MP Board Class 11th Business Studies Important Questions Chapter 6 Social Responsibility of Business and Business Ethics

MP Board Class 11th Business Studies Important Questions Chapter 6 Social Responsibility of Business and Business Ethics

Social Responsibility of Business and Business Ethics Important Questions

Social Responsibility of Business and Business Ethics Objective Type Questions

Choose the correct answer:
Question 1.

Question 1.
Social responsibility is –
(a) Same as legal responsibility
(b) Broader than legal responsibility
(c) Narrower than legal responsibility
(d) None of these.
Answer:
(b) Broader than legal responsibility

Question 2.
If business is to operate in a society which is full of diverse and complicated problems, it may have –
(a) Little chance of success
(b) Great chance of success
(c) Little chance of failure
(d) No relation with success or failure.
Answer:
(a) Little chance of success

Question 3.
Business people have the skills to solve –
(a) All social problems
(b) Some social problems
(b) No social problems
(d) All economic problems.
Answer:
(a) All social problems

Question 4.
That an enterprise must behave as a good citizen is an example of its responsibility towards –
(a) Owners
(b) Workers
(c) Consumers
(d) Community.
Answer:
(d) Community.

Question 5.
Environmental protection can best be done by the efforts of –
(a) Business people
(b) Government
(c) Scientists
(d) All the people.
Answer:
(d) All the people.

Question 6.
Carbon monoxide emitted by automobiles directly contributes to –
(a) Water pollution
(b) Noise pollution
(c) Land pollution
(d) All of the above.
Answer:
(d) All of the above.

Question 7.
Which of the following can explain the need for pollution control –
(a) Cost savings
(b) Reduced risk of liability
(c) Reduction of health hazards
(d) All of the above.
Answer:
(d) All of the above.

Question 8.
Which of the following is capable of doing maximum good to society :
(a) Business success
(b) Laws and regulations
(c) Ethics
(d) Professional management.
Answer:
(c) Ethics

Question 9.
Ethics is important for –
(a) Top management
(b) Middle-level managers
(c) Non – managerial employees
(d) All of the above.
Answer:
(d) All of the above.

Question 10.
Which of the following alone can ensure effective ethics programme in a business enterprise –
(a) Publication of a code
(b) Involvement of employees
(c) Establishment of compliance mechanisms
(d) None of these.
Answer:
(b) Involvement of employees

Question 11.
Which of the following statement is correct –
(a) Increase in agricultural land due to land pollution
(b) Plantation near by industries decreases the noise pollution
(c) Land pollution increases due to use of plastic bags
(d) Use of fertilizers, chemicals and pesticides increases air pollution.
Answer:
(c) Land pollution increases due to use of plastic bags

Question 12.
Which is not the reason of water pollution –
(a) Disposal of human waste in rivers and canals
(b) Proper management of cleaning of the severage
(c) Use of harmful chemical in agriculture getting mixed in the water
(d) Smoke emitted from the burning of forest, oil refining industries.
Answer:
(b) Proper management of cleaning of the severage

Question 13.
Which responsibility of the business is not the responsibility of the business to the government –
(a) Following the pollution laws as set by the government
(b) Establishment of the industrial undertaking as per the government norms
(c) Providing after sales service
(d) Payment of the fees, tax, surcharge etc. with the honesty.
Answer:
(c) Providing after sales service

Question 14.
Which is not correct –
(a) The business should have only aim to achieve profits by any proper or improper way
(b) Business deals its social responsibility properly
(c) Proper behaviour with the others
(d) Black marketing of the goods is unethical.
Answer:
(a) The business should have only aim to achieve profits by any proper or improper way

Question 15.
Which work is ethical –
(a) Adulteration in goods
(b) Selling of duplicate goods with brand names
(c) Exploitation of the employees
(d) Honesty in dealing with customers.
Answer:
(d) Honesty in dealing with customers.

