12th OCM Chapter 6 Exercise (Social Responsibilities of Business) Maharashtra Board – Free Resource

12th OCM Chapter 6 Exercise

12th OCM Chapter 6 Exercise
12th OCM Chapter 6 Exercise

Chapter 6 – Social Responsibilities of Business

Q.1 (A) Select the correct option and rewrite the sentences.

1. Business is a _____ activity
a) Socio-economic
b) Service
c) Charitable

2. Business organizations should try to make _____ utilization of natural resources.
a) Minimum
b) Maximum
c) Optimum

3. For economic growth and national security _____ stability is required.
a) Political
b) Social
c) Economic

4. Making timely payment of proper taxes is the responsibility of the organization towards _____.
a) Shareholders
b) Customers
c) Government

5. Businessmen are _____ of the society.
a) Representatives
b) leaders
c) Trustees

6. Business should provide periodic information to _____.
a) Customers
b) Owners
c) Employees

7. Business should offer adequate opportunities of promotion to their _____.
a) Employees
b) Customers
c) Investors

8. The term ‘Ethics’ is derived from the _____ word ‘Ethos’ which means character.
a) Latin
b) French
c) Greek

9. Business ethics refers to the _____ system of principles.
a) Economic
b) Social
c) Moral

10. Business organizations should protect health and provide safety measures to _____.
a) employees
b) owners
c) Investors

11. At least _____ % of the average net profit should be spent on C.S.R.
a) 5%
b) 2%
c) 3%. 

Q.1 (B) Match the pairs.

Group AGroup B
a) Employees1) Good quality product
b) Responsibility to Investors2) To maintain solvency and prestige
c) Responsibility toward government3) To serve society
d) Economic objective4) Voluntary
e) Business ethics5) Job security
6) Compulsory
7) Respecting rules and regulations
8) To earn profit
9) Branch of Social Science
10) Protection and environment

Answers.
a. 5) Job security
b. 2) To maintain solvency and prestige
c. 7) Respecting rules and regulations
d. 8) To earn profit
e. 9) Branch of Social Science

Q.1 (C) Give one word/phrase/term for the following statements.

1) Name the philosophy related to social responsibility propounded by Mahatma Gandhi.
Answer:
Trusteeship

2) Duties, obligations of business directed towards the welfare of society.
Answer:
Social Responsibility

3) Getting good quality products is the basic right of this group of society.
Answer:
Consumers

4) Providing fair returns on investment is the responsibility of organization towards this group.
Answer:
Investors

5) Rules of standard dealing with morality in a business environment.
Answer:
Business Ethics

6) An activity motivated by profit.
Answer:
Business

7) Earning foreign exchange is the responsibility of the organization towards this group.
Answer:
Government

8) Employment generation is the responsibility of the organization towards this group.
Answer:
Society

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Q.1 (D) State whether the following statements are true or false.

1) Businessmen are trustees of society. (True)

2) Business ethics is a code of conduct. (True)

3) Commercial organizations are expected to uplift the weaker section of society. (True)

4) It is the responsibility of commercial organizations to maintain industrial peace. (True)

5) Owners should not get complete and accurate information about their financial position. (False)

6) Media does not play important role in public life. (False)

7) Social responsibility is broader than legal responsibility of business. (True)

Q.1 (E) Find the odd one out.

1) Job security, health and safety measures, good working condition, reasonable profit.
2) Good quality products, fair prices, honest advertising, prevent congestion in cities.
3) Timely payment of taxes, earning foreign exchange, creating goodwill, political stability.
4) Protection of environment, maintain transparency, employment generation, development of backward region.
5) Proper conduct of meeting, careful use of capital, fair prices of products, maintain solvency and prestige.

Q.1 (F) Complete the sentences.

1) Business organizations can maximize profitability by minimizing wastage.

2) Social responsibility is broader than legal responsibility.

3) The concept of trusteeship was propounded by Mahatma Gandhi.

4) Business should earn a reasonable profit.

5) Remuneration should be fixed according to the nature and importance of work.

6) The word ‘Ethics’ is derived from the Greek word ‘ Ethos.

Q.1 (G) Select the correct option.

Group A Group B
1) After-sales serviceResponsibilities towards consumers
2) Timely payment of proper taxesResponsibilities towards government
3) Responsibilities toward societyProtest Anti-Social activities
4) Responsibilities toward shareholdersFair practices on stock Exchange

Q.1 (H) Answer in one sentence.

1) Who can raise voice against business malpractices?
Answer: Media can raise voice against business malpractices.

