Social Responsibility

and Business Ethics

Chapter 4
 Social Responsibility
 The awareness that business activities
have an impact on society, and the
consideration of that impact by firms in
decision making.

 Beside profit, engaged in activities that

benefit society
 Increase positive impact, reduce negative
impact
 Practicing Social Responsibility cost money
 However, failing has its costs-
 Fines
 Increased regulation
 Negative publicity
 Public dissatisfaction
 Loss of customer
 Questions to be considered
• To whom are we responsible?
• How far should we go to satisfy our customers and achieve
organizational objectives?
• Will our decisions affect any segments of society that we have not
considered
1. Consumers

Business
2. Employees 3. Environment
Activities

4. Investors
 Responsibility to Consumers
 Consumerism: Activities of individuals, groups, and
organizations aimed at protecting consumers rights.

 Industrial Revolution ( 1870-1900)

Historical Perspective

 Great Depression (1920 – 1930)

 Bill of Rights 1960
 The Right to Safety
 The Right to be Informed
 The Right to Choose
 The Right to be Heard
Responsibility to Employees
 Safety in the workplace
o Fire Prevention and Fire Fighting law 2003
o Occupational Health, Safety & Welfare of Bangladesh Labor
Law 2006
 Equality in Workplace
 The Hard-core Unemployed
Responsibility to the Environment
 Water Pollution
 Air Pollution
 Land Pollution

Bangladesh Environmental Conservation Act, 1995 (ECA)

Environment Court Act 2000

Responsibility to Investors
 Proper Management of Funds
 Access to Information
 Executive Compensation

Corporate Governance (CG)

Advance Social Responsibility
 Community Support
o Building parks, Schools, Hospitals…

 Self Regulation
o Establishing Standard of Conduct

 Social Audit
 Business Ethics
 Ethics: The principles of behavior that distinguish
between right and wrong

 Business Ethics: The evaluation of business

activities and behavior as right or wrong.

 Trust and Goodwill

 Factors Influencing Ethical Behavior

Business
Organization
Environment
Factors

•Pressure of business
environment Behavior •Peer influence
•Conflict of interest •Reward and Punishment
•International business

Personal
moral
philosophy
End of Chapter
Feb 23 2006- Fire at KTS Textile Industries (54 Killed)
February 24 2006 - Collapse of the Phoenix building
killing at least 16 people and injuring 45

April 2005 - Spectrum-Shahriyar factory collapses

killed 64 and injured 80, of which 54 seriously
 POISONED BURIGANGA

(Right) View from a sewerage line at Babubazar, under the second Buriganga bridge
Left) Toxic wastes pour into the river Buriganga from one of numerous outlets at Babubazar.