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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

    ...

    ________

    ------------

    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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