2) What should be done by management to keep workers updated?
Answer: ‘Introduction Training’, ‘Refresher Training’ is conducted to keep employees updated on the latest development.

3) What type of advertising should be avoided?
Answer: False, misleading, and vulgar advertisements should be avoided.

4) What organization should do to improve quality of goods and to reduce the cost of production?
Answer: Research and development should be conducted to improve quality of goods and to reduce cost of production.

Q.1(I) Correct the underlined word and rewrite the following sentences.

1) Social responsibility is narrower term than legal responsibility of business.
Answer: broader

2) All sorts of fair practices related to stock exchange should be avoided.
Answer: unfair

3) Management and union should agree strikes and lockouts to protect the interest of both parties.
Answer: ban

4) MRP (Maximum Retail Price) should not be printed on every packet.
Answer: Should

5) Dishonest advertising can be appreciated by customers in the long run.
Answer: Honest

6) Financial help should be provided by business organizations for anti-social activities.
Answer: Should not be

7) Business ethics is a compulsory term.
Answer: Voluntary

8) Business ethics is not a relative term.
Answer: relative

9) Social values are based on perceptions of right or wrong.
Answer: Moral

10) Moral values provide general guidelines for social conduct.
Answer: Social

Q.2 Explain the following terms/concepts.

1) Social responsibility
Answer: Social responsibility of business refers to its obligation to take those decisions and perform those actions which are desirable in terms of the objectives and values of our society. So, all the activities of business should be performed in such a manner that they will not harm any part of society rather they will protect and contribute to the interest of society.

2) Concept of Trusteeship
Answer: Trusteeship is a socioeconomic philosophy that was propounded by Mahatma Gandhi. It provides a means by which the wealthy people would be the trustees of trusts that looked after the welfare of the people in general. Businessmen are considered to be trustees of the society.

3) Business ethics
Answer: The word ‘Ethics’ is derived from the Greek word ‘Ethos’ which means character. Ethics means the set of rules and principles that the organization should follow while business ethics refers to a code of conduct that businesses are expected to follow while doing business. Through ethics, a standard is set for the organization to regulate their behavior. This helps them in distinguishing between the wrong and the right path of the business. 

4) Moral Values
Answer: Moral values are based on perceptions of right and wrong whereas social values may also include ideas about things being socially acceptable. Social values are often based on tradition, ego, honesty, integrity, fairness, hard work, cooperation, forgiveness, never hurt anyone, etc.

5) Social values
Answer: Social values form an important part of the culture of the society. They provide general guidelines for social conduct. Values such as fundamental rights, patriotism, respect for human dignity, rationality, sacrifice, equality, democracy, etc. influence our behavior in many ways.

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Q.3 Study the following case/situation and express your opinion.

1) Yashwant Co. Ltd. is providing facilities for their female staff like a daycare center for kids and work from home facility. Even management takes their suggestions while taking the decisions though they are members of a trade union

i) By doing this they are following social responsibilities towards which interest groups?
ii) What values are they presenting?
iii) What kind of responsibilities employer follows in the above case?

Solution:
i) By doing this they are following social responsibilities towards employees.
ii) They are representing social values.
iii) Yashwant Co.Ltd follows social responsibility towards employees.

2) An organization manufacturing paints has been enjoying a prominent market position since many years. It has been dumping its untreated poisonous waste on the river bank, which has created many health problems for the nearby villages.

i) Which responsibility is neglected by manufacturing organizations?
ii) What kind of pollution they are doing?
iii) State any one precautionary measure they need to take.

Solution:
1) Responsibility toward the protection of the environment is neglected by the paint manufacturing organization.
2) They are creating water pollution by dumping its untreated poisonous waste on the riverbank.
3) Proper waste management techniques should be used by which waste should be reduced or reused.

3) A vehicle manufacturing company has adopted the following practices. 
A) Only those components will be used by the company which is environment friendly.
B) There will be a discharge of harmful wastes only after their proper treatment.
C) Pollution level of every vehicle will be maintained as per international standards.

i) By doing this, the business organization follows social responsibility toward which interest group?
ii) What kind of pollution do they want to avoid?
iii) What kind of message do they want to convey?

Solution:
i) By doing this, business organization follows social responsibility toward society for the protection of the environment.
ii) They want to avoid air pollution.
iii) They want to convey the message that businesses should make an effort to protect the environment.

Q.4 Answer in brief.

1) Give any four types of social responsibilities towards consumers.

