Social Responsibilities of Business and Business Ethics
What is Social Responsibilities of Business and Business Ethics Class 11: Definition & Concepts
By ConceptScroll Team · Published on 18 June 2026 · 4 min read
What is Social Responsibilities of Business and Business Ethics class 11? It refers to the duties businesses owe to society and the ethical principles guiding their operations. This chapter in NCERT Business Studies helps students understand how businesses balance profit-making with social welfare.
Definition of Social Responsibilities of Business
Social Responsibilities of Business means the obligations a business has towards society beyond making profits. It involves acting in ways that benefit the community, environment, employees, customers, and other stakeholders.
In Class 11 NCERT Business Studies, social responsibility is defined as the duty of business to contribute to the welfare of society while conducting its operations. It ensures businesses do not harm society and actively support social development.
Key points:
Businesses impact society and must act responsibly.
Social responsibilities go beyond legal requirements.
Includes environmental protection, fair labour practices, and community development.
Example: A company reducing pollution from its factories shows social responsibility.
Understanding Business Ethics in Class 11
Business Ethics refers to the moral principles and values that guide the behaviour of individuals and organisations in business activities. It ensures businesses operate honestly, fairly, and with integrity.
In the NCERT Class 11 syllabus, business ethics is taught as a framework that helps businesses decide what is right and wrong in their dealings with customers, employees, suppliers, and society.
Characteristics of Business Ethics:
Voluntary and self-regulatory
Based on moral values like honesty, fairness, and transparency
Helps build trust and reputation
For example, a business refusing to sell defective products follows business ethics.
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Types of Social Responsibilities of Business
Social responsibilities of business can be broadly classified into four types:
Type
Description
Economic Responsibility
To produce goods and services profitably and efficiently
Legal Responsibility
To obey laws and regulations set by the government
Ethical Responsibility
To do what is right, fair, and just beyond legal duties
Philanthropic Responsibility
To contribute voluntarily to social causes and welfare
Businesses must fulfil all these responsibilities to maintain a balance between earning profits and contributing to society.
Example:
Paying taxes (legal)
Avoiding pollution (ethical)
Donating to charity (philanthropic)
Importance of Social Responsibilities and Business Ethics
Understanding social responsibilities and business ethics is crucial for several reasons:
Builds Goodwill: Ethical behaviour and social contributions improve a company’s image.
Ensures Long-term Success: Responsible businesses attract loyal customers and employees.
Avoids Legal Issues: Following laws and ethical norms prevents penalties.
Promotes Sustainable Development: Helps conserve resources and protect the environment.
Enhances Stakeholder Relationships: Trustworthy businesses maintain better relations with society, government, and investors.
For Class 11 students, recognising this importance helps understand how businesses impact society positively.
Difference Between Social Responsibility and Business Ethics
Though related, social responsibility and business ethics have distinct meanings. The table below compares them:
Aspect
Social Responsibility
Business Ethics
Definition
Duties of business towards society
Moral principles guiding business behaviour
Focus
Impact of business on society
Conduct of individuals and organisations
Nature
Broader concept including legal and philanthropic
Focused on morality and fairness
Example
Environment protection, charity donations
Honesty in advertising, fair treatment of staff
Both concepts guide businesses to operate responsibly and ethically.
Examples of Social Responsibilities and Ethical Practices
Here are some practical examples of social responsibilities and business ethics:
Environmental Protection: Using eco-friendly materials and reducing waste.
Fair Labour Practices: Providing safe working conditions and fair wages.
Honest Advertising: Avoiding false claims about products.
Community Development: Supporting education and health initiatives.
Corporate Governance: Transparent financial reporting and accountability.
Worked Example: A company spends ₹10 lakh on CSR activities and earns ₹2 crore profit. The percentage of profit spent on social responsibility is:
This shows the company’s commitment to social welfare.
Frequently asked questions
What is the main purpose of social responsibilities of business?
The main purpose is to ensure businesses contribute positively to society beyond earning profits.
How does business ethics help companies?
Business ethics guide companies to act honestly and fairly, building trust and reputation.
Are social responsibilities mandatory for businesses?
Some responsibilities like legal duties are mandatory, while ethical and philanthropic duties are voluntary.
Can a business be profitable and socially responsible at the same time?
Yes, responsible businesses balance profit-making with social welfare for long-term success.
What are examples of ethical business practices?
Examples include honest advertising, fair treatment of employees, and respecting customer privacy.
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