Prof. UthamMurali. M.

S;
M.B.A.
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• Being Socially
Responsible means
that people and
organizations must
behave ethically and
with sensitivity
toward social,
cultural, economic
and environmental
issues.

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• Social responsibility is a duty of every individual has to
perform so as to maintain a balance between the economy
and the ecosystems.
• Striving for social responsibility helps individuals,
organizations and governments have a positive impact on
development, business and society with a positive
contribution to bottom-line results.
• It pertains not only to business organizations but also to
everyone whose any action impacts the environment.
• This responsibility can be p a s s iv e , by avoiding engaging in
socially harmful acts, or a c tiv e , by performing activities that
directly advance social goals. 5
• Social responsibilities
includes 4 dimension :
- Legal
- Ethical
- Economic
- Philanthropic
(discretionary)

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• Refers to obeying
governmental laws and
regulations
• civil law:
- rights & duties of individuals

& org.
• criminal law:
- prohibits specific actions &
imposes fines / imprisonment
as punishment for breaking
the law
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• Behaviors and activities that
are expected or prohibited by
organizational members, the
community, and society (not
codified into law)

• Standards, norms, or
expectations that reflect the
concern of major stakeholders.

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• How resources for the
production of goods and
services are distributed
within the social system.

• Consumers always favor

socially responsible
companies or they most
enamored with companies
that maximize profits.

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• Business’s contributions to

society

• Strategic philanthropy

- Charitable trusts

- Microsoft companies

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The Pyramid of Social Responsibility
DISCRETIONARY
Responsibilities
Be a good Corporate Citizen.
Contribute resources to the
community; improve quality of life.

ETHICAL
Responsibilities
Be ethical.
Obligation to do what is right,
just and fair; Avoid harm.

LEGAL
Responsibilities
Obey the Law
Law is society’s codification of right and wrong;
Play by the rules

ECONOMIC
Responsibilities
Be Profitable
The foundation upon which all others rest
Carroll’s Model
• Student social responsibility, known as SSR, is the
responsibility of every student for his or her actions.
• It is morally binding everyone to act in such a way that the
people around them are not adversely affected.
• SSR is based on an individual's ethics.
• It may be impractical, especially in the modern competitive
world, where everyone works for their self-interest, but will
succeed if we take decisions based on what will benefit a large
number of people and respect everyone’s fundamental rights.
• As individuals we can make our small contributions to society
by donating money to trustworthy, saving our resources by
reducing our consumption, E.g. by switching off lights or
computers when not in use.

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• Corporate social responsibility is nothing but how the business
takes responsibility for social, economic and environmental
impacts it may produce from its operation or products.
• Corporate social responsibility (CSR, also called corporate
responsibility, corporate citizenship, and responsible business)
• Organization’s obligation to make decisions and take actions
that will enhance the welfare and interests of society and
organization.
• Being a good corporate citizen.
• Organizations voluntarily taking further steps to improve the
quality of life for employees and their families as well as for the
local community and society at large.

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• ISR is about an individual becoming responsible in his/her
actions that have affect on communities outside his/her
immediate circle.
• The immediate circle being family and friends.
• There can be an argument about also including family and
friends, but it would be rather pertinent to include them as part
of Individual Personal Responsibility.
• ISR expands on this by promoting a proactive stance towards
positively influencing and affecting the people and
environments outside your immediate circle.
• ISR is at the roots of CSR, because a corporate comprises of
individuals and hence determines the social responsibility
culture it creates. This is the intermingled relationship between
CSR and ISR.

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• Social Opposition

• Social Obligation

• Social Response

• Social Contribution

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Businesses response to social responsibility tend to fall within four
categories:
•So c ia l O p p o s itio n: View taken by business is that they have no
obligation to the society in which they operate.
•So c ia l o blig a tio n: Companies believe that they have an obligation
to obey the law.
•So c ia l re s p o ns e : Position taken by companies which believe that
their social responsibilities are as dictated by law and will on
selective basis go beyond the legal requirements. These units may
volunteer to participate in limited socially responsible efforts, but
not until they are convinced that the benefits outweigh the costs.
•So c ia l c o ntributio n: Position taken by Companies which believe
that they have a deep obligation to serve the society.