Answer:
Following are the social responsibilities towards consumers:

1) Good Quality Products

The organization should produce quality goods. Every organization should have its quality control department so inferior and substandard products can be rejected. International Standard Organization (ISO), is the latest trend toward quality control. This ensures customers about quality products.

2) Fair Prices

Consumers should not be cheated by charging high prices. It is not possible to fool the customer at all the time. Fair prices convert a one-time consumer into a permanent consumer. Maximum Retail Price (M.R.P.) inclusive of all taxes should be printed on every packet. Retailers should not charge any extra amount.

3) Customer’s Safety

The business must ensure that the product supplied will not adversely affect the life and health of the customers. Unsafe products should not be marketed. Consumers should be warned of any unsafe goods.

4) Honest Advertising

Consumers want to know the facts, features, advantages, side-effects, etc. of the products. The advertisement conveys this information. So the organization must be sure that the advertisement is not misleading. False, misleading, and vulgar advertisements should be avoided. Consumers will appreciate only honest advertisements in the long run.

5) After Sales Service

The organization is expected to provide after-sales service for maintenance of goods during the period of warranty. Efficient and effective after-sale service helps to establish a good relation between the consumers and the organization.

2) What is business ethics? What are features of business ethics?

Answer:
Business Ethics:
The word ‘Ethics’ is derived from the Greek word ‘Ethos’ which means character. Ethics means the set of rules and principles that the organization should follow while business ethics refers to a code of conduct that businesses are expected to follow while doing business. 

Through ethics, a standard is set for the organization to regulate their behavior. This helps them in distinguishing between the wrong and the right path of the business. 

Features of Business Ethics:

1) Code of conduct

Business ethics is a code of conduct. It tells what to do and what not to for the welfare of society. All businessmen must follow this code of conduct.

2) Based on moral and social values

It contains moral and social principles (rules) for doing business. This includes self-control, consumer protection, and welfare, service to society, fair treatment to social groups, not to exploit others, etc.

3) Gives protection to social groups

Business ethics give protection to different social groups such as consumers, employees, small businessmen, government, shareholders, creditors, etc.

4) Provides a basic framework

It gives the social, cultural, economic, legal, and other limits of business. Business must be conducted within these limits.

5) Voluntary

The businessmen must accept business ethics on their own. Business ethics must be like self-discipline. It must not be enforced by law.

6) Requires education and guidance

Businessmen must be given proper education and guidance before introducing business ethics. The businessman must be motivated to implement business ethics.

7) Relative term

Business ethics change from business to business. It also changes from one country to another. What is considered as good in one country may be banned in another country.

8) New concept

Business ethics is a newer concept. It is strictly followed only in developed countries and not in poor and developing countries.

3) State responsibilities of business towards government.

Answer:
Following are the responsibilities of the organization towards government.

1) Timely Payment of Taxes

The government imposes various types of taxes like sales tax, income tax, wealth tax, etc. Business units should pay these taxes from time to time. It would be difficult for the government to undertake development projects without the availability of funds.

2) Observing rules and regulations

The rules framed by the government for business should be fully complied with. The business should follow the laws regarding obtaining a license for a specified business, the operation of the business, price determination and production, etc. They should conduct business in a lawful manner.

3) Earning Foreign Exchange

The government also expects from business organizations that it will earn foreign exchange by exporting goods. The government requires this foreign exchange for importing various goods. valuable and important products.

4) Economic Development

The government sets the targets for balanced and rapid economic development of the country. The business organization should provide necessary cooperation to the government.

5) Implementing Socio-Economic Policies

The government expects cooperation and help from the business sector in implementing socio-economic programmes and policies.

6) Suggestions to the Government

The business organization can provide suggestions to the government before framing important policies such as Industrial Policy, Import Export Policy, Licensing Policy etc. Such suggestions are helpful for framing organization-friendly policies.

7) No favours

The commercial organization should not take any favour from the government officials by bribing or influencing them.

8) Contributing to Government Treasury

The Commercial organization must contribute the funds to government during the emergencies and natural calamities like floods, earthquakes, etc.

4) State any four CSR activities.

Answer:
CSR activities are briefly described below:

i) Eradicating hunger, poverty & malnutrition, promoting preventive health care & sanitation & making available safe drinking water.

ii) Promoting education, including special education & employment enhancing vocation skills, especially among children, women, elderly & the differently abled & livelihood enhancement projects.

iii) Reducing child mortality and improving maternal health by providing good hospital facilities and low-cost medicines.

iv) Ensuring environmental sustainability, ecological balance, protection of flora & fauna, animal welfare, agroforestry, conservation of natural resources & maintaining the quality of soil, air & water.

v) Employment enhancing vocational skills.

vi) Measures for the benefit of armed forces veterans, war widows & their dependents.

vii) Training to promote rural sports, and nationally recognized sports.

