Question

4 Compare and contrast moral idealism and utilitari-anism as alternative personal moral philosophies.

5 How would you evaluate Milton Friedman’s view of the social responsibility of a firm?

6 The text lists several unethical practices of con-sumers. Can you name others? Why do you think consumers engage in unethical conduct?

7 Cause marketing programs have become popular. Describe two such programs with which you are familiar.4-8 What is a social audit?Answer: A social audit is a systematic assessment of a firm’s objectives, strategies, and performance in terms of social respon-sibility. It consists of five steps: (1) Recognition of a firm’s social expectations and the rationale for engaging in social responsibil-ity endeavors. (2) Identification of social responsibility causes or programs consistent with the company’s mission. (3) Determina-tion of organizational objectives and priorities for programs and activities it will undertake. (4) Specification of the type and amount of resources necessary to achieve social responsibility objectives. (5) Evaluation of social responsibility programs and activities undertaken and assessment of future involvement.

Answer 1

Ans 4:- Moral idealism considers individual rights or duties as universal regardless of the outcome. Utilitarianism focused on the "greatest good for the greatest number" by assisting the cost and benefits of the consequences of ethical behavior. It is important to note that moral idealism does not consider costs , benefits, or consequences , as does utilitarianism. However, utilitarianism does not consider rights or duties outside the context of ethical behavior.

Ans 5 :--The Friedman doctrine, also called shareholder theory or stockholder theory, is a normative theory of business ethics advanced by economist Milton Friedman which holds that a firm's main responsibility is to its shareholders.^[1] This shareholder primacyapproach views shareholders as the economic engine of the organization and the only group to which the firm is socially responsible. As such, the goal of the firm is to maximize returns to shareholders.^[1] Friedman argues that the shareholders can then decide for themselves what social initiatives to take part in, rather than have an executive whom the shareholders appointed explicitly for business purposes decide such matters for them.^[2] The Friedman doctrine has been very influential in the corporate world but has also attracted criticism.

Ans 6 :--

Consumers regularly engage in unethical practices for various reasons as it is evident in the chapter. There are many ways through which consumers engage in unethical practices. These are:

1) Consumers very frequently buy in the grey market. These grey markets provide smuggled products at cheaper costs which hurt the local manufacturing business.

2) Consumers often buy duplicate products as they are cheaper and still give a feeling of owning a branded product.

3) Stealing products from local shopping stores is a major unethical behaviour by consumers.

And 7:---

Lightning-fast Internet speeds, mobile technology, and international business have brought the world closer together than ever before. With this closeness comes an awareness of the global hardships that many ignored in the past.

As consumers become more aware of the inequality surrounding them, they seek to make differences. Cause marketing – the cooperative effort between a for-profit and a non-profit for their mutual benefit - gives people the opportunity and knowledge they need to help. Profit-generating, powerful global brands have the resources to raise awareness of nonprofit organizations, while also promoting their product.The principles of cause marketing refer to aligning a brand with a cause to produce profitable and societal benefits for both parties. These mutual benefits can include the creation of social value, increased connection with the public, and the communication of shared value, as well as profit.

Cause marketing is a relatively new field in the marketing arena, introduced in 1976 through a partnership between Marriot Corporation and the March of Dimes. The two worked together to promote Marriot’s family entertainment complex in Santa Clara California while raising funds for the March of Dimes’ cause – the prevention of birth defects in babies. The campaign was successful on both counts, and corporations around the globe followed suit.

Today, cause marketing campaigns run the gamut from large, global causes to smaller, local efforts. General examples of cause marketing include public awareness campaigns for breast cancer, licensing of charity trademarks for use in sales, and requests for donations in store check-out lanes.

Meaning and Definition of Social Audit

Different people have interpreted the expression social audit differently. To some authors, it means the public disclosure of a company’s social performance; to others it means internal evaluation of a company’s social responsibility performance. Some authors think that social audit is a comprehensive evaluation of the way a company discharges all its responsibilities to its shareholders, customers, employees, and to the wider community. Thus, there is a total disagreement among the scholars as to the exact meaning, and the components of this novel concept.

Social accounting and Social Audit

Social accounting is a systematic assessment and reporting on those parts of a company’s activities, which have a social impact. It refers to the identification, measurement, recording and reporting the information as to social activities of the concern to its users (both internal and external). On the other hand, social audit refers to the systematic evaluation of an organization’s social performance. Here, its economic performance is not considered. It discloses the company’s involvement in socially oriented activities, activities taken for the well-being of the employers of the concern, activities as to prevention of environment from pollution etc.

Objectives of Social Audit

Goyder defined the objectives of social audit in clear terms. He classified the objectives into two broad categories namely,

1. Principal objectives, and
2. Secondary objectives.

Principal Objectives of Social Audit

The principal objectives according to Goyder are as follows.

1. The extension, development and improvement of the company’s business and building up of its financial independence.

2. The payment of a fair and regular dividend to the shareholders.

3. The payment of fair wages under the best possible conditions to the worker.

4. The reduction of prices to the consumers.

Secondary Objectives of Social Audit

1. Provision of a bonus to the workers.

2. Assist in promoting the amenities of the locality.

3. Assist in developing the industry in which the firm is a member.

4. Promote education, research and development in the techniques of the industry.

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