SOCIAL RESPONSIBILITY OF A BUSINESS

CONCEPT OF SOCIAL RESPONSIBILITYTo act in a manner which will serve the best interest of the society.Refers to the concern for the welfare of the society

NEED FOR SOCIAL RESPONSIBILITY/ (CASE FOR THE ASSUMPTION OF SOCIAL RESPONSIBILITY)

ARGUMENTS AGAINST SOCIAL RESPONSIBILITY (CASE AGAINST THE ASSUMPTION OF SOCIAL RESPONSIBILITY)Profits are required for committing any cost towards social causeDifficult to estimate positive impactOnly an assumption not an obligationExtent is limited: responsible for only those factors that are related to business.Society should itself safeguard its interestsComplex ethical issues

ARGUMENTS AGAINST SOCIAL RESPONSIBILITY

SOCIAL RESPONSIBILITY OF A BUSINESS TOWARDS DIFFERENT GROUPS

THE USE OF SOCIAL RESPONSIBILITY OF A BUSINESS TOWARDS SOCIETY

PUMAs searchfor a viable alternative to leather could pay huge dividends in the long run.Since the beginning back in 1971,Starbucks Coffeeaims on acting responsibly and ethically. One of their focuses is the sustainable production of green coffee; C.A.F.E.The company supports Ethos Water( a company) that brings clean water to more than 1 billion people who does not have access to it.

Aptech a leading education player with a global presence that has played a broad and continued role in encouraging and nurturing education throughout the country since its inception. As a global player with complete solutions-providing capabilities, Aptech has a long history of participating in community activities. It has, in association with leading NGOs, provided computers at schools, education to the deprived, and training and awareness-camps.

Tata Group Tata Group in India has a range of CSR projects, most of which are community improvement programs. For example, it is a leading provider of maternal and child health services, family planning, and has provided 98 percent immunization in Jamshedpur. The company also endorses sports as a way of life. It has established a football academy, archery academy, and promotes sports among employees. It offers healthcare services all over the country with programs like rural health development.Tata Group also has an organized relief program in case of natural disasters, including long-term treatment and rebuilding efforts. It did laudable work during the Gujarat earthquakes and Orissa floods. It also supports education, with over 500 schools. It has done abundant work in improving the environment and local populations around its industries.

GO NATURAL, THROUGH AND THROUGH: BURT'S BEES The focus for Burt's Bees has always been on well being and "the greater good." As part of the Natural Products Association, the company helped develop The Natural Standard for Personal Care Products, which created guidelines for what can be deemed natural. Burt's Bees follows the highest possible standards for packaging sustainability, furthering its dedication to the cause as a member of the Sustainable Packaging Coalition. Since the brand's start at a crafts fair selling $200 worth of honey, the company has since expanded to candles, lip balm and now more than 150 products. In 2009, revenue topped $250 million.

USING ITS ECOMAGINATION: GE To stay true to GE's mission, Ecomagination offerings include products that significantly and measurably improve customers' operating performance or value proposition and environmental performance. Ecomagination helped GE build its business by increasing awareness of how the company is using renewable energy and reducing carbon emissions. As proof of the effectiveness of GE's program, the Ecomagination portfolio has grown from 17 products to more than 80 today, with revenues reaching $17 billion in 2008, an increase of 21% over 2007.

BREWED RESPONSIBLY: STARBUCKS COFFEE Since Starbucks Coffee started in 1971, the company has focused on acting responsibly and ethically. One of Starbucks' main focuses is the sustainable production of green coffee. With this in mind, it created C.A.F.E. Practices, a set of guidelines to achieve product quality, economic accountability, social responsibility and environmental leadership. The company supports products such as Ethos Water, which brings clean water to the more than 1 billion people who do not have access. To date, Ethos Water has committed to grants totaling more than $6.2 million. THE SWEET DELIGHT OF GIVING BACK: BEN & JERRY'S Ben & Jerry 's founders Ben Cohen and Jerry Greenfield have infused the company with the notions of giving back in every way possible, as well as "linked prosperity" between the company, its employees and the community. They started the Ben & Jerry 's Foundation, were founding members of the Business for Social Responsibility organization and set an extraordinary rate of giving to charitable organizations in the corporate world, donating a full 7.5% of pretax profits. In their own words, they "strive to show a deep respect for human beings inside and outside our company and for the communities in which they live." Unilever bought Ben & Jerry 's in 2000 and continues to support the foundation; it donated $2 million in 2009.

SOCIAL AWARENESS CAN LOOK SO GOOD: KENNETH COLE Since 1985, Kenneth Cole has been openly involved in publicly supporting AIDS awareness and research. He uses fashion to promote awareness of, and help fight, various social issues. After 25 years of addressing meaningful social issues, Kenneth Cole established the Awearness Fund, a not-for-profit initiative that uses partnerships, merchandise, events and its blog to celebrate, encourage and empower acts of service volunteerism and social change. A full 100% of net proceeds of the Awearness products go toward the fund. These efforts have helped fuel the success of the Kenneth Cole brand, a company with nearly $500 million in sales.