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Q.5 Justify the following statements.

1) Role of media has major influence on business organisations.

Answer:
a) Traditionally trading by the buyers and sellers is done through three channels like face to face, mail, and phone.
b) The internet has become the fourth channel for trade. E-Business is booming and allowing businesses to sell more and at a lower cost.
c) In E-business investment requirement is low as compared to traditional business as the store does not have physical existence.
d) The formation of a traditional business is difficult, whereas forming an e-business is relatively easy to start.
Hence, it is easy to set up an e-business as compared to a traditional business.

2) Business should allow workers participation in management.

Answer:
a) Communication is the art of exchanging ideas, facts, information, etc. from one person or entity to another.
b) The process of passing any information from one person to another with the help of some medium is termed as communication.
c) Communication is very simple process where message is being transferred from a sender to the receiver.
d) Communication is essential for coordination and coordination helps in the growth of the business.
e) It also improves managerial efficiency that induces the employees in an organization to develop a spirit of cooperation.
Thus, communication is essential for growth of business.

3) Expectations of society towards business are changing.

Answer:
a) As per the principle of subrogation, after the insured is compensated for the loss due to damage of the property insured, then the right of ownership of such property passes on to the insurer.
b) This principle is applicable only when the damaged property has any value after the event causing the damage.

c) Indemnity means a guarantee or assurance to put the insured in the same financial position in which he was prior to the happening of the uncertain incident.
d) Principle of indemnity is applicable to fire, marine, and general insurance. It is not applicable to life insurance as loss of life can never be measured in monetary terms.
Thus, the principle of subrogation is applicable to all contracts of indemnity.

e) Hence, the accountholder can withdraw cash at any time.

4) Business organizations should avoid environmental pollution and ecological imbalance.

Answer:
a) As per the principle of subrogation, after the insured is compensated for the loss due to damage of the property insured, then the right of ownership of such property passes on to the insurer.
b) This principle is applicable only when the damaged property has any value after the event causing the damage.

c) Indemnity means a guarantee or assurance to put the insured in the same financial position in which he was prior to the happening of the uncertain incident.
d) Principle of indemnity is applicable to fire, marine, and general insurance. It is not applicable to life insurance as loss of life can never be measured in monetary terms.
Thus, the principle of subrogation is applicable to all contracts of indemnity.

e) Hence, the accountholder can withdraw cash any time.

5) All sorts of unfair practices related to stock exchange should be avoided.

Answer:
a) As per the principle of subrogation, after the insured is compensated for the loss due to damage of the property insured, then the right of ownership of such property passes on to the insurer.
b) This principle is applicable only when the damaged property has any value after the event causing the damage.

c) Indemnity means a guarantee or assurance to put the insured in the same financial position in which he was prior to the happening of the uncertain incident.
d) Principle of indemnity is applicable to fire, marine and general insurance. It is not applicable to life insurance as loss of life can never be measured in monetary terms.
Thus, principle of subrogation is applicable to all contracts of indemnity.

e. Hence, the accountholder can withdraw cash any time.

6) Business ethics contains moral and social values for doing business.

Answer:
a) As per the principle of subrogation, after the insured is compensated for the loss due to damage of the property insured, then the right of ownership of such property passes on to the insurer.
b) This principle is applicable only when the damaged property has any value after the event causing the damage.

c) Indemnity means a guarantee or assurance to put the insured in the same financial position in which he was prior to the happening of the uncertain incident.
d) Principle of indemnity is applicable to fire, marine and general insurance. It is not applicable to life insurance as loss of life can never be measured in monetary terms.
Thus, principle of subrogation is applicable to all contracts of indemnity.

e. Hence, the accountholder can withdraw cash any time.

7) Business ethics can be considered as a tool for social development.

Answer:
a) As per the principle of subrogation, after the insured is compensated for the loss due to damage of the property insured, then the right of ownership of such property passes on to the insurer.
b) This principle is applicable only when the damaged property has any value after the event causing the damage.

c) Indemnity means a guarantee or assurance to put the insured in the same financial position in which he was prior to the happening of the uncertain incident.
d) Principle of indemnity is applicable to fire, marine and general insurance. It is not applicable to life insurance as loss of life can never be measured in monetary terms.
Thus, principle of subrogation is applicable to all contracts of indemnity.

e) Hence, the accountholder can withdraw cash at any time.

