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Social Responsibility in Business
By Abhishek Banerjee Abu Talib Annapurna Ghosh Richika Sureka Silky Batra Varun Mittal
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Agenda Introduction Business has a Social Conscience
Social Responsibility Continuum Balancing Stakeholders’ Rights Social Responsibility Corporate Examples
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Introduction Social responsibility is a doctrine that claims that an entity whether it is state, government, corporation, organization or individual has a responsibility to society Positive Responsibility to act Negative Responsibility to refrain from acting Implication Corporations have an implicit obligation to give back to society Social responsibility is a doctrine that claims that an entity whether it is state, government, corporation, organization or individual has a responsibility to society. This responsibility can be "negative," in that it is a responsibility to refrain from acting, or it can be "positive," meaning a responsibility to act. It can also imply that corporations have an implicit obligation to give back to society.
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Introduction Responsibility to profitably serve suppliers and customers in an ethical and lawful manner. An organization's obligation to maximize its positive impact and minimize its negative impact on society.
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Business’ Social Responsibility
Responsibility of a responsible agent who Chooses to participate in a society Acquire the benefits of the society Ethical obligations towards Customers, employees, and the general community Code of ethical behavior towards Environment, customers, employees, and investors Collective code of ethical behavior towards The environment, its customers, its employees, and its investors Ethical obligations towards Customers, employees, and the general community The responsibility of a responsible agent who chooses to participate in a society and acquire the benefits thereof
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Business has a “Social Conscience"
Responsibilities for providing Safe products Employment Eliminating discrimination Protect the environment
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Business has a “Social Conscience”
Refrain from increasing the price of the product Contribute in preventing inflation Make expenditures on reducing pollution Contribute in improving the environment Hire "hardcore" unemployed instead of better qualified available workmen Contribute in reducing poverty he is to refrain from increasing the price of the product in order to contribute to the social objective of preventing inflation, even though a price in crease would be in the best interests of the corporation. he is to make expenditures on reducing pollution beyond the amount that is in the best interests of the corporation or that is required by law in order to contribute to the social objective of improving the environment. at the expense of corporate profits, he is to hire "hardcore" unemployed instead of better qualified available workmen to contribute to the social objective of reducing poverty
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Social Responsibility Continuum
Do more than required; e.g. engage in philanthropic giving Integrate social objectives and business goals Fight social responsibility initiatives Balance profits and social objectives Maximize firm’s profits to the exclusion of all else Do what it takes to make a profit; skirt the law; fly below social radar Lead the industry and other businesses with best practices Comply; do what is legally required Articulate social value objectives
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Balancing Stakeholders’ Rights
Business Investors Consumers Employees Society Profits Fair Disclosure Informed Purchase Equity Health & Safety Clean Environment Safe Products Product Choice
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Social Responsibility in Business
Early 20th Century Middle 20th Century Early 21st Century Maximize Profits Provide Jobs and Pay Taxes Balance Ethics and Profits
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Conflict of Interest Occurs when a business is tempted to put profits before social welfare
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Social responsibility
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Evolving Viewpoints SR considers the impact of the company’s actions on society (Bauer) SR requires decision makers to take actions that protect and improve the welfare of society as a whole along with their own interests (Davis and Blomstrom) SR mandates that the corporation has not only economic and legal obligations, but also certain responsibilities to society that extend beyond these obligations (McGuire)
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Corporates practicing SR
Business is obligated to use its resources in ways that benefits society Protects business self-interest Limits future government intervention Addresses issues by using business resources and expertise Addresses issues by being proactive
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Corporates not practicing SR
Use of resources for greater good will decrease profits or increase prices or both Restricts the free market goal of profit maximization Business is not equipped to handle social activities Limits the ability to compete in a global marketplace
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Corporate Examples Google Infosys Tata Johnson and Johnson
Proctor and Gamble And many more… Google keeps employees happy by providing insurance, retirement plans, vacation time, doctors, transportation, classes, Halloween and holiday party, health fair, credit union, sauna, roller hockey, outdoor volleyball court, discounts for products and local attraction, on site services, tuition reimbursements, adoption assistance, and much more! SAS keeps their employees happy by providing health care plans, pays vacation time, discounts, scholarship programs, flexible work schedules, family benefits, training classes, disability plans and more!
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Social responsibility principles for managers
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What should managers do?
Acknowledge and actively monitor the concerns of all legitimate stakeholders Take their interests appropriately into account in decision-making and operations Openly communicate with stakeholders about Their respective concerns and contributions The risks that they assume because of their involvement with the corporation Principle 1: Managers should acknowledge and actively monitor the concerns of all legitimate stakeholders, and should take their interests appropriately into account in decision-making and operations. Principle 2: Managers should listen to and openly communicate with stakeholders about their respective concerns and contributions, and about the risks that they assume because of their involvement with the corporation.
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What should managers do?
Fairly distribute the benefits and burdens of corporate activity among stakeholders, taking into account their respective risks and vulnerabilities Work cooperatively with other entities, to insure that risks arising from corporate activities are minimized Avoid activities that might jeopardize human rights Managers should adopt processes and modes of behavior that are sensitive to the concerns and capabilities of each stakeholder constituency. Managers should recognize the interdependence of efforts and rewards among stakeholders, and should attempt to achieve a fair distribution of the benefits and burdens of corporate activity among them, taking into account their respective risks and vulnerabilities.
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Conclusion
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"there is one and only one social responsibility of business -to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.“ - Milton Friedman
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Thank you…!
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