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• Business enterprises are
creatures of society and
should respond to the
demands of society.

• If the management does

not react to changes in
social demands, the
society will either force
them to do so through laws
or will not permit the
enterprise to survive.

• Therefore the long-term

interests of business are
best served when
management assume
social responsibilities. 17
• The image of business
organization are liked with
the quality of its products
and customer service and
the extent to which it fulfills
the expectations of owners,
employees, consumers,
government and the
community at large.

• For long-term success it

matters a great deal if the
firm has a favorable image
in the public mind.

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• Every business enterprise
is a organ of society and its
activities have impact on
the social scene.

• Therefore, it is important for

management to consider
whether their policies and
actions are likely to
promote the public good,
advances the basic values
of society, and constitute to
its stability, strength and
harmony.
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• Increasing concern for the
social responsibility of
management, it is now
recognized that besides
taking care of the financial
interest of owners,
managers of business firms
must also take into account
the interest of various other
g ro up s such as employees,
consumers, the government
and the community as a
whole.

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• The primary
responsibilities of
management is to assure
a fair and reasonable rate
of return on capital and
fair return on investment
can be determined on the
basis of difference in the
risks of business in
different fields of activity.

• With the growth of

business the
shareholders can also
expect appreciation in the
value of their capital.
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• Management
responsibility towards
employees relate to the
fair wages and salaries,
satisfactory work
environment, labor
management relations
and employee welfare.

• Fair wages should be

fixed in the light of labor
productivity, the prevailing
wage rates in the same or
neighboring areas and
relative importance of
jobs.
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• Manager’s salaries and
allowances are expected to
be linked with their
responsibility, initiative and
skill.

• But the spread between

minimum wages and
highest salaries should be
reasonable.

• Employees are expected to

build up and maintain
harmonious relationships
between superior and
subordinates.
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• In a competitive
market, serving
consumers is
supposed to be a
prime concern of
management.

• But in reality perfect

competition does not
prevail in all product
markets. In the event
of shortage of supply
there is no automatic
correction.
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• Consumer interests
are thus protected to
some extent with laws
and pressure of
organized consumer
groups.

• Management should
anticipate these
developments, satisfy
consumer needs and
protect consumer
interests.
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• Goods must be of
appropriate standard
and quality and be
available in adequate
quantities at
reasonable prices.
• Management should
avoid resorting to
hoarding or creating
artificial scarcity as
well as false and
misleading
advertisements.

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• As a part of their social
responsibility,
management must
conduct business affair in
lawful manner, honestly
pay all the taxes and
dues, and should not Wages and Salari

corrupt public officials for

selfish ends.

• Business activities must

also confirm to the
economic and social
policies of the
government.

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• The socially responsible
role of management in
relation to the community
are expected to be
revealed by its policies
with respect to the
- employment of handicapped
Wages and Salari

persons & weaker sections

of the community.
- environmental protection
- pollution control
- setting up industries in
backward areas
- providing relief to the victims
of natural calamities etc.

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> All So c ia l re s p o ns ibility, bo th ind ivid ua l a nd
c o rp o ra te , is vo lunta ry.
> It is a bo ut g o ing a bo ve a nd be y o nd wha t is c a lle d
fo r by the la w (le g a l re s p o ns ibility ).
> It invo lve s a n id e a tha t it is be tte r to be p ro a c tive
to wa rd a p ro ble m ra the r tha n re a c tive to a p ro ble m .
> So c ia l re s p o ns ibility m e a ns e lim ina ting c o rrup t,
irre s p o ns ible o r une thic a l be ha vio r tha t m ig ht bring
ha rm to the c o m m unity, its p e o p le , o r the
e nviro nm e nt be fo re the be ha vio r ha p p e ns .

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•Internet websites .