Chapter social-responsibilities-of-business-and-business-ethics: Social Responsibilities of Business and Business Ethics Case Study Questions | business studies Class 11 CBSE

Chapter social-responsibilities-of-business-and-business-ethics: Social Responsibilities of Business and Business Ethics Case Study Questions | business studies Class 11 CBSE | ByteNotes.in

Case Study

Passage with linked questions

Case Set

Case Set 1

Case Analysis

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GreenLeaf Pvt. Ltd. is a mid-sized consumer goods company operating in an urban industrial area. Recently, the management noticed that its chemical waste was being discharged into a nearby river, affecting the health of local villagers who depend on it for drinking water. The CEO, Mr. Sharma, called an emergency board meeting and decided to invest ₹50 lakh in setting up an effluent treatment plant. He argued that the company's long-term survival depends on maintaining a clean environment. Some directors questioned whether spending on pollution control was legally required or merely voluntary. Mr. Sharma replied that businesses have obligations beyond profit-making — they owe a duty to the community and the natural environment, regardless of legal compulsion.

Question 1: What type of social responsibility is GreenLeaf Pvt. Ltd. fulfilling by installing an effluent treatment plant?

GreenLeaf is fulfilling its responsibility towards the community and environment.
This falls under social responsibility to protect the natural environment from industrial pollution.

Question 2: Some directors felt this expenditure was not legally required. Does this affect the moral obligation of the business? Explain.

Social responsibility goes beyond legal obligation; it is a voluntary commitment to act in the interest of society.
Even if not legally mandated, a business has a moral duty to prevent harm to the community, which is the essence of social responsibility.

Question 3: Mr. Sharma said 'long-term survival depends on maintaining a clean environment.' Evaluate this statement in the context of the arguments in favour of social responsibility of business.

Long-term self-interest: A business that neglects environmental duties may face legal action, public boycotts, and loss of goodwill, harming its long-term survival.
Avoidance of government regulation: Voluntary action reduces the risk of strict government-imposed regulations.
Converting problems into opportunities: By investing in pollution control, the company can innovate and develop eco-friendly products, turning a challenge into a competitive advantage.

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Case Study

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Case Set

Case Set 2

Case Analysis

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Radiance Cosmetics Ltd. recently launched a new product line using ingredients sourced from tribal forest communities in Odisha. The company pays fair prices to the tribal suppliers and employs 200 local women as production staff. It also runs a free health clinic for workers' families and contributes 2% of its net profit to a nearby government school. During a business ethics workshop, the HR head, Ms. Priya, stated that their conduct is guided by honesty, fairness, and respect for all stakeholders. She emphasized that ethical behaviour builds brand trust and customer loyalty, which ultimately drives sustainable profits. The company recently won a CSR award from the Ministry of Corporate Affairs.

Question 1: Identify any two elements of business ethics demonstrated by Radiance Cosmetics Ltd.

Honesty and fairness in paying fair prices to tribal suppliers.
Respect for stakeholders by providing employment, healthcare, and education support to the local community.

Question 2: How does ethical behaviour benefit Radiance Cosmetics in terms of business performance?

Ethical behaviour builds brand trust and customer loyalty, leading to repeat purchases and stable revenue.
It helps attract and retain talented employees who prefer to work for socially responsible organisations.

Question 3: Discuss how Radiance Cosmetics fulfils its social responsibility towards different stakeholders mentioned in the passage.

Towards employees: Provides employment to 200 local women and runs a free health clinic for workers' families.
Towards suppliers/community: Pays fair prices to tribal suppliers, ensuring their economic well-being.
Towards society/government: Contributes 2% of net profit to a government school, supporting education — consistent with CSR provisions under the Companies Act.

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Case Study

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Case Set

Case Set 3

Case Analysis

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FastBite Foods Ltd. manufactures packaged snacks popular among school children. An internal audit revealed that the sodium and sugar content in their products far exceeded safe dietary limits for children. The marketing team argued that disclosing this on labels would reduce sales. However, the CEO insisted on transparent labelling, saying that consumers have a right to accurate information. The company revised its labels and even launched a 'healthier' product variant. Initially, sales dipped, but within a year, customer trust improved significantly and sales recovered. Consumer forums praised the company's honesty. The case was discussed at an industry conference as an example of how ethical conduct and business success are not mutually exclusive.

Question 1: What responsibility towards consumers did FastBite Foods Ltd. fulfil by revising its product labels?

FastBite fulfilled its responsibility to provide accurate information to consumers.
Consumers have a right to know the true content of products they purchase, and the company honoured this right.

Question 2: The marketing team feared that transparency would reduce sales. How does the actual outcome challenge their concern?

Although sales dipped initially, customer trust improved and sales recovered within a year, showing that honesty builds long-term loyalty.
Ethical behaviour, while sometimes costly in the short run, generates sustainable business success — disproving the idea that ethics and profit are incompatible.

Question 3: Using arguments in favour of social responsibility, justify why FastBite's CEO was right in insisting on transparent labelling.

Long-term self-interest: Transparency builds customer trust and long-term brand loyalty, which sustains profits.
Moral justification: Consumers, especially children, deserve protection from harmful products; concealment would be morally wrong.
Avoidance of government regulation: Proactive honest labelling reduces the risk of mandatory regulatory intervention or legal penalties for misleading consumers.

