The term Business means “the state of keeping oneself busy”. Any person is said to be engaged in doing business if he/she is busy in doing something that is giving the returns termed as profit. The term “Business” is very vast and has different meanings for each and every individual, there are many forms of doing business. There is a term given to the amount that you invest in your business to make sure that the business is operating is “Capital”. The capital is the key determinant to the type of business entity is engaged in. if the capital is invested by only one person and he/she is enjoying the profits alone such type of business is called SOLE PROPRIETORSHIP. If the capital has been invested by two or more people and they are responsible for the profit-making and losses then such type of business is called PARTNERSHIP. If the capital is invested by a large number of people called upon for investing in a firm who is having a “Separate legal entity” from its owners and the owners are not responsible for the operations held they are to enjoy the profits and are called the Shareholders, such a type of organization is called COMPANY. The company can be profit making or non-profit making, it can be owned either by the government or a private group of people, and on the basis of this, a company is categorized into a public company, private company, a profitable organization and a non-profit organization, if there is a company who is doing all the work according to what a public or private company does but is having members instead of Shareholders then it is called Co-Operative, which is fundamental to the ideology of economic democracy (this is a philosophy that possesses the right of decision making from the cooperate managers to the corporate shareholders or a large group of public stakeholders). Today almost 200 million companies are registered all over the world.
Profit is the essence of business, really ??. Nowadays, it has been noticed that for new graduates the word “profit” has become a dirty word. The acceptable business model includes:
- Profit is a secondary concept.
- The revenue should be the percentage of the cost.
- Lower the price, higher the services.
- Positive feedback means growth and capturing potential customers.
And to ensure this the Business ethics have been introduced, it is the study of appropriate business policies and practices to avoid controversial subjects like corporate governance, insider trading, bribery, discrimination, and corporate social responsibility.
The companies are supposed to follow the business ethics, which means the company is expected to follow the set rules and code of conduct while doing the business, this not only ensure that work has been done properly in acceptable limits but also it enables to distinguish between the wrong and rights of the business. The main ethics are Loyalty, Fairness, Integrity, Compliance, and honesty. The business ethics are governed by a set body which aims at maintaining zero tolerance to any anti-social activity done by the businesses.
Role and importance of CSR:
Corporate Social Responsibility, it is the soul of business ethics. Corporate Social Responsibility is a management concept whereby companies unite social and environmental concerns in their business or in better words operations and interactions with their stakeholders. Corporate social responsibility is the way by which a company achieves Balance of economy, Social imperatives, and environmental imperatives by fulfilling the expectations of stakeholders on the other hand. The company can contribute towards the environment and at the same time can advertise its products. For example (1): the company aims to plant 1000 trees can take its employees to the ground in the same company named T-Shirts, or if on a low budget can put a company tag on every plant planted or on the planters, example (2): The company can conduct blood donation camps on a timely basis and for the purpose of propaganda the company can distribute personalized mugs (the name of the company).
Stakeholders have a keen connection with the CSR, before moving further it is important to understand the meaning of stakeholders. Stakeholders include:
- Owners of the Company
- Potential customers
- Present customers
- Suppliers of the company
- Potential suppliers of the company
- Government organizations
The idea of involving stakeholder in the company is something proven to be the most beneficial to the company. It is very important to maintain transparency to promote shareholder values, the reasoning is simple. If the shareholders will take part in the organization’s decision making then the stakeholders will be well known about what is going on with the corporate. This will result in increasing the trust of stakeholder and the idea that the company obligates to follow the CSR will definitely benefit the company in the long-term business survival.
Uses of CSR:
CSR can be an important tool for the expansion of the organization. CSR can help the organization in three ways.
1. Along with the Stakeholders the company can experience:
- Improved financial performance;
- Lower operating costs;
- Enhanced brand reputation and enhanced Image;
- Increase in sales;
- Enhanced Customer Loyalty;
- Great productivity and quality;
- Retain employees;
- Reduced regulatory oversight;
- Access to capital;
- Workforce diversity;
- Product safety;
- Decreased liability FOR THE ORGANISATION
2. CSR can be used to guard the environment.
- Greater material recyclability;
- Better durability and functionality of the product;
- Enhanced judicious use of renewable resources.
3. CSR can also be used to help the general public.
- Charitable contributions;
- Employee volunteer programs;
- Corporate involvement in education, employment;
- Contribution towards homeless.
- Ensuring product safety and quality standard are met.