Important Questions for CBSE Class 11 Business Studies Chapter 6 – Social Responsibilities of Business and Ethics

Important Questions Class 11 Business Studies Chapter 6 – Social Responsibilities of Business and Business Ethics

Due to its diversity, Business Studies is one of the most internationally studied courses in the world. Business studies is a broad subject in the social sciences that focuses on various disciplines such as accounting, finance, organisation, human resources management, and marketing. The sixth chapter of the Class 11  curriculum is Social Responsibilities of Business and Business Ethics; this chapter discusses various social responsibilities of business and business ethics. This chapter covers concepts such as the  need for Social Responsibility, identifying social responsibility towards different interest groups, concepts of business ethics and so on. Chapter 6 carries a significant amount of weightage in the examination. Students can easily access Chapter 6 Class 11 Business Studies Important Questions and much more once they register themselves on  the Extramarks website.

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Social Responsibility of Business Class 11 Questions and Answers

An extensive collection of Class 11 Business Studies Chapter 6 Important Questions has been created by subject matter experts  Extramarks business studies using references from various primary and secondary sources. These questions and their step-by-step solutions help students better comprehend all the topics covered in Class 11 Business Studies Chapter 6.

Given below are a few Important Questions from Class 11 Business Studies Chapter 6 and their solutions:

Q1. State the meaning of Corporate Social Responsibility as per the Companies Act 2013.

Answer. Corporate social responsibility refers to the obligation businesses have to play in achieving social development goals and maintaining a balance between environmental preservation, social advancement, and economic development.

The Companies Act’s section 135 governs CSR and applies to businesses that has:

• Yearly revenue of Rs. 1000 crore
• A net value of 500 billion rupees
• A 5-crore rupee net profit

Schedule VII covers eliminating gender disparity, eradicating hunger and poverty, and fostering a sustainable environment.

Q2. Briefly describe the idea of corporate social responsibility.

Answer. In today’s culture, business is acknowledged and regarded as a social and economic activity. To meet the requirements of society, the business operates within accepted social standards. Society provides the business with all the factors of production, including personnel, machinery, materials, money, and equipment, since the business’s life depends on society.

Society establishes, maintains, and administers its activities in the public interest. In other words, social responsibility is the company’s duty to many societal groups and profit-making.

Q3. What do you mean by social responsibility in business? How is it different from legal responsibility?

Answer. It refers to a corporate organization’s obligations and responsibilities to society and its constituents. Additionally, it demands that the business engages in several socially valuable actions. As a result of the constant exploitation of social resources by businesses, it is part of their duty to contribute to society’s advancement.

Legal obligations can only be fulfilled according to the law. Still, social responsibilities are more focused on improving society by creating work opportunities for women, the physically challenged, and the impoverished.

Q4. ‘Social responsibility is a burden on consumers’ Describe this claim.

Answer. Environmental protection and pollution prevention are costly social obligations that frequently require significant financial outlays. Businesspeople transfer the expense of doing their socially responsible job onto their customers by requesting higher prices.

Q5. Discuss the guidelines enumerated by the Companies Act 2013 for Corporate Social Responsibility.

Answer. Corporate social responsibility generally refers to a company’s duties and commitments to society. Businesses with:

• 1,000 crores or more in annual income,
• a net worth of at least 500 billion rupees, or
• 5 crore or more in net profit

The Companies Act, 2013, oversees corporate social responsibility in India (under Clause 135).

You may learn more about how the Companies Act of 2013 defines CSR by reading the following suggestions:

• A corporate social responsibility committee, made up of three or more board members, including at least one independent director, is required.
• Companies must invest 2% of their average net earnings over the preceding three fiscal years to follow the Corporate Social Responsibility Policy.
• Only CSR projects that are specified in a company’s corporate social responsibility policy—which is based on the recommendations of the corporate social responsibility committee—should be undertaken by businesses in India.
• A company shall adhere to the rules outlined in Schedule VII of the Act while conducting CSR-related activities.
• People will not consider CSR initiatives if they simply serve the interests of the company’s employees or their families.

Q6. Build up arguments for and against social responsibilities.