Q.6 Attempt the following.

1) What is social responsibility of commercial organizations towards consumers?

Answer:
Following are the social responsibility of commercial organizations toward consumers:

1) Good Quality Products

The organization should produce quality goods. Every organization should have its quality control department so inferior and substandard products can be rejected. International Standard Organization (ISO), is the latest trend toward quality control. This ensures customers about quality products.

2) Fair Prices

Consumers should not be cheated by charging high prices. Fair prices convert a one-time consumer into a permanent consumer. Maximum Retail Price (M.R.P.) inclusive of all taxes should be printed on every packet. Retailer should not charge any extra amount.

3) Customer’s Safety

The business must ensure that the product supplied will not adversely affect the life and health of the customers. Unsafe products should not be marketed. Consumers should be warned of any unsafe goods.

4) Honest Advertising

Consumers want to know the facts, features, advantages, side-effects, etc. of the products. So the organization must be sure that the advertisement is not misleading. A false, misleading, and vulgar advertisement should be avoided. Consumers will appreciate only honest advertisements in the long run.

5) After Sales Service

The organization is expected to provide after-sales service for maintenance of goods during the period of warranty. Efficient and effective after-sale service helps to establish a good relation between the consumers and the organization.

6) Research and Development

Organizations should conduct research and development to improve the quality of goods and to reduce the cost of production. This will minimize the final prices charged to consumers. It must provide quality standards such as BIS or AGMARK on respective products.

7) Regular Supply

Consumers should be supplied with the goods regularly as and when required by them. The commercial organization should not create an artificial shortage of goods by hoarding and black marketing.

8) Attend Complaints

The consumer complaints must be attended immediately. A quick and effective grievances redressal system should be implemented. Suggestions of customers should be welcomed.

9) Training

The business organization should arrange training for their consumers either free or by charging reasonable fees.

10) Avoid Customer Exploitation

Businesses should avoid unfair trade practices which lead to the exploitation of consumers. Also, they should avoid monopolistic competition in the interest of consumers.

Note: Write any 6-7 points for 5 marks question.

2) State different types of responsibilities towards society.

Answer:
A business organization has certain responsibilities towards society at large they are as under:

1) Protection of the environment

Pollution is the major problem of present times. Air pollution and water pollution are due to industries, chemical plants, cement plants, etc. The business organization should take all possible measures to minimize pollution.

2) Better and Maximum Use of Resources

The business organization should make proper and optimum use of scarce resources. The resources like fuel, water, land, etc. must be used efficiently.

3) Reservation for Weaker Section

The organization is expected to reserve certain positions in their establishment for economically weaker sections of the society to lift up the economically weaker section of the society. These people expect financial and other help from the business unit; which will be provided from time to time.

4) Development of Backward Regions

Society requires that the business organization should be started in backward areas. This will create employment opportunities and increase purchasing power among rural people. Thereby, helping backward regions to develop.

5) Protest against Anti-Social Activities

Business organizations should not participate in anti-social activities. It will adversely affect society. No financial help should be provided for that. Smuggling, association with underworld people, and bribing government people should be avoided.

6) Financial Assistance:

Society expects donations and financial assistance for various social causes such as the eradication of poverty, illiteracy, etc. They expect business organizations to provide financial assistance to various awareness programs such as in anti-drug campaigns, antinoise pollution campaigns, etc.

7) Prevent Congestion

The business should avoid congestion of industries in cities by spreading industries in different places or locations. Industries should be preferably located in industrial zones only. It will avoid adverse effect on residential areas.

8) Employment Generation

Businesses should provide large employment opportunities for all sections of society. It can be done through expansion and diversification programmes. Such effort will help to solve the problem of unemployment, and poverty in society.

Note: Write any 6-7 points for 5 marks question.

3) Describe the responsibilities of the commercial organizations towards investors.

Answer:
Investors provide finance to the company. They are creditors of the business. Businesses should fulfill the following responsibilities towards the investors. 

1) Proper Conduct of Meetings

The company should call meetings of investors and provide information about the business. Proper notices of meetings should be sent to them. In a period of crisis, investors should be taken into confidence. Factors responsible for failure should be known to the investor.

2) Return on Investment

Investors invest their money in business and accept risk factors. They should get fair returns on investment regularly in the form of interest. The following points should be considered
a. Fair returns on investment
b. Safety of investment.
c. Steady appreciation of business.

3) Handling Grievances

A company should handle investors’ grievances if any. There should be an effective methodology for this. All queries regarding any other issue must be answered in a satisfactory way.

