover people can have responsibilities business as a whole, considered as artificial person, cannot be expected to possess such responsibilities. The sole(prenominal) responsibility that business should have is to maximize its profits (Friedman 1970). Secondly, businesses have to stimulate excessive cost for any social involvements. But, where from this cost will come? This cost is generally adjusted by increasing the selling terms of goods produced and services rendered by the business. Hence, the corporate executives would be spending someone elses money for a general social interest (Friedman 1970). Hence, as a result of businesses involvement in social affairs, the society itself has to bear the warhead of this excess cost. As Levitt puts it, the results would be socially less desirable than the previous days when firms were predominantly concerned with their only objective of profit-maximization (1958). Thirdly, since any social involvements is sure to augment the price of products, the MNCs operating at overseas markets may face stiff competition from the local counterparts which may not be involved in fulfilling ethical and social obligations. This may create an gelded international balance of payments (BoP). Fourthly, too much social involvements may immensely enhance the power and authority of business through political and social means itself. This can ultimately corrupt them in the subseq uent times (Richard and Fred 480). Fifthly, business executive lacks social skills and are not effective in handling social affairs. According to Friedman, the managers should concentrate on what they know the better(p) how to make profits (1970). Finally, there are no specifically defined parameters of ethical and social responsibility. What does it mean to say that the corporate executive has a social responsibility? (Friedman 1970). There is no agreement that clearly defines what sign of social, ethical and moral responsibilities that businesses should undertake.Arguments for social and Ethical ResponsibilitiesThe modern world has witnessed a drastic change in the expectations of the society.First of all, every business organization is a part of the social system. It earns its profits from the society in which it operates. Organizations should, therefore, al modes consider the impacts of its decisions on the society. Since businesses earn their profits from the society, the former must possess certain responsibilities to the later.Secondly, both the society and business are equally benefited when a symbiotic relationship exists between the two. The society gains through economic developments and reduction of unemployment rate, and, on the other hand, business is benefited through the customers and workforce supplied by the society.Thirdly, a positive social protrude helps the business to increase its brand image in the eye of the consumers and thereby increasing the number its loyal customers. A favorable public image helps the business to attract and retain well(p) employees, great investors etc.Fourthly, a favorable public image helps the business to avoid the vigil eyes of the government and other regulatory agencies. It certainly provides greater independence and flexibility in the mode of their operations.Fifthly, social responsibility involves the conservation of natural resources which is very much beneficial not only to the society, but als o for the business itself. Many products, like cans, bottles etc., which were considered as wastes in the earlier days, can now be recycled and profitably used.Sixthly, business possess considerable amount of power and authority the exercise of this power should be balanced through a simultaneous display of ethical responsibility.Finally, business should prevent social problems for its own interests. Instead of allowing large scale unemployment jumper lead to social political unrest, which can eventually spoil the operations of business in the subsequent times, business organization can rather effect the source of employment for qualified and eligible people.Social and Ethical indebtedness on Interests GroupsThe International Seminar on Social Responsibility of Business has rightly observed that business corporations should be responsible to the following interests groupsShareholders The shareholders provide the set up resources i.e. the capital to the business for its existenc e, emergence and development. Hence, the later must protect interests of the former.Employees Employees are the most important assets for any organizations. It is through the employees that the business runs itself. In the earlier days, the management regarded its employees as only a factor of production and, therefore, denied their true rights. However, modern managements have rightly understood that unless the employees are happy, it is very much difficult to reach high levels of customers satisfaction.Customers The most prospered businesses of the world put the customer first, ahead of the investors (Mackey 2005). Modern organizations have established the importance of keeping the customers satisfied. The growth of consumerism has contributed much to this realization.Creditors The major inputs like machine, money, materials etc. are supplied by the creditors. Hence, business must behave ethically and responsively towards them. federation Every business corporations, being open systems, operates within a social system. It draws its resources from the society in which it operates. Hence, it must be socially responsible for the welfare of the later.Government It is the government of a country of state that provides the primary facilities for the growth and development of the business. Most of the governmental decisions are subjected towards the growth and betterment of the business. Hence, the business, in its turn, should behave ethically and in a socially responsible way towards the government.ConclusionEvery business organization is a part of the economic and political system and not an isolated island without any foreign relations. It is the sum total of a network of relationships to individuals, groups, and things (Reddy and Tripathy 295). Hence, the management should always consider the impacts of their decisions on all the interest groups with which it is closely bonded.The business should operate as a legal guardian for the wellbeing of its employ ees, customers, the government, suppliers and creditors, shareholders and the society as a whole. In fact, the managements duty is to mediate among all these social stakeholders in order to hold back that each of them gets a square deal and none of their interests and benefits are unduly sacrificed to those of the others. Social and ethical responsibilities are managements responsiveness to public consensus (Adolph 1963). Every civil citizen must possess some social and ethical responsibilities. True that the business corporations are considered as artificial persons but does that mean it should not possess any obligations towards the welfare of the system in which it grows and develops?Obviously, to increase profit is one of the prime motive of every business and from this point, any social involvements reduces the percentage of profit for the business. But, from a wider perspective, it can be cerebrate that, business corporations should behave ethically and contribute to econom ic development turn improving the quality of life of the workforce and their families as well as of the local community and society at large (Holme and Watts).ReferencesAdolph, A.B. The American stinting Republic, Harcourt Brace and World, vernal York,1963Corporate Social Responsibility Evolution of a Definitional Construct Carroll Business Society.1999, 268-295Davis, K. and Robert, L. B. Business and Society, Environment and Responsibility, RevisedEdition, Tata McGraw Hill intelligence Company Inc. New York, 1975Friedman, M. The Social Responsibility of Business is to Increase its Profit, New YorkTimes Magazine, 13 September, 1970Friedman, M. ibid, 1970Friedman, M. ibid, 1970Holme, L and Watts, R. The World Business Council for Sustainable Development, doGood Business Sense http//www.mallenbaker.net/csr/CSRfiles/definition.htmlLevitt, T. The Dangers of Social Responsibility, Harvard Business Review, Sept, 1958.Mackey, J. (qtd. in) Rethinking the Social Responsibilities of Busi ness, October 2005 http//www.reason.com/ intelligence operation/show/32239.htmlMcNamara, C. Complete Guide to moral philosophy Management An Ethics Toolkit for Managershttp//www.managementhelp.org/ethics/ethxgde.htmMassie, J.L. Ethical and Environmental Foundations, Essentials of Management, FourthEdition, Prentice-Hall of India, New Delhi, 1995, 29Paul, C. Ethics in Business, initiation to Management, Modern Book House, Calcutta, India, 1989, 66Ray, S.M. Corporate Social Responsibility, An Introduction of Management Thoughts,Oriental Publications, New Delhi, 1979, 24Redddy, P.N. and Tripathy, P.C. Social Responsibilities of Business, Principles ofManagement, Tata-McGraw Hill, New Delhi, 1995, 295Redddy, P.N. and Tripathy, P.C. ibid,Richard, M.H. and Fred, L. Ethics and Social Responsibilities, International Management,Third Edition, McGraw Hill International Editions, 1997, 480Richard, M.H. and Fred, L. ibid, 481Stehi, S.P, Dimensions of Corporate Social Performance, An analytica l Framework,California Management Review, Vol. 17, No. 3, 1975, p. 58-64The International Seminar on Social Responsibilities of Business (qtd. in Mukharjee,P.B. Social Responsibilities of Business, 1994, 09