Answer. The following are arguments for social responsibilities:

• Self-enlightenment: As businesses gain more knowledge and awareness of their position as society’s creators, they are compelled to strive for the greater good. Public expectations are shaped by the voluntary moral and social responsibility norms that managers choose and uphold. Consequently, businesses take on social responsibility on their own rather than as a result of legislative interference.
• Survival in the long run: In the long term, a corporation and its reputation stand to gain the most when its primary goal is to “serve society.” A business gains when it fulfils its social responsibility. When a company achieves social objectives, it also boosts its reputation with the public.
• Safeguard stakeholders’ interests: Businesses must now go above  to satisfy their employees if they want their support. The customer does not purchase the thing that is being presented to them. They buy precisely what they want. Due to increased customer awareness, businesses must embrace social responsiveness toward their clients. Therefore, fulfilling social commitments contributes to a business’s long-term success.
• Limits governmental regulation: Government rules are undesirable because they limit one’s freedom. It is believed that business people may avoid the issue of governmental constraints by voluntarily performing social tasks, which will lessen the need for new laws.

Environmental contamination concerns are handled by organisations like the Central Pollution Control Board.

• Criticising the corporate community for societal issues: Businesses are responsible for creating or sustaining societal issues. Therefore, corporations have a moral duty to actively participate in finding solutions to these problems rather than ignoring them and hoping that other social organisations will take care of them.
• Resources: Large-scale resources available to business enterprises can be used to address societal issues partially. A company may help society handle its issues more effectively given the massive financial and human resources at its disposal. Businesses must operate in society’s best interests both economically and socially since they are a product of society.
• Transforming challenges into opportunity: By taking on the challenge, a business with a track record of effectively negotiating lucrative outcomes in trying circumstances can not only assist in mitigating societal issues but also successfully transform them into assets.

The following are arguments against social responsibilities:

• Consumers’ burden: Environmental protection and pollution control are expensive societal obligations that usually require significant financial outlays. Businesspeople frequently demand more excellent prices from their consumers rather than shouldering the responsibility of doing the right thing.
• Profit maximization: It is the only business goal, and it is violated. Any consideration of social responsibility is therefore incompatible with this objective. The most effective approach for the company to fulfill its social responsibility is to maximize profits through improved efficiency and reduced expenses.
• Widespread popular opposition: The public dislikes business involvement or social program interference. As a result of a lack of public trust and cooperation in resolving social concerns, a business cannot prosper.
• Lack of social skills: Businesspeople lack the necessary abilities and education to address social concerns. Social concerns should be handled by other specialist organisations instead.

Q7. Write a short note on the topic of CSR?

Answer. Every type of commercial firm must behave in a morally righteous way. However, corporate social responsibility (CSR) is a term employed explicitly concerning a firm. It may be summed up as earning financial success while upholding moral principles and considering other people, communities, and the environment. It entails resolving the demands placed on corporations by the law, morality, commerce, and other societal norms, including the requirement that they make choices and perform acts that fairly balance the interests of all stakeholders. Across the board, business operations, supply claims, and decision-making processes are linked with a complete set of CSR policies, practices, and initiatives.

Q8. What are the major areas of social responsibility of business?

Answer. An entity, whether an organisation or an individual, must act in society’s interests according to the ethical paradigm of social responsibility. Everyone has to fulfil this to preserve a balance between the economy and ecosystems.

The following are some of the central business social responsibility initiatives:

• Legal responsibility: Every company is required by law to abide by the nation’s laws. A company is socially responsible if it complies with all applicable rules and regulations.
• Economic responsibility: The economic duty of a company enterprise, or the responsibility to provide goods and services that society wants and sell for a profit, is its primary social responsibility.
• Discretionary responsibility: Discretionary responsibility implies that the firm must safeguard the capital invested by abstaining from speculative behaviour such as gifts to charities, etc. and should engage only in profitable commercial ventures. 
• Ethical responsibility: Referred to as socially acceptable conduct that is not protected by law. Some volunteer help is needed for this project.

Q9. What is the environment? What is environmental pollution?

Answer. The biotic and abiotic resources within and around us make up the environment. It affects the way we live. However, due to industrialisation and rapid population development, resources have been utilised to the point of depletion or deterioration. Additionally, the region has been polluted because of toxic discharge into the ecosystem.

Pollution comes in 4 different forms:

• The dumping of hazardous wastes into the earth pollutes the environment and renders the land unsuitable for agricultural use, leading to land pollution.
• Health issues, including hearing loss and mental illnesses, are brought on by noise pollution from industry and traffic.
• Industrial waste that is released through a pipe causes water pollution.
• Burning waste materials and vehicle exhaust fumes that emit dangerous gases into the environment are two factors that contribute to air pollution.

Q10. Describe how the labour movement has helped businesses in upholding their social obligations.

Answer. The labour movement has grown significantly in strength to secure benefits for the working class globally. Due to this, companies are now required to think about the well-being of their workers rather than using a “hire and fire” strategy.

