The Social Responsibility of Managers

Acharya Institute of Management & Sciences

EMPOWERING MINDS

Department of Management Studies (MBA)  The Social Responsibility of Managers By Indranil Mutsuddi

Hey Look at me….will u b a manager like me??

Social responsibility of managers…

 Corporate

Social Responsibility:

Corporate social responsibility is involved with the impact of the company’s actions on the society.  Social

Responsiveness:

Social responsiveness means the ability of a corporation to relate its operations & policies to the social environment in ways that are mutually beneficial to the company and to the society.

Social responsibility of managers… Key Issues:  

Impact of Social Responsibility on Profits Are Social Obligations in Conflict with profit Objectives

Management & the Society…

Economic

Technological

ORGANIZATION Ethical

Social

Politico-Legal

Social Involvement of Business

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Business have had received its charter from the society & consequently has to respond to the needs of the society. Society gains through employment opportunities, better economy; whereas business benefits from a better community ( community is the source of workforce & the consumer of its products & services) Modern society is an interdependent system, & the internal activities of the enterprise have an impact on the external environment.

Arguments for assuming Social Responsibilities

 Use

of Society’s Resources  Long-term Business Interest  Moral justification  Better public Image  Conscious Customers

Arguments against assuming Social Responsibilities  Conflicting

considerations  Arbitrary Power  Disregard of Market Mechanisms  Responsibility of the Govt.

Social Involvement of Business

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Social involvement may be involved with the interest of the stockholders. Social involvement creates a favorable public image. Social involvement discourages additional government regulations and interventions. The result is greater freedom and more flexibility in decision making for the business.

Social Audit: What is it??? Social Audit can be defined as a commitment to the systematic assessment of and reporting on some meaningful, definable domain of the organization’s activities that have social impact.

Types of Social Audits: • One is required by the Government & involves, for example, pollution control, product performance requirements, and equal employment Standards. • The other kind of social audit concerns a great variety of voluntary social programs.

Obligations of Managers…. Responsibility towards Shareholders:    

Reasonable Dividend Stability & Growth Information Protection of Assets

Obligations of Managers…. Responsibility towards Customers:     

Need satisfaction Regular Flow of Goods Prompt Services Right Information Fair Trade practices

Obligations of Managers… Responsibility towards Employees (internal Customers)       

Fair wages Healthy & conducive working conditions Adequate service benefits Cooperation Recognition & Rewards Recognition of Workers’ Rights Opportunity for Growth & Development

Responsibility of Managers… Responsibility towards the Govt:    

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To abide by the laws of the nation To pay Govt taxes honestly & in time To avoid corrupting Govt employees To discourage the tendency of concentration of economic power and monopoly To encourage fair trade practices.

Responsibility of Managers… Responsibility towards the Society/Community:       

Socio-economic Objectives Improvement of the Local Environment Environmental Concerns Creating Employment opportunities Efficient use of Resources Welfare Activities Business Morality

Ethics in effective managing

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Ethics can be defined as the discipline dealing with what is good & bad and with rules by which an individual lives his or her personal life.

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Business Ethics is concerned with truth and justice and has a variety of aspects such as expectations of the society, fair competition, advertising, public relations, social responsibilities, consumer autonomy, and corporate behavior in the home country as well as abroad.

3 ways of institutionalizing Ethics

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By establishing appropriate company policy or a “code of ethics”.

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By using a formally appointed ethics committee.

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By teaching & training ethics in management development programs.

Code of Ethics 

Code of ethics refers to a statement of principles, or rules that guide ethical behavior in an organization.

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Code of ethics do not only apply to business organizations; they should guide the behavior of persons in all organizations and in everyday life.

Importance of implementing ethics through Formal Committees

Functions of an ethics committee may include:        

Holding regular meetings to discuss ethical issues. Dealing with “Grey Areas” Communicating the code of ethics to all members of the organization Checking for possible violations of the code of ethics. Enforcing the code of ethics. Rewarding compliance & punishing violations. Reviewing and updating the code of ethics. Reporting activities of the ethics committee to the board of directors of the organization.