Question

Unit III
Corporate Social Responsibility- meaning, nature and relevance; Ethics and social
responsibility; Profit Maximization; Forms of social responsibility- social obligation, social
reaction, social responsiveness; Importance of Values in Management;

NOTES FOR CORPORATE GOVERNANCE

Answer 1

Corporate governance, as the name suggests it deals with factors that affect the interests of a company which includes its management, customers, suppliers, government bodies etc… It is the combination of rules and other laws by which the operations are controlled or regulated.

Corporate Social Responsibility:-

As we all know that, social responsibility is the main part of everybody’s day to day life. We all shall have a clear idea how our actions may create an impact in the society, same thing happens in case of a company. By designing and implementing the corporate social responsibility structure a company can be aware of how its actions may affect the society and also its economic background. By adopting this culture, a company can have a strong relationship and bonding with their stakeholders, partners and customers and this will help to run a healthy business deal. Each company, rather than creating much profit and more stakeholders its better for them to think at least once how their actions shall be creating a positive impact to the society.

Ethics & Social Responsibility:-
Inspite of running a business only for profit maximization its far better to adhere to certain business ethics along with social responsibility, which in turn makes that business a high success and also it will be a having high good will in the society. This may lead to increase in its stake value and also may attract many stakeholders and thereby customers too. Such businesses may last for long period without any hiccups. Society and common people may understand the correct objective of the business and will support it always.

Profit maximization:-

It’s the time at which the company reaches or fixes a price for the particular product. At this time the selling price of the product shall be greater that the total cost of the product. This may not be practical always, for e.g. if the competitor increases/decreases the product’s price we shall also certain variations in our price to maintain in the market in this case the price fixing may not be possible. In other words we can say that profit maximization is the time limit at which the company gains the maximum compared to the total cost.

Forms of social responsibility:-

Social Obligation:

As the term suggests, it’s obeying the social rules/regulations/traditions while running a business. Rather than aiming profit alone if one company is running the business adhered to these social policies it may have a good opinion among society.

Social Reaction:

Social reaction shall be explained with a live example – Media. Media personnel react to the social issues or concerns from all aspects of the society. Thru that, society will have a clear idea of the relevance of the issue and can take a decision accordingly.

Social responsiveness:

Main aim of the social responsiveness is to contribute towards the welfare of others. For e.g. helping a person who doesn’t have anyone to take care, doing certain charity works etc. By this manner, a company can respond and be part of certain social issues which will increase its good will and market value.

Importance of Values in Management:

Values are important at any phase of our life. When we think about values in an organization, it will be unique for each organizations and it totally depends upon the senior management's perspective. Values represents the culture prevailing in an organization. It purely differ from individual to individual, so if a value is designed for a company it needs to be obeyed and implemented by all the staffs being a part of that company and thus a uniform behaviour shall be exhibited in the firm. Its not only aiming for materialistic benefits like profit or market value but its mainly focusing on developing the whole team as a humanbeings too and this will be helping to create a good relationship with company's stakeholders(consumers,suppliers etc). Along with proper operations and financial planning there should be clarity for the value of that particular firm then only we can achieve a best result we are expecting.