Q11. Explain the various elements of business ethics.

Answer. A few elements of business ethics are:

• Top-tier managers, such as the CEO of a company, should carefully adhere to the ethical standards and mentor others to do the same.
• The code of conduct, which contains regulations about workplace safety, health, and other matters, must be retained in the form of written papers known as “code.”
• It is essential to have appropriate compliance systems that guarantee choices and the accompanying actions adhere to the firm’s ethical standards.
• The business must track whether its ethics programmes adhere to moral norms, evaluate their outcomes, and determine what course of action is necessary.
• Since workers are the ones who put ethical rules into practice, employees should be included in all levels of ethics programmes.

Q12. Discuss the forces responsible for increasing the concern of business enterprises toward social responsibility.

Answer. The following factors influence how much corporate firms care about their social responsibility:

Labour movement pressure:

• The labour movement has strengthened globally to secure benefits for the working class.
• Due to this, companies are now required to think about the well-being of their workers rather than following a “hire and fire” philosophy.

Effect of consumer awareness:

• The consumer is increasingly aware of his rights and abilities to influence market dynamics because of improvements in education and mass media and greater market competition.
• Businesses are starting to adopt a customer-centric strategy now that the consumer is king.

The threat of public regulation:

• Actions are made to regulate businesses that conduct themselves in a socially irresponsible way to protect the general public’s interests.
• The fear of government regulation is one of the critical causes of why corporations are worried about social responsibility.

Establishment of social standards for business:

• The economic activity of corporate enterprises is now recognised by new social criteria, but only if it also meets social needs.
• It is impossible to operate a business without interacting with the outside world.

The connection between business and social interest:

• Business firms claim that social and commercial objectives are no longer incompatible. They complement one another well.
• Providing high-quality service to society is how businesses may gain in the long run.

The emergence of the managerial and professional classes:

• A unique class of professionals has been created due to professional management education at universities and specialised management institutes.
• When successfully operating their enterprises, professional managers are more concerned with gratifying a range of social interest groups than only hitting profit objectives.

Improving business education:

• Public awareness of the company’s social mission has expanded with the expansion of business education and its substantial social responsibility element.

Q13. Why do enterprises need to adopt pollution control measures?

Answer.   A corporate company must undertake pollution control measures for the following reasons:

• Environmental pollutants contribute to many consequences, including cancer, kidney and lung damage, respiratory illnesses, and cancer. A healthy environment on earth can be achieved through reducing or controlling pollution.
• Organisations can install pollution control equipment in their buildings to stop the harm that gases and solid wastes create.
• Utilising outmoded production methods generates excessive waste, harming the environment and people. As a result, newer, cleaner methods should be employed.
• An organization is regarded as a socially responsible business if it has an effective pollution control strategy in place.
• Effective pollution control methods also lower a company’s operational expenses while preserving the environment.

Q14. Briefly explain (a) Air Pollution, (b) Water Pollution, and ( c) Land Pollution.

Answer. The terms are briefly explained below:

1. Air Pollution: Carbon monoxide emissions from autos, smoke, and other chemical emissions from manufacturing enterprises are the leading causes of air pollution. The pollution has caused a hole in the ozone layer, leading to significant global warming.
2. Water Pollution: The major causes of water pollution are chemicals, industrial waste, and rubbish dumping. It has claimed the lives of several animals and seriously endangers human life.
3. Land Pollution: When hazardous trash is placed on land, pollution occurs. This lowers the quality of the land, making it unsuitable for farming or planting.

Q15. Explain Discretionary responsibility?

Answer. Discretionary responsibility refers to the voluntary obligations met by the company.

Q16. What steps can an enterprise take to protect the environment from the dangers of pollution?

Answer. The actions that business enterprises may implement for environmental protection are:

• They are obeying the government’s laws and guidelines to prevent pollution.
• Taking part in government initiatives to plant trees, manage toxic chemicals, clean up filthy rivers, and avoid deforestation.
• Ensuring that all divisions and workers share the company’s commitment to environmental preservation.
• Creating specified plans and programmes for sourcing high-quality raw materials, employing innovative technology, implementing scientific waste disposal and treatment techniques, and developing staff skills to prevent pollution.
• A clear commitment from the company’s senior management to build, maintain and grow a work culture that fosters environmental protection and pollution prevention.
• Periodic review of pollution control initiatives regarding costs and benefits to enhance environmental protection efforts.
• Organising educational seminars and training materials to share technical knowledge and expertise with suppliers, dealers, and customers to involve them in pollution control activities.

Q17. What is business ethics? Mention the essential elements of business ethics.