Question 16.
Which business do not have social responsibility towards the investors –
(a) Providing security to capital
(b) Ensuring fair dividend
(c) Proper use of die capital
(d) Giving proper remuneration.
Answer:
(d) Giving proper remuneration.

Question 17.
Which business do not have social responsibility towards the customers –
(a) Making availability of good quality goods at the proper rate
(b) Disclosing truth in advertisement
(c) Providing share in profit
(d) No adulteration in the goods.
Answer:
(c) Providing share in profit

Question 18.
Environment conservation means keeping environment free from –
(a) Air pollution
(b) Water pollution
(c) Noise pollution
(d) All of the above.
Answer:
(d) All of the above.

Question 19.
Which one of the following is the social responsibility of the business –
(a) Giving fair return to the investors
(b) Fair remuneration
(c) Consumer based production
(d) All of the above.
Answer:
(d) All of the above.

Question 20.
Which is ethical behaviour –
(a) Giving less remuneration to the employees
(b) Selling inferior goods
(c) Honest behaviour with the customer
(d) Polluting the environment.
Answer:
(c) Honest behaviour with the customer

Question 21.
Environment should be conserved by –
(a) Government
(b) Enterprenerus
(c) Society
(d) All of the above
Answer:
(d) All of the above

Question 22.
Demerit of pollution is –
(a) Savings in cost
(b) Less liability
(c) Bad health
(d) None of these
Answer:
(c) Bad health

Question 23.
Business ethics are necessary for –
(a) General employees
(b) Middle level employees
(c) High level employees
(d) All of the above
Answer:
(d) All of the above

Question 2.
Fill in the blanks:

1. ……………. are the basis of business world related to decision making policies of
   business.
2. In ……………. all the decision are implemented regarding social values and objectives.
3. Business Ethics is above the …………….
4. In business there is main motive of social welfare is ……………. related to it.
5. Business have some ……………. towards society.
6. ……………. pollution is caused by running vehicle on the road.
7. Business and society are ……………. to each other.
8. Industrial waste is a source of …………….
9. ……………. reduces the hearing capacity. .
10. The group of effective sub – system in which all the living being are lived is called …………….

Answer:

1. Social obligation
2. Ethics
3. Business
4. Directly
5. Liability
6. Air
7. Closely related
8. Soil pollution
9. Noise pollution
10. Environment.

Question 3.
Write true or false:

1. Customer’s / Consumer’s are the king of market
2. Business ethics are totally inspired with profit.
3. Returning back of bad quality of goods are the example of social obligations.
4. To protect atmosphere is not a social obligation.
5. Pollution control is a part of society.
6. Business legislation only can be in written form.
7. There is no difference between policies and legislation.
8. Environment pollution do not cause any harm’in business.
9. Population is not a cause of pollution.
10. Paying govt taxes is not a social duties.

Answer:

1. True
2. False
3. True
4. False
5. True
6. False
7. False
8. False
9. False
10. False.

Question 4.
Match the columns:

Answer:

1. (e)
2. (c)
3. (a)
4. (d)
5. (f)
6. (j)
7. (b)
8. (g)
9. (h)
10. (i)

Question 5.
Give answer in one word / sentence:

Question 1.
Write two responsibilities of business towards customers?
Answer:

1. Good quality goods at proper price
2. Educating customers regarding goods.

Question 2.
Give one difference between implementation policy and law?
Answer:
All those works which is against the law is punishable but all unethical work is not punishable.

Question 3.
Write two points in favour of social responsibility?
Answer:

1. Self interest and
2. Public faith.

Question 4.
Write the types of social responsibility?
Answer:
The main types of social responsibilities are:

1. Economical responsibility
2. Legal responsibility
3. Moral responsibility
4. Intellectual responsibility.

Question 5.
Write the names of those groups to whom the business has to follow some duties?
Answer:

1. Customers
2. Employees
3. Shareholders
4. Community
5. Government
6. Suppliers.

Question 6.
What the business has to do in order to avoid the government interference?
Answer:
Business has to follow the social responsibility in order to avoid government interference.