4) Maintain Transparency

Investors provide long-term capital as well as working capital to run the business efficiently. So it should maintain a high degree of transparency in its operation.

5) Proper Disclosure of Information

Management should present full and factual information to investors. They should get regular reports, circulars, and statements of profit. The financial performance of the company must be provided correctly so that prospective investors can take right decisions to invest in future. All this will ensure them that their investment is safe.

6) Maintain Solvency and Prestige

Businesses should maintain a sound financial position, solvency, prestige, and goodwill to satisfy investors. Businesses should take continuous efforts for research, innovation, and expansion programme.

4) Describe the features of business ethics.

Answer:
Refer to question number 4 (2).

5) What is corporate social responsibility?

Answer:
Meaning: Corporate Social Responsibility (CSR) is a self-regulating business model, that aims to contribute to societal goals or support volunteering or ethically-oriented practices. It makes a company socially responsible and accountable.

This accountability is towards itself, its stakeholders, public in general, etc. By practicing social responsibility, companies can be conscious about the economic, social, and environmental aspects of society.

According to UNIDO (United Nations Industrial Development Organization), “Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders”.

Applicability of CSR:

1) The companies having a Net worth of 500 Cr. or more or a Turnover of 1000 Cr. or more; or Net Profit of 5 Cr. or more during any financial year shall be required to constitute a Corporate Social Responsibility Committee of the Board with effect from 1st April 2014.

2) The Board’s report shall disclose the compositions of the CSR Committee.

3) All companies shall spend, in every financial year, at least 2% of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy.

4) The companies shall be required to incorporate in its Board’s report an annual report on CSR.

CSR activities are briefly described below:

i) Eradicating hunger, poverty & malnutrition, promoting preventive health care & sanitation & making available safe drinking water.

ii) Promoting education, including special education & employment enhancing vocation skills, especially among children, women, elderly & the differently abled & livelihood enhancement projects.

iii) Reducing child mortality and improving maternal health by providing good hospital facilities and low-cost medicines.

iv) Ensuring environmental sustainability, ecological balance, protection of flora & fauna, animal welfare, agroforestry, conservation of natural resources & maintaining the quality of soil, air & water.

v) Employment enhancing vocational skills.

vi) Measures for the benefit of armed forces veterans, war widows & their dependents.

vii) Training to promote rural sports, and nationally recognized sports.

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Q.7 Answer the following.

1) Explain the responsibilities of business towards employees.

Answer:
Employees are human resources to the organization. They must be treated with dignity and respect. The management and employees should develop mutual understanding and trust. The government has passed various labour laws to safeguard the interest of employees.

The business has the following responsibility toward employees

1) Job security

Security of job provides mental peace and employees can work with full dedication and concentration. Commitment with the work will raise their morale and loyalty towards the organization.

2) Fair Remuneration

The business should pay attractive salaries to all their employees. Other incentives like bonuses, overtime allowance, etc. should be given to them. Remuneration should be fixed according to the nature of work. Suitable wage plans providing increments and revision of wages are also essential.

3) Health and Safety Measures

Businesses should protect the health and hygiene of employees. Canteen facilities, medical facilities, and proper sanitation must be provided to the workers. Proper maintenance of machines and premises must be done to prevent accidents and to control pollution. Safety equipment like hand gloves, safety shoes, helmets, goggles, masks, etc. should be provided to concerned employees.

4) Good Working Condition

The employees should be provided with good working conditions such as adequate lighting, ventilation, drinking water, etc. Necessary steps should be taken to avoid air, water, and sound pollution. There should be proper working hours with lunch breaks and rest pauses etc.

5) Recognition of Trade Unions

It is the responsibility of the business organizations to maintain industrial peace. The employer must recognize the workers’ right to join a trade union. An employer should not restrict employees from forming a trade union. ‘Divide and Rule’ policy should not be followed. Management should sort out various problems of workers by holding talks or negotiations with such unions.

6) Education and Training

The organization should make every possible attempt to educate employees. Guidance and methods of training depend on the nature of the job. ‘Introduction Training’, and ‘Refresher Training’ is conducted to keep employees updated on the latest development. Training makes employees confident and also it increases their efficiency.

7) Workers’ Participation in Management

The workers must be encouraged to take part in management by forming a workers committee. Suggestion schemes, and profit sharing can be encouraged by management. It will raise their morale and give them a sense of belonging.

