Q.1:- Build up arguments for and against social responsibilities.
Arguments for Social Responsibility
(i) Justification for Existence and Growth The mission of every business is to provide goods and services to satisfy human wants. Profit should be viewed as an outcome of services to the people. Thus, practice of social responsibility by business provides justifications for its existence and growth.
(ii) Long-term Interest of the Firm Social responsibility enhances the image and goodwill of the firm and results in maximum profits in the long run. If members of the society like workers, consumers, shareholders, and government officials are not convinced that the business enterprise is socially responsible, they will tend to withdraw their cooperation to the enterprise concerned.
(iii) Avoidance of Government Regulation Government regulations limit the freedom of business. It is believed that businessmen can avoid the problem of government regulations by voluntarily assuming social responsibilities, which helps to reduce the need for new laws.
(iv) Maintenance of Society Business enterprises should assume social responsibilities as the people who are dissatisfied with the business may resort to anti-social activities which may harm the interest of business itself.
(v) Availability of Resources with Business Business institutions can help society to tackle its problems better as they have valuable financial and human resources which can be effectively used for solving problems.
(vi) Converting Threats into Opportunities Business enterprises can solve the social problems and can reap gains from them by accepting the challenge of converting risky situations into profitable deals.
(vii) Better Environment for Doing Business Business may have little chance of success if it is to operate in a society full of diverse and complicated problems. Therefore, the business system should do something to solve the social problems to create a better environment conducive to its own survival.
(viii) Holding Business Responsible for Social Problems Some of the social problems like environmental pollution, unsafe workplaces, corruption in public institutions, and discriminatory practices in employment have either been perpetuated by business enterprises themselves. Therefore, it is the moral obligation of business to contribute in solving these problems.
Arguments Against Social Responsibility
(i) Violation of Profit Maximization Objective According to this argument, business exists only for profit maximization and social responsibility is against this objective. Social responsibility of business is fulfilled if it maximizes profits through increased efficiency and reduced costs.
(ii) Burden on Consumers It is argued that social responsibilities like pollution control and environmental protection involve huge costs which are likely to be shifted on to the consumers in the form of higher prices.
(iii) Lack of Social Skills According to this argument, social problems should be solved by specialized agencies as businessmen do not have the necessary understanding and training to solve social problems.
(iv) Lack of Broad Public Support According to this argument, the public in general does not like business involvement or interference in social programmes because of which business cannot operate successfully in solving social problems.