Question 7.
“Security of the capital”. Which responsibility of business in this and to whom?
Answer:
It is responsibility of business towards the investors.

Question 8.
Which pollution is caused by the industries?
Answer:
Air pollution.

Question 9.
How water gets polluted?
Answer:
Water gets polluted by two ways:

1. Dumping of industrial waste in the rivers
2. Dirty water of industries is mixed to water of the rivers

Question 10.
Which diseases are caused by noise pollution?
Answer:
Followings are the diseases caused by noise pollution:

1. Deafness
2. Violent behaviour and
3. Mental imbalance.

Question 11.
How air can be savad/rom being polluted?
Answer:
Air can be saved from being polluted by scientific emitting of smoke and gases.

Question 12.
Write any four elements of business ethics?
Answer:
Four elements of business ethics are:

1. Honesty
2. Equality
3. Prosperity
4. Guidance power.

Question 13.
What is Idealism?
Answer:
Idealism are those beliefs which motivates the businessmen to do business with honesty.

Question 14.
What do you mean by environment conservation?
Answer:
Environment conservation means to save environment from air pollution, water pollution and noise pollution.

Question 15.
“To provide the opportunity of employment” This responsibility of the business related to whom?
Answer:
It is responsibility of the business towards the community.

Question 16.
Give three non – ethic classical business behaviour?
Answer:
The three non – ethic classical business behaviours are:

1. Adulteration in the goods and
2. Supply of inferior goods and
3. Fraud advertisement.

Question 17.
Write two points of business in business conservation.
Answer:

1. To take positive steps for environment conservation.
2. To produce eco – friendly goods.

Question 18.
Write two points which indicate the need of pollution control?
Answer:

1. Natural beauty and
2. Reduction in infacilities.

Question 19.
Write two ill effects of environment problem?
Answer:
Two ill effects are:

1. Ozone layer gets depleted and increase in temperature level.
2. Loss to forest and their spread gets restricted.

Question 20.
Why Eco – Mark is used?
Answer:
For pollution control.

Question 21.
Sound from loudspeaker causes which kind of pollution?
Answer:
Sound pollution.

Question 22.
Which economy is adopted by India?
Answer:
Social democratic.

Question 23.
What kind of relation is there between the business and society?
Answer:
Deep relationship.

Question 24.
Which kind of pollution is there by the use of chemical fertilizers and the insecticides?
Answer:
Land/soil pollution.

Question 25.
Which pollution occurs when garbage is dumped in open?
Answer:
Soil pollution.

Social Responsibility of Business and Business Ethics Very Short Answer Type Questions

Question 1.
Write the ancient concept of social responsibility?
Answer:
Old Concept: From the mid of twentieth century, the concept of business has taken a new shape. Before this there was no special relation between society and business. Businessmen took profit as per their wish/need. The method of doing business was also undeveloped. The mean of transport and communication were limited to big cities and there was lack of social awareness.

Question 2.
What is Capitalist Economy?
Answer:
In capitalistic economy, there is monopoly of the capitalists. In other words, they rule over the market and their main aim is to earn maximum profit. The creator of all the resources had full right to utilize these resources as per their convenience. In perfect competition, the price of goods was determined on the basis of demand and supply and government did not interfered unnecessarily.

Question 3.
Define social responsibility?
Answer:
In the words of Keith Davis, “Social responsibility of a business imply that the businessmen’s decision and actions are taken for reasons at partially beyond the firms direct economic and technical interest.”

Question 4.
Define Business Ethics?
Answer:
“Business ethics is an art and science of maintaining proper harmonious relationship with society, its various groups and institutions as well as recognizing the moral responsibility for the rightness or wrongness of business.conduct.”

