Question

Explain what is meant by social responsibility and ethics? Discuss how these issues relate to the primary goal of the firm?

Answer 1

Social responsibility and ethics is a part of corporate social responsibility of the business organisation and it will be referring to the need of business to be good corporate citizens and it will involve that the business is having a social responsibility and it is required to adopt to highest possible standard in order to to go beyond the requirement of the law in protecting the environment and contributing to the social welfare so it is one of the stakeholder of the business and hence business should be trying to to go beyond earning money for the shareholder and it will be concerned with protecting the interest of all the stakeholders which will include employees along with customers and suppliers and other communities in which the businesses are operating.

There are various types of social responsibilities of the business which will include humane employee practices along with caring for the environment and engaging in the philanthropic endeavour. Business should be adopting a very high standard of ethics in its organisational culture which will be protecting the interest of stockholders to a large extent and that will be trying to to believe in protection of the environment and contributing to the social welfare so it will be responsibility of the business to accept it as a part of their regular business procedure.

The primary goal of business is to make money for its shareholders and increase the shareholders wealth so it is often contended that the companies are owing no duty to the society outside making money for the shareholders so it is just a contradiction of the main objective of the business because the primary objective is focusing upon protection of the interest of the shareholders rather than protecting the interest of the society so companies should be always trying to find a balance between both.