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Case Study

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Case Set

Case Set 4

Case Analysis

Passage

Sunrise Textiles Ltd. is a large garment exporter. Recently, labour welfare activists reported that the company employs contract workers at wages below the statutory minimum wage, with no provision for provident fund or medical leave. The HR manager argued that since these are contract workers, the obligations are lower. The workers staged a protest, and the news went viral on social media. The company's major international buyers threatened to cancel orders unless working conditions improved. Following this, the management agreed to revise wages, ensure statutory benefits, and improve factory safety. The management also appointed a welfare officer to address worker grievances. This turnaround was seen as a response to external pressure rather than genuine ethical commitment.

Question 1: Identify the responsibility that Sunrise Textiles initially failed to fulfil towards its workers.

Sunrise Textiles failed in its responsibility towards employees by paying below minimum wage and denying statutory benefits like provident fund and medical leave.
A business has a duty to provide fair wages, safe working conditions, and social security to all workers.

Question 2: The company's change came due to external pressure. Does this qualify as genuine social responsibility? Explain.

True social responsibility is voluntary and stems from genuine concern for stakeholders, not from external compulsion.
Changes made only under external pressure (buyer threats, social media) reflect compliance rather than ethical commitment, and may be reversed once pressure eases.

Question 3: Analyse how Sunrise Textiles' initial conduct contradicts the concept of business ethics and what the company should do to embed ethical behaviour permanently.

Contradiction with ethics: Paying below minimum wage and denying benefits violates principles of fairness, honesty, and respect for workers — core elements of business ethics.
Structural reforms: The company should develop a formal code of conduct, conduct regular ethics training, and establish a grievance redressal mechanism.
Leadership commitment: Top management must lead by example and create a culture where ethical standards are upheld not for external compliance but as core organisational values.

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Case Study

Passage with linked questions

Case Set

Case Set 5

Case Analysis

Passage

Pinnacle Steel Ltd., a large public sector enterprise, operates in a region with high unemployment. The government has mandated that companies with a net profit of over ₹500 crore must spend 2% of their average net profit on CSR activities. Pinnacle spent its CSR funds on building roads, providing scholarships to meritorious students from economically weaker sections, and setting up vocational training centres. The company's CFO argued that this CSR spending reduces profits and is essentially a 'tax by another name.' However, the company's public relations team pointed out that CSR activities significantly enhance brand image and make it easier to obtain regulatory approvals and community cooperation for future expansion projects.

Question 1: Under which law is the CSR spending requirement mentioned in the passage made mandatory?

The mandatory CSR spending of 2% of average net profit is required under the Companies Act, 2013.
It applies to companies meeting specified thresholds of net worth, turnover, or net profit.

Question 2: How does the PR team's argument counter the CFO's view that CSR spending reduces profits?

The PR team's argument illustrates that CSR enhances brand image and goodwill, which helps secure regulatory approvals and community support, facilitating future business expansion.
This shows that CSR is an investment in long-term business sustainability rather than merely a cost, refuting the CFO's view.

Question 3: Critically evaluate Pinnacle Steel's CSR activities in relation to its responsibilities towards the community and government.

Responsibility towards community: Building roads and vocational centres improves infrastructure and employability in a high-unemployment region, directly benefiting the community.
Responsibility towards government: Compliance with the Companies Act, 2013 CSR mandate demonstrates law-abiding conduct, reducing regulatory friction.
Evaluation: While the activities are commendable, for CSR to be meaningful it must align with the genuine needs of the community and be driven by authentic concern, not just legal compliance or brand management.

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Chapter sections

Chapter social-responsibilities-of-business-and-business-ethics: Social Responsibilities of Business and Business Ethics | Case Study Questions

Passage

Question 1: What type of social responsibility is GreenLeaf Pvt. Ltd. fulfilling by installing an effluent treatment plant?

Question 2: Some directors felt this expenditure was not legally required. Does this affect the moral obligation of the business? Explain.

Question 3: Mr. Sharma said 'long-term survival depends on maintaining a clean environment.' Evaluate this statement in the context of the arguments in favour of social responsibility of business.

Passage

Question 1: Identify any two elements of business ethics demonstrated by Radiance Cosmetics Ltd.

Question 2: How does ethical behaviour benefit Radiance Cosmetics in terms of business performance?

Question 3: Discuss how Radiance Cosmetics fulfils its social responsibility towards different stakeholders mentioned in the passage.

Passage

Question 1: What responsibility towards consumers did FastBite Foods Ltd. fulfil by revising its product labels?

Question 2: The marketing team feared that transparency would reduce sales. How does the actual outcome challenge their concern?

Question 3: Using arguments in favour of social responsibility, justify why FastBite's CEO was right in insisting on transparent labelling.

Passage

Question 1: Identify the responsibility that Sunrise Textiles initially failed to fulfil towards its workers.

Question 2: The company's change came due to external pressure. Does this qualify as genuine social responsibility? Explain.

Question 3: Analyse how Sunrise Textiles' initial conduct contradicts the concept of business ethics and what the company should do to embed ethical behaviour permanently.

Passage

Question 1: Under which law is the CSR spending requirement mentioned in the passage made mandatory?

Question 2: How does the PR team's argument counter the CFO's view that CSR spending reduces profits?

Question 3: Critically evaluate Pinnacle Steel's CSR activities in relation to its responsibilities towards the community and government.

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