Question 5.
Write the meaning of social responsibility of the business?
Answer:
Social responsibilities of business refer to those obligations which is undertaken by a businessman to maintain relations with different sections/groups of the society. To manage a business keeping in mind the interests of different sections/groups of the society is known as social responsibilities of business.

Question 6.
What is meant by Business Ethics?
Answer:
Business ethics refers to those business practices which are desirable and acceptable from the point of view of the society. Every business activity influences the society directly or indirectly. The society has got certain expectations from the businessmen regarding the quality of goods, price of the goods, revealing true information about the product, etc.

Question 7.
What do you mean by Environmental pollution?
Answer:
The introduction of contaminants into the natural environment that cause adverse changes in the environment is called as environmental pollution.

Question 8.
What is meaning of Environment?
Answer:
The surroundings or conditions in which a person, animal or plant lives or operates in the natural world is called as environment.

Question 9.
Why water pollution occurs?
Answer:
Water pollution is caused by dumping of chemical, waste in water bodies like rivers, streams etc. It led to the death of several animals and posed a serious threat to human life.

Question 10.
Why Soil pollution occurs?
Answer:
Land pollution is caused by the dumping of toxic wastes on land or soil which damages the quality of land making it unfit for agriculture or plantation.

Social Responsibility of Business and Business Ethics Short Answer Type Questions

Question 1.
Write the Environmental problems.
Answer:
UNO has given eight problems of the environment:

1. Ozone depletion
2. Global warming
3. Collection of wastes
4. Soil pollution
5. Decline in fresh water
6. Decrease in forest
7. Land degradation
8. Change in living organisms.

Question 2.
Give meaning of Noise pollution?
Answer:
The disturbing noise with harmful impact on the activity of human or animal life is called as Noise pollution.

Question 3.
What is meaning of social responsibility of business?
Answer:
Social responsibility of business refers to its obligation to perform those actions which are desirable. In terms of the objectives and values of our society and benefit the community business cannot exist with the sole purpose of maximizing profits and has to undertake various activities for public goods so as to maintain goodwill among people.

Question 4.
Write the different types of social responsibility.
Answer:
Different types of social respontibilities are:

1. Responsibility towards Shareholders
2. Responsibility towards Customers
3. Responsibility towards Employees
4. Responsibility towards other Businessmen
5. Responsibility towards Community.

Question 5.
What reasons are given in favour of social responsibilities?
Answer:
Following reasons are given for the social responsibility:

1. Fulfillment of businessmen’s wishes
2. Legal requirement
3. Business is a part of society
4. Moral responsibility.

Question 6.
Give reasons against the social responsibilities.
Answer:
Arguments against the social responsibilities are:

1. Profits becomes diluted
2. Lack of Motivation
3. Lack of Standards
4. Lack of Social Awareness
5. Burden on Consumers.

Question 7.
Define Business Ethics.
Answer:
“Business ethics is an art and science of maintaining proper harmonious relationship with society, its various groups and institutions as well as recognizing the moral responsibility for the rightness or wrongness of business.conduct.”

Question 8.
Write the assumptions of Business Ethics.
Answer:
Assumptions of Business Ethics are:

1. Business ethics has its own rules which guides them.
2. All ethics of the business is included in it.
3. Both legal provisions and ethical responsibilities are included.

Question 9.
Write principles of Business Ethics.
Answer:
Principles of Business Ethics are:

1. Not helping in evil
2. Helping others
3. Purity of mean and end
4. No evil purpose
5. Working with proportionate view.

Question 10.
What is Environment?
Answer:
The surroundings or conditions in which a person, animal or plant lives or operates in the natural world is called as environment.

Question 11.
What are included in Natural Resources?
Answer:
Natural Resources are:
Land, water, air, flora, fauna and raw materials.

Question 12.
What are man – made resources?
Answer:
Man – made resources are:

1. Socio – econoipic resources
2. Cultural legacy
3. Resources for industrialization like cement, electricity etc.

Question 13.
How pollution is harmful for the human life?
Answer:
Pollution is harmful for the human life because it declines the level of life and causes loss to the cultural legacy. It also affect environment and the human health.