8) Promotion and Career Opportunities

Businesses should offer adequate opportunities of promotion to their talented employees. They should give proper information about the qualifications, skills, and experience required to obtain a promotion. It will increase awareness among employees and they will also be motivated to take efforts.

9) Proper Grievance Procedure

There should be a proper grievance procedure to handle employees’ complaints. All queries should be sorted quickly. The employees must feel satisfied. Investigations and necessary actions should be taken to settle their grievances.

10) Miscellaneous

a. Fair treatment to all employees.
b. To recognize, appreciate and encourage the special skills of employees.
c. To introduce a code of conduct.
d. To provide opportunities for meaningful work and to recognize goals.
e. To protect the religious, social, and political rights of employees.
f. Allowing the formation of informal groups.

2) Define the concept of social responsibility and what is the need for social responsibility.

Answer:
The social responsibility of a business refers to its obligation to take those decisions and perform those actions which are desirable in terms of the objectives and values of our society. So, all the activities of the business should be performed in such a manner that they will not harm any part of society rather they will protect and contribute to the interest of society.

Keith Davis – ‘Social responsibility of business refers to the obligations of business man’s decisions and actions beyond the firm’s direct economic and technical interest.’

Need for Social responsibility

1) Concept of Trusteeship

Trusteeship is a socioeconomic philosophy that was propounded by Mahatma Gandhi. It provides a means by which the wealthy people would be the trustees of trusts that looked after the welfare of the people in general. Businessmen are considered to be trustees of the society.

2) Changing expectations of society

Society’s expectations from business firms have undergone a drastic change over the years. In the early days, businesses were viewed only as a provider of goods and services. But today society expects businesses to be responsible citizens and contribute towards social welfare.

3) Reputation

Businesses spend a huge amount of resources on brand building and strengthening their image. A socially responsible company enjoys a good reputation in society. It results in increased sales, profitability, the attraction of talent, and sustained growth.

4) Protection of the Environment

The business organization should make proper use of the country’s natural resources. They should avoid environmental degradation such as contamination of water resources, depletion of the ozone layer, etc. which have been caused by businesses. These have resulted in poor health of the community and placed a question mark on the survival of the human species.

5) Optimum Utilisation of Resources

Modern businesses have huge amount of resources at their disposal. With such large resources, businesses are in a better position to protect society’s interests. Wastage of resources should be avoided.

6) Pressure of trade Union

Nowadays, workers have become conscious of their rights. Trade unions are growing fast and play important role in a business environment. Workers expect management to provide fair wages, bonuses, etc. to avoid conflicts between trade unions and management. To avoid conflicts, businesses should understand the responsibility and act accordingly.

7) Growth of Consumer Movement

The development of education and mass media and increasing competition in the market have made the consumers conscious of their rights and powers in determining market forces. So, business enterprises have to follow consumer-oriented policies.

8) Government Control

From the point of view of a business, government regulations are undesirable because they limit freedom. The government has enacted various laws. This has put moral as well as the legal pressure on businesses.

9) Long-term self interest

A firm and its image stand to gain maximum profits in the long run when it has its highest goal as ‘service to society when an increasing number of members, of society- including workers, consumers, shareholders, and government officials, feel that business enterprise is not serving their interest, they will tend to withdraw their cooperation to the enterprise concerned so in their own self-interest, a firm fulfills its social responsibility.

10) Complexities of Social Problems

Some of the social problems have been created by business firms themselves such as pollution, unsafe workplaces, discrimination, etc. It is the moral obligation of businesses to solve such social problems.

11) Globalisation

The entire globe is the marketplace nowadays. lt provides more opportunities and challenges to business. International trade barriers have reduced and resulted in the global distribution of goods and services. Countries that have adopted good practices are influencing the world.

12) Role of Media

Media plays important role in public life. Due to the internet, it is easier to reach a common man. The media is very vibrant and active. It can influence the masses in society. The media can raise voices against business malpractices and the exploitation of consumers. Businesses should not ignore social values.

Note: Write 8 to 10 points with an explanation when the question is asked for 8 marks.

3) Explain the responsibilities of a business unit towards society at a large.

Answer:
Responsibilities towards Community /Society/ Public at large:

A business organization has certain responsibilities towards society at large they are as under:

1) Protection of the environment

Pollution is the major problem of present times. Air pollution and water pollution are due to industries, chemical plants, cement plants, etc. The business organization should take all possible measures to minimize pollution.

2) Better and Maximum Use of Resources

The business organization should make proper and optimum use of scarce resources. The resources like fuel, water, land, etc. must be used efficiently.

