Test: Social Responsibilities Of Business And Business Ethics - 4 - Commerce MCQ

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 advertising.

Discretionary Responsibility: This refers to the voluntary obligations that an enterprise assumes. E.g. Charitable contributions, providing relief during natural calamities etc.

The concept being discussed in the given statement is "Social Responsibility". This concept implies that businesses have a moral obligation to make decisions and take actions that align with the values and norms of society. Here is a detailed explanation:
Social Responsibility:
- Businesses are expected to consider the impact of their decisions and actions on society as a whole.
- They should prioritize the well-being of the community, environment, and stakeholders.
- Social responsibility involves acting ethically, being accountable for the consequences of business operations, and contributing positively to society.
- It goes beyond legal requirements and encompasses voluntary initiatives taken by businesses to address social and environmental issues.
- Socially responsible businesses may engage in activities such as philanthropy, sustainability practices, fair labor policies, and community development initiatives.
The given statement highlights the responsibility of businesses to align their decisions and actions with the values and norms of society, thus indicating the concept of social responsibility.

Social responsibility can be further categorized as ethical responsibility, economic responsibility, legal responsibility.

The concept that is being described in the given question is Business Ethics.
Here is a detailed explanation:
Definition:
Business ethics refers to the principles and standards that guide the behavior and decision-making of individuals and organizations in the business world. It involves applying moral values and ethical principles to business activities and interactions.
Characteristics of Business Ethics:
1. Socially determined: Business ethics is influenced by societal norms, cultural values, and legal frameworks.
2. Moral principles: It involves adherence to moral principles such as integrity, honesty, fairness, and respect for others.
3. Governing business activities: Business ethics provides guidelines for ethical conduct in various aspects of business, including employee relations, customer interactions, environmental responsibility, and financial practices.
Importance of Business Ethics:
1. Reputation: Adhering to ethical practices helps businesses build a positive reputation and gain the trust of stakeholders.
2. Customer loyalty: Ethical businesses are more likely to attract and retain customers who value ethical behavior.
3. Employee morale: Companies that prioritize ethics create a positive work environment, leading to higher employee satisfaction and productivity.
4. Legal compliance: Business ethics ensures compliance with laws and regulations, reducing the risk of legal issues and penalties.
5. Sustainable growth: Ethical businesses focus on long-term sustainability by considering the social and environmental impact of their actions.
Examples of Business Ethics:
1. Treating employees fairly and providing a safe work environment.
2. Being transparent in financial reporting and avoiding fraudulent practices.
3. Respecting customer privacy and protecting their data.
4. Engaging in environmentally friendly practices and reducing carbon footprint.
5. Giving back to the community through corporate social responsibility initiatives.
In conclusion, business ethics are socially determined moral principles that govern business activities. It is essential for businesses to prioritize ethics to build trust, maintain a positive reputation, and contribute to sustainable growth.

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

Discretionary Responsibility: This refers to the voluntary obligations that an enterprise assumes. E.g. Charitable contributions, providing relief during natural calamities etc.

Business ethics refers to the socially determined moral principles which should govern business activities.  Business ethics are important because it formulates the firm’s image and builds the brand, build confidence within employees and it influences the buying decision of the customers.

Air Pollution: Carbon monoxide emitted by automobiles, smoke and other chemicals from manufacture and pollutes the air & lowers its quality. It also created a hole in the ozone layer leading to global warming.

Business ethics refers to the socially determined moral principles which should govern business activities. By ethic we mean business practices which are desirable from the society point of view.