The Importance of Ethics and Social Responsibilities of Business Organization

The Importance of Ethics and Social Responsibilities of Business Organization

Social Responsibilities of Business Organization – The main reason for writing on this topic is to bring to the fore and indeed highlight the importance of business organization being alive to their ethical and social responsibilities to the society. This is often neglected by some organization and hence it is always a subject of litigation and / or agitation between various communities and business organization. Quite often the government intervenes when it is going out of law.

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This chapter therefore reviews literature relating to the theme and sub-theme of this study. Major ideas of this section are grouped and presented under the following sub – headings.

2.1) The changing social roles of business organizations.

2.2) Reason for growing roles of social responsibilities.

2.3) Government laws

2.4) Government involvement in social responsibility and ethics.

2.5) Summary of the related reviewed literature

2.6) Reference

The Changing Social Roles of Business Organization

A business is constantly changing and is surrounded by thousands of its environment in two ways.

1)    It can change the environment

2)    It can adjust to the environment

This statement means that business organization are faced by dynamic social roles that either enables them change their environment or adjust its strategies to conform to the dictates of their environmental factors are affecting its pro in order to remain profitable. A good organization therefore knows what its objectives are and knows which environmental factors are affecting its progress. Social roles, which enable them and adapt and shape their environments so that they can become and remain viable.

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Another important view (Hicks and Gillet 1981) is that business must play an active social role in the society in which it functions. Many businesses are large and powerful economically, that their decision and policies have vital impacts on society. The more the changes in economic growth of business the more society expects from that organization. The equation should always balance. Therefore any business organization that wishes to hold on its powers must be sure that it is exercising an equivalent amount of changing social roles to the society.

Reasons for the Growing Roles of Social Responsibilities

According to Davis and Robert (1980) reason for the growing role s of social responsibilities are:

1)    The changing needs of people: Business has done a generally good job of meeting separated economic need in society. Now social expectation must be met as well.

2)    The changing roles of management: As the ownership and management of business have been separated, manager have come to see owners as one of the groups they must serve.

3)    The changing business and economic system : Many firms have grown large and powerful in our society.  Perfect competitions as described by Adam Smith two centuries is not an accurate models of today’s economic system since an increase in economic powers means an increase in social responsibilities to the society.

4)    The changing society: Modern society s much more interdependent than if once was.  Action of business can influence life style of large segments of society. This means business can influence employees satisfaction, availability of goods and services to customers, the economic health of the nation and the quality of our environment. Society not only expect economic performance from forms they also expect performance. With the emergence of special interest groups in the society pressing their demands upon business, this has led to the changing social roles of business organization.

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Government Laws:

Government laws in Nigeria are meant to protest infant companies and also to make them ethically, and socially moral. Any violations of these laws attract the price of closure or award of damages. The company acts in Nigeria – Company and Allied matters decree 1986 (CAMD1990) are government rules governing legislation has been passed in a number of areas requiring business and other organization to fulfill certain social responsibilities. Such as regulations concerning fair employment practices, pollution control, job safety, performing persons reformations and environmental development and protection. Therefore governmental business organization live up to the expectations of being ethical and socially responsible to the society they operate and do business with. It is advisable for business organizations who want to continue in business to obey government law concerning them. As government is ready to punish any defaulting business entity. And no business is set up to run at a loss or be a victim of law or government. make profit and for continuous existence, they should not forget their responsibilities to the government, people, society, environment and the country as a whole.

Government Involvement in Social Responsibility and Ethics

The main reason for the involvement of government in social and ethical responsibilities is to make sure that businessmen and their organizations are morally inclined in their understanding in many ways. Therefore is the duty of government to be involved in whatever a business organization does. How does government get become involved in social responsibilities? It is through the establishment of law, making sure that firms and business organizations follow such laws. It is a widely held view that the government should make it clear to business companies the areas of responsibilities the public expects from them. For example, for a manufacturing company the public expects that the industrial waste should be disposed of in hygienic way that will not cause harm to anybody. For an oil company, the public expects that its rivers should not be polluted and so on. If government could define and lay down rules in specific terms to companies to abide by it will make problem less. This also entails business organizations set up a board that should take care of issues concerning ethics and social responsibilities, with a manager as head who know little about environmental sciences and social sciences.

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