CAPITALISM is also called free market economy Capitalism can be defined as an economic system in which the major portion

of production and distribution in private hands , operating under what is termed a profit or market system

The existence of companies Profit motive Competition Freedom of enterprise Right of private property Class conflict(economic inequality) Importance of price system Sovereignty of the consumer.

Automatic working Higher effeciency and incentive to hard work Higher rate of capital formation Economic development and prosperity Optimum utilization of resource Just system Democratic

1. Inequality. 2. Capitalism breeds oligopolies. 3. Exploitation and alienation. 4. Wasteful competition. 5. Human welfare ignored 6. Economic instability and unemployment. 7. Property rights take precedence over human rights. 8. Malpractices.

9. Emergence of monopolies and concentration of economic power. 10.Social injustice and economic inequality.

Why Business must be socially responsible ?

Business receive inputs from society. It offers output( product and social service).

Product and activity must be beneficial &acceptable to the society. Business need society approval for function.

1. Growth responsability expectation

2. Long term orientation 3. Reputation of the company.

4.Give take relationship.

1. Optimum utillisation of scarce national resource. 2. Responsability not to make losses. 3. Improved quality of life. 4. Responsability of employment and income. 5. Offering quality products at fair price. 6. Environmental protection. 7. Fair trade practise.

8.Fulfill all national obligation under various national laws. 9. Safeguard the health and well being of consumers.

Moral obligation to use scarce resources

No waste misutlise or damage

Options must be carefully chosen (same resource many uses)

Loss making company cannot generate revenue

People & economy will suffer

Organisations have a social responsibility to make profit

Improved quality of work life of employees

Products & services can be targeted to improve the quality life.

Provision for fair wages

Satisfactory working conditions Steady employment Job security Growth & development of workers

Measures for employee welfare

Must be humane to all workers

Social responsability of business organisation

Social responsibility to protect environment

Planting trees Avoiding pollution

Maintaining greenery

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

Avoiding monopolistic practices Not leading the market into a price war Quality with their claims & expectations Easily available No black marketing Not making false or misleading claims Providing accurate & timely information Following the rules & regulations Paying taxes Not bribing public servants

11.Maintaining fair business policies

12. Not selling secondhand or used products as new 13.Not resorting to planned obsolescence 14.No espionage bribery so as to get trade secrets

Enough protection to uphold consumers health avoid damages by using products Eg:shampoo , medicines ,
Packaging & storaging conditions

Fulfill civic duties like avoiding pollution & keeping the environment clean Honestly paying all taxes
National interest for the country Try to reduce unemployment ,poverty etc

1. Cost
2. Effeciency 3. Relevance.

4. Scope and Complexity

Social responsibility costs money

Eg: to adopt a village , school .to build hospital,etc

Being obliged to the employees a company runs its plant even if it is running on losses every year.

Its efficiency goes down

According to critics business has no obligation to the society Only obligation is to run business successfully
Social responsibility is irrelevant

Society's problems are too massive ,too complex and too deep to be solved

Business Ethics in USA

US Department of commerce has issued model principles in 1995. Provision of safe and healthy workplace Fair employment practices Avoidance of child & forced labour Avoidance of discrimination Responsible environmental protection Promoting good business practices Maintaining a corporate culture

1. 2. 3. 4. 5. 6. 7.

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Many negative stereotypes of business ethics According to people business does not go with ethics
Both are contradictory terms None of the local companies have ethical codes

2.

3. 4.

5.
6. 7.

No business initiatives against corruption

White collar crimes is on the increase No business initiatives in the training of employees Favoritism ,Nepotism & personal connections affect decision making

8.

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2. 3.

Enterprise which recognises ethics is low

Few companies pay attention to moral side View in china is development of economy

4.
5.

They strive for beneficial economic results

Ethics in business is not urgent to them

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2. 3.

Competitive ability
Clear objectives Taking advantage of change

4.
5.

Simple organisation
Committed poeople

6.Openness
7.Responsibility 8.quality

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2. 3. 4. 5. 6.

Ensure customer satisfaction

Set high standards of ethics Foster creativity & innovation Avoid all discrimination Contribute to the benefit of the society Respect the dignity of each individual

The study and evaluation of decision making by businesses according to moral concepts and judgments.
Ethical questions range from practical, narrowly defined issues, such as a company's obligation to be honest with its customers, to broader social and philosophical questions, such as a company's responsibility to preserve the environment and protect employee rights.

Most people involved in businesswhether functioning as a small business owner, employee, or chief executive officer of a multinational companyeventually face ethical or moral dilemmas in the workplace.

Such dilemmas are usually complex

People involved in the world of business, however, often face situations in which advancementwhether in position, influence, or financial staturecan be gained, but only by hurting other individuals or groups.
Small business owners are confronted with these choices even more often than other people of the business world because of the greater degree of autonomy in decision making that they often enjoy.

Business people are likely to reach and act on morally appropriate decisions if they do not lose sight of the fundamental issue of fairness.

In recent years, the issue of business ethics has garnered increased attention.

Corporate research and watchdog groups such as the Ethics Resource Center and the Council on Economic Priorities point out that the number of corporations that engage in ethics training and initiate socially responsive programs has increased dramatically over the course of the past two decades,

Organizational pressures can further complicate ethics issues, especially for employees of larger firms.