Answer. Corporate ethics deals with values and rules controlling the behaviour of a person or an organisation and business actions that are viewed as pleasant from the societal standpoint. It aids managers and other workers in completing their jobs in a manner regarded as socially acceptable.

Elements of Business ethics include:

• Top management’s commitment
• Establishment of a “code.”
• Setting up a compliance system.
• Including staff members at all levels.
• Monitoring outcomes

Q18. Describe the idea of “Human Rights.” Mention any human rights cases as well.

Answer. In the interests of each person, human rights guarantee equality. Human rights essentially served as a justification for action, protection, and support. Human rights emphasise the idea of humanity. All significant corporations ought to support and uphold human rights.

Cases for human rights- In our culture, human rights are highly valued. Numerous movements have also emerged to get these rights.

The following arguments are in favour of human rights in society generally and specifically in business:

• Protection against human injustice: Businessmen typically don’t uphold governmental norms and set their own social and economic standards. Human rights are brought to light when individuals believe that injustice is being sustained.
• Respecting human values: Some human rights are seen as being fundamental. These rights are of more importance than other human rights and legal rights and give entitlements outside the purview of legal authority, and others should respect them.
• Provides benchmarks for law and land policies: Following independence, a few fundamental rights emerged that operate independently of all laws and policies. These rights are more important than any laws or norms a community may have established.

Human rights and legal rights are very different from one another. There may be a legal justification for doing anything cruel, but there is no justification for committing any act of humanity. Human rights are derived independently, whereas legal rights are derived from the constitution and policies. Human standards are the foundation of human rights. Independent of any specific legal system, a set of human norms can serve as the foundation for human rights entitlement. These rights forbid engaging in cruel behaviour.

The United Nations declares the following as Human Rights:

• Right to form and join trade unions.
• The right to work, free choice of employment, good working conditions, and right of protection against unemployment.
• Reasonable limits on working hours and periodic holidays with pay.
• Right of just or favourable remuneration.

Q19. ‘Business is essentially a social institution and not merely a profit-making activity. Explain?

Answer. Profit maximisation is a business’s primary goal. However, businesses are not solely for-profit entities. Because they were developed by society to meet the need for products, every firm uses both human and societal resources. Such social issues like unemployment and poverty influence businesses as well. Socially acceptable actions that enhance society’s image include generating employment and providing a healthy work environment, paying taxes, reducing pollution, and attending to consumer concerns. Here are a few instances that demonstrate how business is a social institution.

On the other hand, it is said that business enterprises are more than just profit-making entities for the following reasons:

• They are seen as social institutions since society plays a role in a company’s success.
• Waste of time, money, and labour should be kept to a minimum since every firm uses society’s physical and human capital.
• Since a business cannot function without customers, purchasing its goods and services depends on them. To do business effectively, it must keep a positive connection with its customers.

Considering this, businesses must give back to society. As a result, we talk of a corporate enterprise as a social institution instead of a for-profit business.

Q20. Why are businesses accountable for protecting the environment?

 Answer. The environment is defined as the entirety of a person’s surroundings, including natural and artificial elements. Resources that are advantageous to human life are also present in these settings. Resources include both natural and artificial things. Natural resources include land, water, air, flora and fauna, and raw materials. Artificial resources include things like cultural heritage, socioeconomic institutions, and people.

Discharging hazardous substances into the environment is known as pollution, and industrial activities mostly bring it on. As the environment can only absorb so many pollutants, pollution alters air, land, and water’s physical, chemical, and biological aspects. Hazardous pollutants include toxic wastes, poisonous byproducts, and substances with harmful properties that the environment cannot metabolise. As a result, pollution puts human health, natural resources, and environmental quality at peril.

A company needs many environmental resources to operate, including raw materials, timber, air, and water. Therefore, it is only fitting that the company gives something back to society and the environment by safeguarding, preserving, and conserving it.

A business is accountable for creating, sustaining, and expanding a workplace culture that supports environmental preservation and pollution prevention through the dedication of the company’s senior management.

The above-stated section of Important Questions Class 11 Business Studies Chapter 6 is a list of Important Questions covering the entire chapter.

Key Topics Covered in Important Questions Class 11 Business Studies Chapter 6

Social Responsibility

People in business have a duty to the community known as social responsibility. Businesspeople need to consider how their choices and activities may affect the other facets of society.