Question 14.
What are the reasons of the pollution?
Answer:
Followings are the causes of the pollution:

1. Pollution of the air due to chemical and garbage wastes
2. Polluted wastes affecting the soil
3. Loudspeakers, radio, factory sound and vehicle smokes also leading to pollution.

Question 15.
Why there is need of pollution control?
Answer:
Pure air, water and soil is the basic requirement of the flora and fauna. Hence, it is very important to control the pollution for saving their life. Pollution cannot be controlled fully but if can be minimized.

Question 16.
What is business ethics? Mention the basic elements of business ethics.
Answer:
‘Ethics’ is a Greek word meaning character, norms, ideals or morals prevailing in a group or society. Business ethics refers to the relationship between business objectives, practices, techniques and the good of society, it is concerned with the socially determined moral principles which should govern business activities.

The basic elements of business ethics are:

1. Top management commitment
2. Publication of a Code
3. Establishment of compliance mechanism
4. Involving employees at all levels
5. Measuring results.

Question 17.
What scope of social responsibilities of the business?
Answer:
It is divided into four parts:

1. Economic Responsibility
2. Legal Responsibility
3. Moral Responsibility
4. Personalised Responsibility.

Question 18.
What is Environment? Why Environment pollution occurs?
Answer:
The surroundings or conditions in which a person, animal or plant lives or operates in the natural world is called as environment. Environment pollution occurs because of die wastages, smoke and chemical which get mixed with air, water and soil.

Question 19.
What is social responsibility of business? How it is different from legal responsibility?
Answer:
In the words of Keith Davis, “Social responsibility of a business imply that the businessmen’s decision and actions are taken for reasons at partially beyond the firms direct economic and technical interest.”

Question 20.
Write note on?

1. Air pollution
2. Water pollution
3. Soil pollution.

Answer:

1. Air pollution:
Air pollution is caused by a combination of factors which lowers the air quality. It is mainly due to carbon monoxide emitted by automobiles, smoke and other chemicals from manufacturing plants which are released in tile air. Air pollution has created a hole in the ozone layer leading to dangerous warming of the Earth.

2. Water pollution:
Water pollution is caused by dumping of chemical, waste in water bodies like rivers, streams etc. Water pollution has led to the death of several animals and posed a serious threat to human life.

3. Land pollution:
Land pollution is caused by the dumping of toxic wastes on land which damages the quality of land making it unfit for agriculture or plantation.

Question 21.
Explain the meaning and need of social responsibility.
Answer:
Meaning:
In the words of Keith Davis, “Social responsibility of a business imply that the businessmen’s decision and actions are taken for reasons at partially beyond the firms direct economic and technical interest.”

There is need of social responsibility because of following reason:

1. To achieve the best social objective
2. To encourage investment
3. To provide social help.

Responsibility of Business and Business Ethics Long Answer Type Questions – I

Question 1.
List the measures taken by the government in order to have control on pollution?
Answer:
Following measures are taken by the government in order to have control on pollution

1. It has created many social sections and people can approach to Supreme Court
2. Getting environmental acceptance before starting any project
3. Promotion of use of eco – friendly implements.
4. Establishment of WMC for slum wastages.

Question 2.
Explain the importance of Business Ethics?
Answer:
Followings are the importance of Business Ethics:

1. To create good relationship
2. To promote best social objectives
3. To promote profitable investment
4. Social co – operation
5. Proper guidance to the business
6. Achievement of social objectives.

Question 3.
What are the social responsibility of the business toward the shareholders and owners?
Answer:
Followings are the social responsibilities of the business toward the shareholders and owners

1. Proper return on invested capital
2. Security of the capital
3. To make available important information
4. Equal behaviour to all shareholders
5. Registration of shares to the stock market.

