Samacheer Kalvi 11th Commerce Solutions Chapter 17 Social Responsibility of Business and Business Ethics

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Samacheer Kalvi 11th Commerce Solutions Chapter 17 Social Responsibility of Business and Business Ethics

Samacheer Kalvi 11th Commerce Social Responsibility of Business and Business Ethics Textbook Exercise Questions and Answers

I. Choose the Correct Answer

Question 1.
Which type of Responsibility gives the benefit to the Society out of its profits earned?
(a) legal
(b) Ethical
(c) Moral
(d) Economic
Answer:
(c) Moral

Question 2.
The Stakeholders of Socially Responsible business units are except ……………..
(a) Share holders
(b) Employees
(c) Government
(d) Company
Answer:
(d) Company
Samacheer Kalvi 11th Commerce Solutions Chapter 17 Social Responsibility of Business and Business Ethics

Question 3.
Assuming Social Responsibility of business helps the enterprise in
(a) Increase profit
(b) Decrease profit
(c) Sustainability
(d) Equilibrium
Answer:
(c) Sustainability

Question 4.
Socially Responsible business provides goods at ……………..
(a) High price
(b) Low price
(c) Reasonable price
(d) Moderate price
Answer:
(c) Reasonable price

Question 5.
Social Responsibility towards employees represents the following except ……………..
(a) Reasonable remuneration
(b) Proper facilities
(c) Social security
(d) Exploitation
Answer:
(d) Exploitation

II. Very Short Answer Questions

Question 1.
What do you mean by Social Responsibility?
Answer:
It is the idea that businesses should balance profit-making activities with activities which give benefits to society. The benefits which are earned through society are known as the Social Responsibility of business.

Question 2.
Give the meaning of Social Power.
Answer:
Businessmen have considerable social power. Their decisions and actions affect the lives and fortunes of society. Businessmen should assume social obligations commensurate with their social power.

Question 3.
What is a free enterprise?
Answer:
A business enterprise that accepts and discharges social obligations enjoys greater freedom. Social responsibilities are essential for avoiding governmental action against the business. The concerns which do not have the policy of following such rules are known as Free enterprises.

Samacheer Kalvi 11th Commerce Solutions Chapter 17 Social Responsibility of Business and Business Ethics

Question 4.
Who are called Stakeholders?
Answer:
A business organisation is a coalition of several interest groups are called stakeholders. Example – shareholders, customers, employees, suppliers, etc. Business should, therefore, work for the interest of all of them rather than for the benefit of shareholders /owners alone.

Question 5.
What is ethical Responsibility?
Answer:
The behaviour of the firm is expected by society but not codified in law. For example, respecting the religious sentiments and dignity of people while advertising for a product.

III. Short Answer Questions

Question 1.
Define the Concept of Social Responsibility?
Answer:
“Social Responsibility requires managers to consider whether their action is likely to promote the public good, to advance the basic beliefs of our society, to contribute to its stability, strength and harmony” – Peter F. Drucker.

Question 2.
Why you do think Social Responsibility of business is needed?
Answer:
Social Responsibility is needed for the following reasons:

  • Self – Interest
  • Law and order
  • Creation of Society
  • Moral Justification
  • Social power
  • Socio-cultural Norms
  • The image in the society
  • Professionalism
  • Public awareness
  • Trusteeship
  • Free enterprise

Samacheer Kalvi 11th Commerce Solutions Chapter 17 Social Responsibility of Business and Business Ethics

Question 3.
What are the benefits derived by employees of a Socially Responsible business enterprise?
Answer:

  1. Timely and regular payment of wages and salaries.
  2. Proper working conditions and welfare amenities.
  3. Opportunity for better career prospects.
  4. Job security as well as social security like facilities of provident fund, group insurance, pension, retirement benefits, etc.

Question 4.
Enumerate the points relating to why business units are Socially Responsible?
Answer:
The following are the main points to be considered while turning the business units into socially responsible one.

  • Protection of Stakeholders Interest
  • Legitimacy
  • Promotion of Society
  • Competence
  • Assessment of Social Impact
  • Professional conduct
  • Organized Social power
  • Public opinion

Question 5.
List the kinds of Social Responsibility.
Answer:

  1. Economic responsibility
  2. Legal responsibility
  3. Ethical responsibility
  4. Discretionary responsibility

IV. Long Answer Questions

Question 1.
Explain in detail the concept and need for Social Responsibility?
Answer:

Concept of Social Responsibility:
The term social responsibility is defined in various ways. Every businessman earns prosperity from business and should give back the benefit of this prosperity to society. This is voluntary. This benefit is the moral responsibility of business. As this benefit is supposed to be passed on to society, it can be said to be social responsibility of business.

Need for Social Responsibility:
Business is expected to be responsible to society due to the following reasons:

Self-Interest:
A business unit can sustain in the market for a longer period only by assuming some social obligations. For example, provision of higher wages and good working conditions motivates workers to work hard and produce more. Labour turnover and absenteeism are reduced.

Creation of Society:
Business is a creation of society and uses the resources of society. Therefore, it should fulfil its obligations to society. In the long run a successful business can be built on the foundations of a happy community and a satisfied work force.

Social Power:
Businessmen have considerable social power. Their decisions and actions affect the lives and fortunes of the society. They collectively determine for the nation such important matters as level of employment, rate of economic progress and distribution of income among various groups. It is, therefore, the moral and right thing for business enterprises to assume social obligations.

Organized Social Power:
Large corporations have acquired tremendous social power through their multifarious operations. Social power may be misused in the absence of social responsibility. There should be an equilibrium between social power and social responsibility.

Image in the Society:
A business can improve its image in public by assuming social obligations. Good relations with workers, consumers, and suppliers help in the success of the business. Social obligations improve the confidence and faith of people in a business enterprise.