Need for Social Responsibilities

Due to the following reasons, business people are expected to fulfil their social obligations:

• Commitment to societal problems
• Resources used for moral justification
• Social influence
• Avoiding the involvement of government
• Public image
• Better environment for business
• Personal gain

The case against Social Responsibility

Some academics have criticised the idea of social responsibility; a few of the arguments presented below are against social responsibility:

• The motive of earning profit.
• Social skills deficit.
• It costs money to be socially responsible.
• Diluted main business objective.
• Business People lack morality.
• Decreased competitiveness

The reality of Social Responsibility

We may infer that business is not just an economic institution but also a social institution. Business people are the trustees of various social groups after understanding the arguments in favour of and against social obligations.

The fundamental causes and influences that have compelled businesspeople to think about their obligations to society are:

• The threat of government regulation
• Labour movement pressure
• Effect of consumer awareness
• Creation of social norms for business
• Social and commercial interests are related to one another.
• Growth of the professional-managerial class

Kinds of Social Responsibility

• Ethical Responsibility: While acting ethically, business people should refrain from engaging in adulteration, black marketing, etc. Ethics are much more than the law.
• Economic Responsibility: Businesses must provide things and services that society needs and values and sell them for a profit to fulfil their economic responsibilities.
• Discretionary Responsibility: This obligation is entirely optional. This involves charitable giving. Helping those impacted by floods, earthquakes, etc., by participating in social service programmes, establishing educational and training facilities, etc.
• Legal Responsibility: Every firm is expected to operate within our society’s legal framework. A business that follows the law is viewed as socially responsible and receives no interference from the government.

Social responsibility towards different interest groups

Responsibilities towards Consumers:

• Production of certain products while upholding quality requirements.
• Being sincere in marketing.
• Should adhere to fair trade principles.

Responsibilities towards Employees:

• Provide perks and remuneration that are just.
• Establishing favourable and secure working circumstances.
• To provide them with opportunities to take part in the decision-making

Responsibilities towards the Owners/Shareholders/Investors:

• To guarantee investment safety.
• To guarantee a just and consistent return on investment.
• To guarantee investment growth through efficient resource use.

Responsibilities towards Government:

• To follow the law, rules, and regulations.
• Must promptly pay all taxes and fees.
• To assist in resolving social issues.

Responsibilities towards the community:

• To defend the environment from contamination of all kinds.
• To increase the number of work options.
• To support society’s less fortunate groups.

Responsibilities towards Suppliers:

• To make sure that the provider is regularly paid.
• To conduct fair business with suppliers.
• By placing orders with them to defend and support small-scale suppliers.

Business and Environment protection

Causes of Environmental Pollution

The following factors contribute to environmental pollution:

• Land pollution
• Air pollution
• Water pollution

Need for Pollution Control

The following are the primary causes for pollution control:

• To guarantee safety
• To preserve the beauty of nature
• Economic losses
• To guarantee a healthy life
• To lead a comfortable life

Role of Business in Environmental Protection

Business people should take the following actions to control and check environmental pollution:

• Using environmentally sustainable production methods.
• Industrial waste recycling.
• We are using technology to treat garbage before dumping it on land or releasing it into the sea.
• Utilise eco-marks by making environmentally beneficial items.

Business Ethics

It refers to the collection of moral principles that guide a businessperson’s actions. What is good and wrong are defined by ethics.

Elements of Business Ethics

The following are some fundamental principles of conducting business ethically:

• The construction of a compliance system
• Publication of a ‘code.’
• Engaging workers at all levels
• Top management commitment
• Result measurement

In the above section of Important Questions Class 11 Business Studies Chapter 6, all the critical topics covered have been discussed.

Benefits of Solving Business Studies Class 11 Chapter 6 Important Questions

As mentioned earlier, Business Studies is a subject that requires constant reading and revising of each chapter on a regular basis. Its fundamentals are introduced in Class 11 with a more detailed explanation in Class 12. Class 11 students are advised to go through Extramarks Important Questions Class 11 Business Studies Chapter 6. These critical questions make comprehension much easier for the students. 

  Following are some benefits of solving Important Questions Class 11 Business Studies Chapter 6: 

• Business Studies comprises a vast syllabus —all the intricacies of the chapters are adequately explained  through  these crucial questions by Extramarks. Students and teachers have unshakable trust and faith in Extramarks resources.
• Important Questions Class 11 Business Studies Chapter 6 covers the concepts of the entire chapter- Social Responsibilities of Business and Business Ethics. These questions are prepared by subject matter experts who provide systematic and well-laid-out balanced study plans that boost their performance naturally and effortlessly.
•  Important Questions are curated keeping in mind all the guidelines laid by CBSE, so that students can study independently without any further assistance.

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