Question 4.
Write the responsibility of the business to the employees?
Answer:
Followings are the responsibility of the business to the employees:

1. Proper remuneration to the employees
2. To make them permanent
3. Social security and their welfare
4. Fair wage system
5. Share in profit
6. Compensation at accident
7. Providing opportunity of promotion
8. Ideal code of conduct.

Question 5.
What steps can an enterprise take to protect the environment from the dangers of pollution?
Answer:
Some of the specific steps which can be taken by business enterprises to protect the environment from the dangers of pollution are as follows:

1. Top Management Commitment:
The first and the foremost step is to have a definite commitment by top management of the enterprise to create, maintain and develop work culture for environmental protection.

2. Legal Compliance:
A very important and essential step is to comply with the laws and regulations enacted by the government for prevention of pollution.

3. Voluntary Participation:
Participation in government programities relating to management of hazardous substances. Clearing up of polluted rivers plantation of trees and checking deforestation is also an important step in environmental, protection by business enterprises.

4. Measuring Results:
Periodical assessment of pollution control programmes in terms of costs and benefits is also essential in order to have a steady progress with respect to environmental protection.

5. Education and Training:
Another step that can be taken for environmental protection is arranging educational workshops and training materials to share technical information and experience with suppliers, dealers and customers to get them actively involved in pollution control programmes.

Question 6.
Explain the various elements of business ethics.
Answer:
The various elements of business ethics are as under:

1. Top Management Commitment:
The Chief Executive Officer (CEO) and other higher level managers need to be openly and strongly committed to ethical conduct as top management has a crucial role in guiding the entire organization towards ethical behaviour.

2. Publication of a ‘Code’:
The principles of conduct for the organization in the form of written documents are referred to as the “code”. It generally covers areas such as fundamental honesty and adherence to laws : Product safety and quality health and safety in the workplace conflicts of interest; fairness in selling/marketing practices; and financial reporting.

3. Establishment of Compliance Mechanisms:
Suitable compliance mechanisms should be established to ensure that actual decisions and actions comply with the firm’s ethical standards. Some examples of such mechanisms are Considering values and ethics in recruiting and hiring emphasizing corporate ethics in training; auditing performance regularly to analyze the degree of compliance and instituting communication systems to help employees report incidents of unethical behaviour.

Question 7.
Explain social responsibility of business toward different group of the society.
Answer:
Social responsibilities of business toward different group of the society are as follows:

1. Responsibility towards the Shareholders or Owners:
A business enterprise has the responsibility to provide a fair return to the shareholders or owners on their capital investment and to ensure the safety of such investment.

2. Responsibility towards the Workers:
Management of an enterprise is also responsible for providing opportunities to the workers for meaningful work and ensures fair wage for their work.

3. Responsibility towards the Consumers:
Supply of right quality and quantity of goods and services to consumers at reasonable prices constitutes the responsibility of an enterprise toward its customers.

Social Responsibility of Business and Business Ethics Long Answer Type Questions – II

Question 1.
Build up arguments for social responsibilities and against social responsibilities.
Answer:
Arguments for Social Responsibility:

1. Justification for Existence and Growth:
The mission of every business is to provide goods and services to satisfy human wants. Profit should be viewed^s an outcome of services to the people. Thus, practice of social responsibility by business provides justifications for its existence and growth.

2. Long – term Interest of the Firm:
Social responsibility enhances the image and goodwill of the firm and results in maximum profits in the long run. If members of the society like workers, consumers, shareholders, and government officials are not convinced that the business enterprise is socially responsible, they will tend to withdraw their cooperation to the enterprise concerned.

3. Avoidance of Government Regulation:
Government regulations limit the freedom of business. It is believed that businessmen can avoid the problem of government regulations by voluntarily assuming social responsibilities, which helps to reduce the need for new laws.

Arguments for Against Social Responsibility:

1. Violation of Profit Maximization Objective:
According to this argument, business exists only for profit maximization and social responsibility is against this objective. Social responsibility of business is fulfilled it. It maximizes profits through increased efficiency and reduced costs.