Public Awareness:
Nowadays consumers and. workers are well informed about their rights. Consumers expect better quality products at reasonable prices. Similarly, workers desire fairness. wages. and other benefits. They exercise pressure on the employer’s through-trade unions. There will be industrial unrest and conflict in society if the business does not fulfill its obligations.

Samacheer Kalvi 11th Commerce Solutions Chapter 17 Social Responsibility of Business and Business Ethics

Question 2.
Answer:
Illustrate with examples the arguments for Social Responsibility?
Answer:

  1. Protection of Stakeholders Interest: A business organisation is a coalition of several interest groups or stakeholders. Example – shareholders, customers, employees, suppliers, etc.
  2. Promotion of Society: Business is a subsystem of society. It draws support and sustenance from society in the form of inputs. Socially responsible behaviour is essential to sustain this relationship between business and society.
  3. Assessment of Social Impact: During the course of its functioning, a business enterprise makes several decisions and actions. Its activities exercise a strong influence on the interests and values of society.
  4. Organised Social Power: Large corporations have acquired tremendous social power through their multifarious operations. Social power may be misused in the absence of social, responsibility.
  5. Legitimacy: It is in the enlightened self-interest of business to assume social responsibility.
  6. Competence: Business organisations and their managers have proved their competence and leadership in solving economic problems.
  7. Professional Conduct: Professional managers are required to display a keen social sensitivity and serve the society as a whole.
  8. Public Opinion: Adoption of social responsibility as an objective will help to improve the public opinion of business.

Question 3.
Discuss the different groups that benefited from the Social Responsibility of business?
Answer:
The business generally interacts with owners, investors, employees, suppliers, customers, competitors, government, and society. They are called interest groups because, by each and every activity of the business, the interest of these groups is affected directly or indirectly.

The groups on which the business is interested in given below:
Responsibility towards Owners:
Owners are the persons who own the business. They contribute capital and bear the business risks. The primary responsibilities of a business towards its owners are to

  • Run the business efficiently.
  • Proper utilization of capital and other resources.
  • Growth and appreciation of capital.
  • A regular and fair return on capital invested.

Responsibility towards Investors:
Investors are those who provide finance by way of investment in debentures, bonds, deposits etc. Banks, financial institutions, and investing public are all included in this category.
The responsibilities of a business towards its investors are:

  • Ensuring the safety of their investment.
  • Regular payment of interest.
  • Timely repayment of the principal amount.

Responsibility towards Employees:
Business needs employees or workers to work for it. These employees put their best effort for the benefit of the business. So it is the prime responsibility of every business to take care of the interest of their employees. If the employees are satisfied and efficient, then the only business can be successful. The responsibilities of business towards its employees include:

  • Timely and regular payment of wages and salaries.
  • Proper working conditions and welfare amenities.
  • Opportunity for better career prospects.
  • Job security as well as social security like facilities of provident fund, group insurance, pension, retirement benefits, etc.
  • Better living conditions like housing, transport, canteen, creches, etc.
  • Timely training and development.

Responsibility towards Suppliers:
Suppliers are businessmen who supply raw materials and other items required by manufacturers and traders. Certain suppliers, called distributors, supply finished products to the consumers. The responsibilities of business towards these suppliers are:

  • Giving regular orders for the purchase of goods
  • Dealing on fair terms and conditions.
  • Availing reasonable credit period.
  • Timely payment of dues.

Responsibility towards Customers:
No business can survive without the support -of customers. As a part of the responsibility of business towards them the business should provide the following facilities:

  • Products and services must be able to take care of the needs of the customers.
  • Products and services must be qualitative
  • There must be regularity in the supply of goods and services

Question 4.
How do you classify Social Responsibility?
Answer:
1. Economic responsibility:
A business enterprise is basically an economic entity and, therefore, its primary social responsibility is economic i.e., produce goods and services that society wants and sell them at a profit.

2. Legal responsibility:
Every business has a responsibility to operate within the laws of the land. Since these laws are meant for the good of society, a law-abiding enterprise is a socially responsible enterprise as well.

3. Ethical responsibility:
This includes the behavior of the firm that is expected by society but not codified in law. For example, respecting the religious sentiments and dignity of people while advertising for a product. There is an element of voluntary action in performing this responsibility.

4. Discretionary responsibility:
This refers to the purely voluntary obligation that an enterprise assumes, for instance, providing charitable contributions to educational institutions or helping the affected people during floods or earthquakes.

It is the responsibility of the company management to safeguard the capital investment by avoiding speculative activity and undertaking only healthy business ventures which give good returns on investment.

Samacheer Kalvi 11th Commerce Social Responsibility of Business and Business Ethics Additional Questions and Answers

I. Choose the Correct Answer:

Question 1.
Management of business enterprises is being
(a) Professionalism
(b) Law and order
(c) Free enterprise
(d) Public awareness
Answer:
(a) Professionalism

Samacheer Kalvi 11th Commerce Solutions Chapter 17 Social Responsibility of Business and Business Ethics

Question 2.
How many kinds of Social Relationship of business?
(a) Two
(b) Three
(c) Four
(d) Five
Answer:
(c) Four

II. Very Short Answer Questions

Question 1.
What is Legal responsibility?
Answer:
Every business has a responsibility to operate within the laws of the land. Since these laws are meant for the good of society, a law-abiding enterprise is a socially responsible enterprise as well.

Samacheer Kalvi 11th Commerce Solutions Chapter 17 Social Responsibility of Business and Business Ethics

Question 2.
What is Public awareness?
Answer:
Now – a – days consumers and workers are well informed about their rights. Consumers expect better quality products at reasonable prices. Similarly, workers desire fair wages and other benefits.

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