Business Makers

Some people criticize the concept of social responsibility.� They put forward the following arguments to oppose the assumption of social responsibilities by businessmen.

Dilution of Business Goals: If a business firm involves it in social activities, its economic goals might get diluted. Its positing in the market place might be weakened.� As a result it may accomplish poorly in both its economic social goals. Society will lose when productivity of business declines.� The economic role of business in society would also become confused.

Lack of Social Skill: Generally businessmen lack the perception a skill required for effective handling of social problems.� Their outlook is primarily economic and they do not feel comfortable with social mattes.� Their mental make up is suited for handling business matters only.

Rise in Prices: Social involvement of business requires financial expenditure.� Unless the government or social institution bear the costs, business is likely to pass his cost on to consumers by increasing the prices of goods and services.

Lack of Accountability: A business enterprise is responsible mainly to its owners.� Involvement of business in social matters will give businessmen more owners.� As public has little control over them it swills be difficult to check miscue of this power.� If different sections of society are represented in the management of business to ensure accountability, decision-making process would become political and freedom of enterprise would be undermined.

Reeducation in Competitiveness: If business firms are asked to spend considerable money on social activities, their competitive position in international markets may go down.

Lack of Measurement: There are no clear-cut criteria to judge the social performance of a business enterprise.� Economic values are the only precise criteria to measure the performance of business.� Moreover, business corporations are not more agents.
The arguments given above suffer from tow limitations.� First, they require business firms to ignore social demands on them.� Business enterprises cannot afford to do so.� Business concerns are no longer mere economic institutions.� They are also social institutions. Businessmen are trustees of various social groups.� Secondly, these arguments overstress the power and influence, which businesses may exercise by assuming social responsibilities.

Pure and Speculative Risks Pure risks cause a loss and a businessman cannot make profit out of them.� These risks may arise form accident, fire, theft, strike, and others.� These are not inherent in business.� On the other hand, speculative risks are inherent in business and a person may either suffer a loss or earn a profit.� For example, change in demand may cause speculative risk.

Internal and External Risks Internal risks rise due to internal factors, e.g. breakdown of machinery, accident, etc.� Such risks can e minimized.� Risks arising from factors beyond the control of a firm are external risks.� Flood, earthquake, change in market conditions, government policies and others are causes of external risks.

Property and Personal Risks Damage or destruction of property are property risks. Injury or loss of life due to accidents, occupational diseases, etc. is personal risks.

Insurable and Non-Insurable Risks Insurable risks are hose which a can be insured it is possible to determine he probability of such risks.� No-insurable risks cannot be insured because their probability cannot be determined.

To decide whether a particular activity is an economic or a non-economic activity the following points should be considered:

The purpose of the activity is the most important ground for deciding whether an activity is economic or non-economic. The same activity may be economic for one purpose and non-economic for another purpose. The chief purpose of an economic activity is to generate income. For example when a lady cooks food for monetary gain it is an economic activity. But if the amen lady cooks food for hers family it is a non economic activity.

when the work done is measurable in terms of money it is an economic activity. For example services of a maid servant can be measured in terms of money and is therefore and economic activity. On the other had services of a housewife cannot no measured in terms of money and is therefore a no economic activity.

In the normal course of life a person desires to earn money in order to satisfy his wants. He seeks to obtain maximum return from his efforts. But work done for emotional reasons is non-economic activity. For example a business man wants to produce goods at the lowest possible cost to make maximum profit. On the other hand a person engaged in religious or social service is willing to spend bother his money and time.

Both economic and non-economic activities must be legal. Activities which are illegal though resulting in economic gain for example smuggling black-marketing robbery and others cannot bane called economic activities. Only those human activities can be called economic activities which are performed in accordance with the laws of the land. Even non-economic activities whether social or religious must conform to law.

A well known name automobile industry in India TATA motors chairman Ratan Tata said that they have good expectation in automobiles area in United Kingdom, in a likely recurrence of his significance in Land Rover and Jaguar. On the occasion of inauguration of Tata Corus plant at Netherlands.
While everyone expecting that he will not comment on the deal itself, “This process is on his path and it is practically private”. Tata motors have show interest in the ford’s Land Rover and Jaguar brands. According to expert opinion this deal will be worth more than USD 1.5 billion.
TATA motors great value in Indian automobile industry and now waving in wing by expanding and forwarding their steps toward global market. TATA earlier announced his 1 lakh car project in which they introducing a car worth Rs. 1 lakh. Let’s hope for the best as it will soon be on news.