LENDING A HAND TO MAN'S BEST FRIEND: PEDIGREE Pedigree dog food built its brand by focusing on the need for people to adopt homeless dogs. Funding the support and care of these animals and sponsoring a national adoption drive, Pedigree's 2009 goal was to distribute $1.5 million in grants to 1,000 shelters and breed rescues. Pedigree donates one bowl of food to animal shelters every time it gets a Facebook fan, and it did the same when the company's 2009 Super Bowl commercial was viewed online. Pedigree's goal is to donate 4 million bowls of dog food, enough to feed every shelter dog in America for one day.

THE NEW MEANING OF CLEAN: METHOD As a cleaning product, Method hit the jackpot. While cleaning products historically contained hazardous chemicals, Method was able to make safe and effective home and personal cleaning products derived from natural ingredients such as soy, coconut and palm oils. The products also come in environmentally responsible, biodegradable packaging. As one of the fastest-growing companies in the world, and with $100 million in annual revenue, Method proves that socially responsible products can be wildly successful. BEAUTY COMES FROM WITHIN: THE BODY SHOP The Body Shop is regarded as a pioneer of modern corporate social responsibility as one of the first companies to publish a full report on its efforts and initiatives. Founder Anita Roddick led her company to stand up for its beliefs and champion causes such as self-esteem, environmental protection, animal rights, community trade and human rights. From sponsoring posters in 1985 for Greenpeace to presenting a petition against animal testing to the European Union with 4,000,000 signatures, The Body Shop has contributed significantly to the causes it supports, and exemplifies how other companies can do the same.

A SHOE FOR ME IS A SHOE FOR YOU: TOMS SHOES Blake Mycoskie started Toms Shoes on the premise that for every pair of shoes sold, one pair would be donated to a child in need. This innovative idea resulted from a trip to Argentina where Mycoskie saw an overwhelming number of children without shoes. Toms Shoes recognized that consumers want to feel good about what they buy, and thus directly tied the purchase with the donation. In just four years, Toms Shoes has donated more than 400,000 shoes, evidence that consumers have clearly embraced the cause.

A WHOLE LOT OF GOOD: WHOLE FOODS Whole Foods supports sustainable agriculture, promotes the reduction of waste and consumption of nonrenewable resources and encourages environmentally sound cleaning and store-maintenance programs. The company created the Local Producer Loan program, which provides up to $10 million in low-interest loans to small local producers to help grow their businesses. Whole Foods has also created Whole Planet Foundation, which fights poverty through micro lending in rural communities around the world. The foundation has raised $1.5 million to help 40,000 women lift themselves out of poverty by empowering micro entrepreneurs.

BUSINESS ETHICS AND VALUES

PRACTICE QUESTIONS

DIFFERENCE BETWEEN VALUES AND ETHICSValues are the basic beliefs that an individual thinks to be true. Every individual has a set of values through which he looks at all things and also at the world. Ethics is guidelines or rules that are set for a society or an organization rather than for an individual.Values can be said to be the guiding principles in ones life. Value can be defined as a bridge by which an individual makes a decision regarding good and bad, right or wrong, and most important or less important.Ethics can be defined as set of unwritten or written rules formulated by a country or a company or some institutions. Ethics is mainly based on the moral values

EXAMPLEMany therapists do marriage counseling.They try to help couples develop a more positive relationship. In some cases, however, it may be better for the couple to split up, especially if there is abuse involved. Through the course of therapy, however, the therapist may continue to try and reconcile the couple because of the therapists own issues with divorce, rather than doing what is best for the couple, or even what the couple may want. A therapist has an ethical responsibility to the client, even though that responsibility may not match the therapist's own values.

EXAMPLE CONTINUEAll of the major national associations of therapists (e.g. AAMFT, APA, etc.) have developed ethical codes. These codes are aimed at making all therapists aware of how to deal with certain problems that can arise in the course of therapy, such as dating with clients. Here again, it is important to think about your own ideas on this topic. Some therapists do not see anything wrong with dating former patients. Some of the organizations, however, forbid it. AAMFT's ethical code states that therapists cannot date former clients until 2 years after the therapy is over, while other organizations forbid it all together. There are still many therapists who feel that these restrictions are too tough, thus having a problem with the difference between their values (it is alright for me to date a former client) and their professional ethics.

MEANING OF SOCIAL VALUESValues on the basis of which members of a society judge each others conduct or behaviour are known as social values.Social values determine what individual members of a society considers to be good or bad for the society.Eg. If a business enterprise sells adultered goods using false weights then society considers it bad.

BUSINESS ETHICSBusiness practices which are desirable from the point of view of society.Business ethics provides code of conduct to the managers which guides them how to govern business activities.Examples:Charge fair pricesUse fair weights measurementsPay taxesFair treatment to workers

BUSINESS ETHICS HAVE GAINED IMPORTANCE DUE TO SOME FACTORS

CORPORATE GOVERNANCECorporate governance means that company manages its business in a manner that is accountable and responsible to the shareholders. In a broader terms it includes the accountability of a company towards its stakeholders like employees, customers and community.There should be well defined system and processes.

MAIN ISSUES IN CORPORATE GOVERNANCE

PRINCIPLES OF CORPORATE GOVERNANCE

PRACTICE QUESTIONS

Features of social responsibility

Business is a part of societyWelfare of a society Values of a society Aspirations of a societyIt goes beyond the limits of a countryIt has a significant influence on the social system of a country Involves obligations and duties that business owes to societyBusiness is no longer a tripartite venture:owners, workers & consumers; it has become a multiparty system

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