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Business Environment/ UNIT I

CORPORATE SOCIALCORPORATE SOCIALRESPONSIBILITYRESPONSIBILITY

UNIT I: Chapter-5


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Ackermans Model

Robert Ackerman was among thetheorists who emphasized on the

Micro level analysis, tried to showthat how individual companies canbe more socially responsible. Hedescribed three phases through

which companies commonly tendto pass in developing a responseto social issues.


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Organisational level Phase I Phase II Phase III

Chief Executive

Issue: Corporate

Obligation

Action: Write and

Communicate Policy

Outcome: Enriched

purpose, increased

awareness

Staff Specialists

Issue: Technical

Problem

Action: Design Data

System and

Interpret

environment

Outcome: Technicaland Informational

groundwork

Division Management

Issue: Management

Problem

Action: Commit Resources

and Modify Procedures

Outcome: IncreasedResponsiveness


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Phase I: Chief Executive will identify thesocial problem.

Phase II: Company hires the staff tostudy the problem and suggest thesolution.

Phase III: Division managers implementthe solution.

Where the enlightened companies canmake best information available. Beingresponsive may well be the onlyresponsible course of action.


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Carrolls Four-Part Model:

This Model suggests: Firm must produce the goods and/or

services that society wants and mustsell them at a profit.

Legal responsibilities are also basic.Firms should operate within the law.

EconomicResponsibilities

LegalResponsibility

EthicalResponsibility

DiscretionaryResponsibility


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Contd

Ethical responsibility refers to behavior by

the firm that is expected by society but not

codified into law. These responsibilities are

not well defined, where in specific situationsthey are clear.

Discretionary responsibilities encompass

voluntary activities undertaken for the public

good. It refers to the voluntary contributionof the business to the social cause like

involvement in community development or

other social programmes.


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RESPONSIBILITYTOWARDSDIFFERENT SECTIONS

-- shareholders

-- employees

-- consumers

-- community


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Responsibility to Shareholders:

To protect the interests of the shareholdersand employees and safeguard the capital ofthe shareholders.

To provide dividend, the company shouldearn sufficient profit.

To innovate and growth the company shouldconsolidate and improve its position andhelp strengthen the share prices.

To improve and maintain the image of thecompany, such that the shareholders shouldfeel proud of their company.


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Responsibility to Employees:

The payment of fair wages andappropriate salaries.

The provision of labor welfare facilitiesto the extent possible and desirable.

Arrangements for proper training andeducation of the workers.

Proper recognition, appreciation andencouragement of special skills andcapabilities of the workers.


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Responsibility toConsumers:

To improve the efficiency of the functioning ofthe business so as to (a) increase productivityand reduce prices, (b) improve quality, and (c)

smoothen the distribution system to makegoods easily available.

To do research and development, to improvequality and introduce better and new productsat reasonable prices.

To take appropriate steps to improve theimperfections in the distribution system,including black-marketing or profiteering bymiddlemen or anti-social elements.


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Contd

To Provide the required after sales services.

To provide sufficient information about theproducts, including their adverse effects, risks,

and care to be taken while using the products. To avoid misleading the customers by

improper advertisements or otherwise.

To provide an opportunity for being heard and

to redress genuine grievances. To understand customer needs and to take

necessary measures to satisfy these needs.


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Responsibility toCommunity:

Taking appropriate steps to preventenvironmental pollution and to preserve theecological balance.

Rehabilitating the population displaced bythe operation of the business, if any.

Development of backward areas.

Promotion of ancillarisation and small-scale

industries.

Contributing to the national effort to build upa better society.


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Arguments for SocialResponsibility:

Changed Public Expectations of Business.

Better Environment for Business.

Public Image.

Avoidance of Government Regulations.

Balance ofResponsibility with Power.

Business has the Resources.

Prevention is Better than Cure.

Moral Responsibility. Citizenship Arguments.

Duty of Gratitude.


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Arguments against SocialResponsibility

Profit Maximization.

Society has to pay the Cost.

Lack of Social Skills.

Business has enough Power.

Social overhead Cost.

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