Introduction

A story that sets the stage

• Mani, a young newspaper reporter, had spent almost six months writing about malpractices by business enterprises — misleading advertisements, adulterated products, poor working conditions, environmental pollution, bribing government officials, and more. It left him believing that business people would do almost anything to make money.
• Then he interviewed Mr Raman Jhunjhunwala, chairman of a leading truck-manufacturing company known for its fair dealing with customers, employees, investors and other social groups. The interview changed Mani's thinking: he came to understand that a business enterprise can be socially responsible and ethically upright, and still be highly profitable. That realisation is what sent him off to study social responsibility and business ethics in more depth — the same subject this chapter now takes up.

A business enterprise should not only do business and earn money, but should do so in ways that meet the expectations of the society it operates in. Just as every individual living in society carries certain obligations — to respect social values and accepted norms of behaviour — a business enterprise too owes something back to the society that permits it to function.

• The permission-and-obligation balance: Society allows a business to carry on industrial or commercial activity and to earn profits from it. In return, the enterprise is obliged not to do anything that society considers undesirable.
• Socially undesirable practices — actions that may raise an enterprise's profit but harm society at large. Examples given in the book:
  • Manufacturing and selling adulterated goods.
  • Making deceptive (misleading) advertisements.
  • Not paying taxes that are due.
  • Polluting the environment.
  • Exploiting workers.
• Socially desirable practices — actions that both improve an enterprise's image and, over time, make it more profitable:
  • Supplying good-quality goods.
  • Creating healthy working conditions.
  • Honestly paying taxes.
  • Installing pollution-control devices in the factory.
  • Sincerely attending to customer complaints.

The key idea: durable, lasting success comes to a business through socially responsible and ethically upright behaviour — not through practices that profit the firm while damaging society.