Build up arguments for and against social responsibilities.
Answers
Justification for existence and growth : Business exists for providing goods and services to satisfy human needs. Although profit motive is an important justification for undertaking business activity, it should be looked upon as an outcome of service to the people.
Long-term interest of the firm: A firm and its image stand to gain maximum profits in the long run when it has its highest goals as ‘service to society’.
Avoidance of government regulations : It is believed that businessmen can avoid the problem :
of government regulations by voluntarily assuming social responsibility, which helps to reduce the need for new laws.
Argument against social responsibility: 1. Violation of profit maximisation objective :
According to this argument, business exists only for profit maximisation. Therefore, any talk of social responsibility is against this objective. In fact, business fulfils its social responsibility if it maximises profits through increased efficiency and reduced costs.
Burden on consumers : It is argued that social responsibility like pollution control and environment protection are very costly and often require huge financial investments. In such circumstances, businessmen are likely to simply shift this burden of social responsibility by charging higher prices from the consumers instead of bearing it themselves.
Lack of social skills : All social problems cannot be solved in the way business problems are solved. In fact, businessmen do not have the necessary understanding and training to solve social problems.
Answer:
Arguments for assuming social responsibility :
(1) Democratic attitude of the government :
After a social and political revolutions the country has adopted planned development democratic economy, so it necessary to integrate, direct and control the activities of the business towards social welfare.
(2) Consumers interest :
In earlier days consumers dependent on the mercy of the business houses but the modern consumers have realised that business should not rule over them but render services to them.
(3) Political views :
If there is a democracy in the country workers being the viral and active factor of the business must be accorded participation in the management. They must be consulted in taking important decisions.
(4) Foreign Influence :
The business community of Japan England Germany airport National and moral character. They do not indulge in the bad practices of adulteration, imitation and duplication. Our business houses should take lessons from these foreign institutions and carry out their business in the best interest of the various classes of the society.
(5) Stress on business ethics :
There has been a revolution in the views and thinking of individuals. There are seminars, meetings and discussions and everywhere it is stressed that a business should assume social responsibility.
Arguments against assuming social responsibility :
(1) Consumers interest :
The business owes its obligation to its customers to supply standard quality of goods at reasonable price. If the business assumes its social responsibilities towards different classes , the cost of production and the price of the commodity will increase, which will be against the interest of customers.
(2) Ethics and profit motive are the two different things :
The sole aim of the business is to earn more and more profit. If it becomes moral entity, it sole aim will be adversely affected.
(3) Social welfare is the responsibility of the government :
It is the responsibility of the Government to adopt various schemes and measures for the uplift the weaker sections of the society . Business has no relationship with the welfare schemes.
(4) Danger of dictatorship :
If the business is allowed to build a society at its sweet will , the business will be the dictator and architect of its own fortune. Such state of affairs will also be fatal to the interest of the society and common masses.
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