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SOCIAL
RESPONSIBILITY
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INTRODUCTION
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CONCEPT OF
SOCIALRESPONCIBILITY.
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TWO VIEWS OF SOCIAL
RESPONSIBILITY The classical view.
The socio economic view.
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NEED FOR SOCIAL
RESPONSIBILITY IN BUSINESS1. TO FULFILL LONGRUN SELF -INTERESTe.g.ONGC
2. TO AVOID MISUSE OF NATIONAL RESOURCES AND
ECONOMIC POWER.e.g. reliance and Hindustan sanitary ware.
3. TO MINIMISE ENVIRONMENTAL DAMAGE.
e.g. BHEL
4. THE IRON LAWOF RESPONCIBILITY.
e.g. medical companies.
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5. TO ESTABLISH A BETTER PUBLIC IMAGE.
e.g. P&G.
6. TO AVOID GOVRNMENTREGULATION ANDCONTROL.e.g. pollution.
7. TO AVOID CLASS CONFLICTS.
e.g. training.
8. SURVIVAL AND GROWTH.
e.g. Indian oil corporation.
NEED FOR SOCIAL RESPONSIBILITY
IN BUSINESS (cont)
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9. TOCONVERTRESISTANCE INTO
RESOURCES.
10. CONSUMER AWARENESS
NEED FOR SOCIAL RESPONSIBILITY
IN BUSINESS (cont)
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Arguments For And Against
Social Responsibility.
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Argument For Social Responsibility.
Public Expectation
Ethical Obligation
Public Image
Balance ofResponsibility And Power
Stockholder Interest
Possession ofResources
Superiority of prevention over cures
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Argument Against social
Responsibility. Violation of Profit Maximization
Too Much Power
Lack of Skills Costs
Luck of Accountability
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SOCIAL
RESPONSIBILITIES
TOWARDSDIFFERENT
SECTIONS
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TOWARDS OWNERS
1. Run the business efficiently.
2. Proper utilization of capital & other resources.
3. Growth & appreciation of capital.
4. Regular & fair return on capital invested.
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TOWARDS INVESTOR /
SHAREHOLDERS1. Ensuring safety on their investment.
2. Regular payment of interest.
3. Timely repayment of principal amount.
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TOWARDS EMPLOYEES
1. Timely and regular payment of wages and salaries.
2. Proper working conditions and welfare amenities.
3. Opportunity for better career prospects.
4. Job security as well as social security like facilities
of provident fund, group.
5. insurance, pension, retirement benefits, etc.
6.
Better living conditions like housing, transport,canteen, crches etc.
7. Timely training and development.
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TOWARDS SOCIETY
1. To help the weaker and backward sections of thesociety.
2. To preserve and promote social and culturalvalues.
3. To generate employment.4. To protect the environment.
5. To conserve natural resources and wildlife.
6. To promote sports and culture.
7. To provide assistance in the field of developmentalresearch on education, medical.
8. Science, technology etc.
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TOWARDS CUSTOMER
1. Should be charged a fair and reasonable
price.
2. Supply of goods and services should be of
reasonable quality.
3. Business should not indulge in profiteering,
hoarding or creating artificial scarcity.
4. Business should not mislead the customersby false, misleading and exaggerated
advertisement.
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TOWARDS SUPPLIERS
1. Business should create healthy and cooperative
inter business relationship between different
business.
2. Business should provide accurate and relevantinformation to creditors and suppliers.
3. Payments of price of materials, interest on
borrowings, other charges should be prompt.
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TOWARDS GOVERNMENT
1. Business should be law abiding citizen.
2. Business should pay taxes and other duties fully,
timely and honestly.
3. It should not corrupt public servants anddemocratic process.
4. It should not buy political favour by any means.
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TOWARDS COMPETITORS
1. Foster open markets for trade and investment.
2. Promote competitive behavior among competitors.
3. Refrain from seeking favors to secure competitive
advantage.
4. Respect both tangible and intellectual property
rights.
5. Refuse to acquire commercial information by
dishonest or unethical means.