2. Burden on Consumers:
It is argued that social responsibilities like pollution control and environmental protection involve huge costs which are likely to be shifted on to the consumers in the form of higher prices.

3. Lack of Social Skills:
According to this argument social problems should be solved by specialized agencies as businessmen do not have the necessary understanding and training to solve social problems.

Question 2.
Discuss the forces which are responsible for increasing concern of business enterprises toward social responsibility?
Answer:
The following forces have been responsible for increasing concern of business enterprises toward social responsibility:

1. Threat of Public Regulation:
Threat of public regulation is one important reason due to which business enterprise feels concerned with social responsibility. Democratically elected governments have to take care of every section of the societies thus regulating the businesses behaving in a socially irresponsible manner.

2. Pressure of Labour Movement:
Labour movement for ensuring fair gains for the working class throughout the world has become very powerful as labour has become far more educated and organized. This has forced business enterprises to pay due regard to the welfare of workers.

3. Impact of Consumerism:
Development of education and mass media and in-creasing competition in the market have made the consumer aware of his rights and power which has forced business enterprises to follow a customer oriented approach.

4. Development of Social Standard for Business:
New social standards consider economic activity of business enterprises as legitimate but with the condition that they must also serve social needs. Business functioning is to be ultimately judged on the basis of social standards.

Question 3.
Why do the enterprises need to adopt pollution control measures?
Answer:
Protection of the environment is a serious issue that confronts business managers and decision makers.

Business enterprises need to adopt pollution control measures due to following reasons:

1. Reduction of Health Hazards:
Pollutants in the environment can cause many complications, diseases like cancer, heart attacks and lung measures are needed to check the spread of such diseases for ensuring a healthy life on earth.

2. Reduced Risk of Liability:
If an enterprise is held liable for causing damage to people by the toxicity of gaseous, liquid and solid wastes it has released into the environment. It may be required to pay compensation to affected people. This risk of liability can be reduced by installing pollution control devices in its premises.

3. Cost Savings:
Improper production technology results in greater wastes which leads to higher cost of waste disposal and cost of cleaning the plants. An effective pollution control programme can thus save operating costs of business.

4. Improved Public Image:
Society today is conscious of environmental quality and hence a firms policies and practices for controlling wastes influence people’s attitude towards its working. A firm that adopts pollution control measures will be perceived as a socially responsible enterprise.

Question 4.
‘Business is essentially a social institution and not merely a profit making activity. Explain?
Answer:
A business enterprise is permitted by society to carry on industrial or commercial activities and earn profits from it. Therefore, a business enterprise is expected to do business and earn money in ways that fulfil the expectations of the society like every individual living in society, business too has certain obligations toward society in terms of respect for social values and norms of behaviour.

It is obligatory on part of the business enterprise not to do anything that is undesirable from society’s point of view. Manufacture and sale of adulterated goods, making deceptive advertisements, evading taxes, polluting the environment and exploiting workers are some examples of socially undesirable practices which may increase the profit of enterprises but which have adverse social effects.

On the other hand, supplying good quality goods, creating healthy working conditions, honestly paying taxes, prevention of pollution and resolving customer complaints are examples of socially desirable practices which improve die image of enterprises leading to higher profits in the long run.

The major areas of social responsibility of business which explain that business is essentially a social institution and not merely a profit making activity include the following:

1. Responsibility towards the Shareholders or Owners:
A business enterprise has the responsibility to provide a fair return to the shareholders or owners on their capital investment and to ensure the safety of such investment.

2. Responsibility towards the Workers:
Management of an enterprise is also responsible for providing opportunities to the workers for meaningful work and ensures fair wage for their work.

3. Responsibility towards the Consumers:
Supply of right quality and quantity of goods and services to consumers at reasonable prices constitutes the responsibility of an enterprise toward its customers.

MP Board Class 11 Business Studies Important Questions