3) Reservation for Weaker Section

The organization is expected to reserve certain positions in their establishment for economically weaker sections of the society to lift up the economically weaker section of the society. These people expect financial and other help from the business unit; which will be provided from time to time.

4) Development of Backward Regions

Society requires that the business organization should be started in backward areas. This will create employment opportunities and increase purchasing power among rural people. Thereby, helping backward regions to develop.

5) Protest against Anti-Social Activities

The business organization should not participate in anti-social activities. It will adversely affect society. No financial help should be provided for that. Smuggling, association with underworld people, and bribing government people should be avoided.

6) Financial Assistance

Society expects donations and financial assistance for various social causes such as eradication of poverty, illiteracy, etc. They expect the business organizations to provide financial assistance to various awareness programs such as anti-drug campaigns, anti-noise pollution campaigns, etc.

7) Prevent Congestion

The business should avoid congestion of industries in cities by spreading industries in different places or locations. Industries should be preferably located in industrial zones only. It will avoid adverse effects on residential areas.

8) Employment Generation

Businesses should provide large employment opportunities for all sections of society. It can be done through expansion and diversification programmes. Such effort will help to solve the problem of unemployment, and poverty in society.

4) What are the responsibilities of business towards investors and government?

Answer:
Responsibilities of business Towards Investors

Investors provide finance to the company. They are creditors of the business. Businesses should fulfill the following responsibilities towards the investors. 

1) Proper Conduct of Meetings

The company should call meetings of investors and provide information about the business. Proper notices of meetings should be sent to them. In a period of crisis, investors should be taken into confidence. Factors responsible for failure should be known to the investor.

2) Return on Investment

Investors invest their money in business and accept risk factors. They should get fair returns on investment regularly in the form of interest. The following points should be considered
a. Fair returns on investment
b. Safety of investment.
c. Steady appreciation of business.

3) Handling Grievances

A company should handle investors’ grievances if any. There should be an effective methodology for this. All queries regarding any other issue must be answered in a satisfactory way.

4) Maintain Transparency

Investors provide long-term capital as well as working capital to run the business efficiently. So it should maintain a high degree of transparency in its operation.

5) Proper Disclosure of Information

Management should present full and factual information to investors. They should get regular reports, circulars, and statements of profit. The financial performance of the company must be provided correctly so that prospective investors can take the right decisions to invest in the future. All this will ensure them that their investment is safe.

6) Maintain Solvency and Prestige

Businesses should maintain a sound financial position, solvency, prestige, and goodwill to satisfy investors. Businesses should take continuous efforts for research, innovation, and expansion programmes.

Responsibilities Towards Government:
The government regulates and controls business with the objectives of systematic economic development of the country and safeguarding the interests of the common man. The government provides incentives and subsidies to businesses. Following are the responsibilities of the organization towards the government.

1) Timely Payment of Taxes

The government imposes various types of taxes like sales tax, income tax, wealth tax, etc. Business units should pay these taxes from time to time. It would be difficult for the government to undertake development projects without the availability of funds.

2) Observing rules and regulations

The rules framed by the government for business should be fully complied with. The business should follow the laws regarding obtaining a license for a specified business, the operation of the business, price determination and production, etc. They should conduct business in a lawful manner.

3) Earning Foreign Exchange

The government also expects from business organizations that it will earn foreign exchange by exporting goods. The government requires this foreign exchange for importing various goods. valuable and important products.

4) Economic Development

The government sets the targets for the balanced and rapid economic development of the country. The business organization should provide necessary cooperation to the government.

5) Implementing Socio-Economic Policies

The government expects cooperation and help from the business sector in implementing socio-economic programmes and policies.

6) Suggestions to the Government

The business organization can provide suggestions to the government before framing important policies such as Industrial Policy, Import Export Policy, Licensing Policy etc. Such suggestions are helpful for framing organization-friendly policies.

7) No favours

The commercial organization should not take any favour from the government officials by bribing or influencing them.

8) Contributing to Government Treasury

The Commercial organization must contribute the funds to government during the emergencies and natural calamities like floods, earthquakes, etc.

Note: Write 5-5 points from each section with an explanation when the question is asked for 8 marks.

12th Commerce OCM Textbook Solutions

Chapter Name Solution Link
1) Principles of ManagementClick Here
2) Functions of ManagementClick Here
3) Entrepreneurship DevelopmentClick Here
4) Business ServicesClick Here
5) Emerging Modes of BusinessClick Here
6) Social Responsibilities of BusinessClick Here
7) Consumer ProtectionClick Here
8) MarketingClick Here

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