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SOCIAL AUDIT
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DEFINITION OF S.A
Audit is a process in which the details of theresources, financial and non-financial, used by thepublic agencies for the development initiatives, are
shared with the people, often through a publicplatform. It allows people to enforce transparencyand accountability Social, thereby providing theultimate users an opportunity to scrutinize the
development initiatives.
By, Prof.Ranjan Mohpatra
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What is Social Auditing ?
SA is a management tool and accountability mechanismwhich can enhance an organizations capacity to:
Evaluate their impact on stakeholders
Determine how well they are living up to the values theyespouse.
Improve their strategic planning process by identifyingpotential problems before they come up; and
Increase their accountability to the groups they serve and
depend on.
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Purpose of Social Audit
The purpose of conducting Social Audit is not to find
fault with the individual functionaries but to assess
the performance in terms of social, environmental
and community goals of the organization. It is a way of measuring the extent to which an
organization lives up to the shared values and
objectives it has committed itself to.
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6 Reasons to conduct a SA
Know what is happening
Understand what people think and want
Tell people what you are achieving Strengthen loyalty / commitment
Enhance decision-making
Improve overall performance
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Implementation of social audit
The six steps of Social Auditing are:
1. Preparatory activities
2. Defining audit boundaries and identifying stakeholders
3. Social accounting and book keeping
4. Preparing and using social accounts
5. Social audit and dissemination
6. Feedback and institutionalization of social audit
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Situation Without Social Audit
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Situation With Social Audit
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Social Audits: Conclusion
Social auditing is a process of measuring and
reporting, in order to understand and ultimately
improve, an organizations social performance.
Mission Related
Managerial Issues Accountability Issues
Benefits
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Definition of Social Accounting
Evaluating and Reporting those
information which are affect on social life and
it is related to some person and its activity
By : Richard Dobbins and David fanning
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PURPOSE OF SOCIAL ACCOUNTING
Convert Conventional Accounting in particular
Financial Accounting
Pursuit of social and environmental objectives
Management control purpose
Accountability purpose
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ABC INDIA Ltd.Social Income Statement
1. Social Benefits and Costs of staff
Particular Rs.
A. Social Benefit of staff :1.Educational facilities
2. Housing & Township facilities3. Transport4. Medical and Hospital facilities5.Holiday Benefits6.Provident Fund, Gratuity and Pension
7.Training to Staff8.Intrest Concession9.Other Benefits
Total (A) B. Social Cost of staff :
1.Public services & facilities use 2.Product quality deterioration3.lack of employment acquired
4.Other Total (B)
Net social Benefits to Staff (A-B)
....
..
..
..
.
.
..
..
...
___________
__________
......................
.
.
.
.___________
___________
___________
___________
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2. Social Benefit and Cost to Community
A. Social Benefit of Community :
1.Local taxes paid to panchayat/municipality
2.Social welfare of community
3.Environmental improvement
4.Generation of job potential
5.Generation of Business
Total Benefits to Community :
B. Social Cost of community :
1. Increase in cost of living in the vicinity onaccount of companys operations
Net Benefit of Community
...
..
..
___________
___________
.___________
___________
___________
___________
Particular Rs.
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3. Social Benefits and Costs to General Public
Particular Rs.
A. Social Benefits to General Publics :
1.Taxes Pay to State Government
2.Taxes Pay to Central Government3.Other benefits to General Public
Total Benefits to General Publics :
B. Social Cost to General publics :
1.Uses of State Services- Electricity
2.Uses of Central Government services :Telephone, Telegram, Banking
Other
Total Cost to general publics :
Net Income to General public (A-B)
NET PROFIT OF ALL 3 SECTOR (1+2+3)
.....
..
.
_________
_________
..
....
..
_________
_________
_________
_________
_________
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FORMATOF SOCIAL ACCOUNTING USED BY SOME
PUBLIC FIRM IN INDIA
LIBILITIES Rs. ASSETS Rs.
Organization fund
Social equity
Contribution by staff
...
________
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Social capital investment
Township Land
Buildings
Canteen Buildings
Township Water Supply
and SewerageTownship Roads
Township electrification
Other Social Assets
Hospital Equipment
School Equipment
Club Equipment
Play Ground/ParksSchool Buses
Other
Human Assets
..
..
..
...
..
...
..
...
....
________
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