Business Studies Class 11 Notes: Social Responsibility of Business and Business Ethics for Upcoming exam [AHSEC Class 11 Business Studies Notes 2025]

Business Studies Class 11 Notes
Social Responsibility of Business and Business Ethics for Upcoming exam 
[AHSEC Class 11 Business Studies Notes 2025]

Unit – VI: Social Responsibility of Business and Business Ethics

Q.1. When enterprises behave as good citizen, towards which group are they showing their responsibility?

Ans. Government and community

Q. 2. “A Business owes certain obligations towards different groups” Identify those groups and explain the obligation of business towards those groups.

Ans. Consumer ,Shareholders ,Employees, Government ,Community and Suppliers

Q.3. Which groups expects that the companies must provide good quality and unadulterated goods and services as their social responsibility?

Ans. Consumer group

Q.4 . Name the concept which is concerned with what is right and what is wrong?

Ans. Ethics

Q.5. What is the relationship between ethics and moral values?

Ans. Higher moral values lead to higher ethics.

Q.6. Give any two reasons against social obligation.

Ans. 1.Profit Motive 2.lack of social skill

Q.7. What do you mean by ecology?        

Ans: Ecology is concerned with the relationship of living beings with their natural or physical environment. It provides a framework by which we can see that all living things are related to other living things.

Q.8. Give some examples of business ethics.

Ans: A few examples of ethical business practices are: 1)To charge fair prices from the customers. 2)To use fair weights for measurement of commodities. 3) To pay taxes to the Government honestly.

Q.9. What do you mean by business ethics?

Ans: Business Ethics means the business practices which are desirable from the point of view of the society. For instance, business malpractices such as adulteration, hoarding, black-marketing etc. are not desirable from the point of view of the society and so are termed as unethical.

Q.10. State the concept of social responsibility.

Ans: Social responsibility means the obligation of business to act in a manner, which will serve the best interests of the society. Social obligation of a business relates to the voluntary efforts on the part of businessmen to contribute to the social well-being that goes beyond the production of goods and services at a profit.

Q.11. State the responsibilities of business towards various section of the society.  2006, 07, 09, 10, 15

Ans: Social Responsibility towards different interest groups: A business unit has to decide in which areas it should carry out social good. Few areas are explained below:

Responsibility towards shareholders or owners:

Ø  To provide fair return on their investment

Ø  Ensure safety of their investment

Ø  To provide regular, accurate and full information about the business.

Responsibility towards the workers

Ø  To provide opportunities for meaningful work

Ø  Create the right kind of working conditions

Ø  Respect the democratic rights of the workers and

Ø  Ensure a fair wage deal from the management.

Responsibility towards the consumer

Ø  To provide right quality and quantity of goods and services at reasonable prices

Ø  To avoid adulteration, hoarding, dishonest and misleading advertisements.

Responsibility towards the government & community                  2017

Ø  To respect the laws of the country and

Ø  To pay taxes regularly and honestly

Ø  To act according to well accepted values of the society and to protect environment.

Q.12. State the arguments in Favour and against of social responsibility. 2006, 07, 2016

Ans: Arguments in favour of social responsibility:

1)      Business is a creation of society and it uses society’s resources. So business is responsible to the society.

2)      It is in the long-term self-interest of the business to assume social responsibilities.

3)      Scope for government interference in business will get reduced if the business follows socially responsible policies.

4)      Public image of the business would improve if it fulfills its social obligations.

Arguments against the social responsibility

1)      Primary aim of business is to earn profit which is necessary for its long term existence.

2)      Increase in cost for charitable expenses creates burden on the consumer.

3)      Lack of social skills of businessman because they are not fully aware with social problems.

4)      People’s resistance due to interference from businesses in their problems.

Q.13. Define the role of businesses in environment protection.               2016, 2018

Ans: Business houses should take the following steps to protect environment:

1)      Eco friendly and low waste technology should be used by the industrial organisations.

2)      Industrial waste should be recycled as far as possible.

3)      There should be scientific treatment of all emissions before they are released into the environment.

4)      Plant and machinery should be modernized to minimise pollution.

5)      The business houses should co-operate with the public authorities in their programmes organised for environmental protection

Q.14. What are various kinds of social responsibility?

Ans: Kinds of Social Responsibility

1)      Economic Responsibility: Maximizing profit by producing and selling goods and services required for the society.

2)      Legal Responsibility: Every business needs to operate within the laws of the land. A law abiding enterprise is a socially responsible enterprise as well.

3)      Ethical Responsibility: This includes the behavior of the firm that is expected by the society but not included in law. E.g.. Should respect religious sentiment and dignity of people while advertizing

4)      Discretionary Responsibility: This refers to the voluntary obligations that an enterprise assumes.

Q.9. What do you mean by business ethics? Why should businessmen behave ethically? What are its various elements?       2006, 2016, 2019

Ans: Business Ethics means the business practices which are desirable from the point of view of the society. For instance, business malpractices such as adulteration, hoarding, black-marketing etc. are not desirable from the point of view of the society and so are termed as unethical.

Why should businessmen behave ethically?

The businessman gets access to all resources such as finance, human capital, land etc. from the society and makes profits by selling the same to the society. Therefore he needs to be ethical and shouldn’t make profit at the cost of society.

Elements of Business Ethics                       2017, 2019

1)      Top Management commitment: Higher level managers need to be openly and strongly committed to ethical conduct.

2)      Publication of a ‘code’: ‘Code’ refers to the written ethical programs followed by a particular business or industry – which normally covers the areas of honesty, adherence to laws, product’s safety and quality and fairness in all dealings.

3)      Establishment of Compliance Mechanism: Simply having a written ‘Code of Ethics’ is not sufficient, the business needs to ensure its effective implementation at all levels & throughout the life of the business.

4)      Involving employees at all levels: To make ethical business a reality, employees at all levels must be involved.

5)      Measuring Results: Measuring the results of ethics programs maybe difficult but can have an audit at regular intervals to monitor compliance with ethical standards and decide about further course of action.