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…

Technological Economic

ORGANIZATION
Ethical

Social
Politico-Legal
Social Involvement of Business

 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

 Conflictingconsiderations
 Arbitrary Power
 Disregard of Market Mechanisms
 Responsibility of the Govt.
Social Involvement of Business

 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:

 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

 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.

 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

 By establishing appropriate company policy or a

“code of ethics”.

 By using a formally appointed ethics committee.

 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.

 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.