The Importance of Ethics and Social Responsibilities to a Business Organisation

The Importance of Ethics and Social Responsibilities to a Business Organisation

Laws are the rules of the game” according to Hicks and Cullet (1981). This means that government laws are weapons or instrument of government control of business organisations. The only way government can control is to make organisations obey it existing laws and punish offenders. So that organization, such a co-operations and government agencies are set up by Law.

On the other hand, laws also sometimes forbid the existence of an organization such as organisations that will perform illegal acts.

In reality governmental laws do influence direct and control to large extent the activities of business organisations. Since governmental control is set to protect the society, new laws are generally a reflection of societal attitude and charges. What is important is that government control has to be effective and effected by government always if the experts business organisations to be socially moral. But organisations that know the impotence of ethics and social responsibilities to the society and their organisations will not allow government to effect control before they obey the law or live up to their responsibilities to the general public.

Examples of government control on organization that are unethical and socially irresponsible are:

  1.   Revoking of License
  2.   Closing down of companies
  3.   Central Banks control on banks.
  4.   Awarding of  damages.
  5.   Revenue implementation
  6.   Standardization of products.

Other agencies or organization used by the government to control and get more information concerning the business organisations are:

  1.   NAFDAC: National Agency for Food, Drug,  Administration and Control.
  2.   NDLEA: National Drug LAW Enforcement Agency.
  3.   Environmental Commissions used to check  environmental harzards by companies.
  4.   Health commission also used to check the    health harzard that business organisations  inflect on the public.

The most recent one is the failed bank tribunal set up by the government it bring sanity into the banking institutions in the country.


The origin of the subject area in Nigeria. Social responsibilities of business in Nigeria is beginning to gain ground as a lot of business have adapted the doctrine of social activities to the society. Also there is no doubt that some unsocial and unethical practices of some business, organisations managers and markets is still prevalent in Nigeria.

According to Ejiofor (1987) a lot of business firms do not discharge their duties to society. Apart from primary environmental problems caused by business activities in recent times, secondary problems are now sitting in eg due to the growth of commercial and industrial activities of business these problems have also grown.

Furthermore, the heap of saw dust, crude oil spillage’s which polluted the water and atmosphere, all this causes dangers to Marine life and our circulations in the society. Also industrial projects and activities cause occupational hazards and diseases in the society.

Toxic waste sometimes cause agricultural livestock harzards should business destroy the source of feeding in the society because it is carrying out its economic activities? Business is therefore at the centre of these social hazards and problems.

Therefore social responsibilities of business implies that industrial or economic activities designed to contribute to economic and social growth should not at the sametime endanger the very strive to help economically.

An instance is given in PETER Ejiofor’s Book “Foundations of Business Administration” where he sighted as instance of a company not being socially responsible and firm was taken to court and damage awarded.

In Ejiofor (1980) page.52 it says:

On the 22nd of February, 19978 the Daily Time (p.5) reported the award of =N= 11,915.65 damages by the supreme count of Nigeria against an Ikeja based textile mill for an alleged nuisance by industrial waste matter which emanated from the firm”

Therefore, the damages done to this company as a result of the public knowledge and damages awarded by the court is a great treat to the  continuous existence and corporate image of the company. Therefore to all these business Nigeria should be socially responsible to the society.



Management respects the image of every organization. It is therefore management’s responsibilities to live up to expectation.

Every business organization has to be socially responsible and obey the codes of ethics. Because whatever we do, say and carryout will affect the organization generally.

Management faces a lot of decisions that will affect them and their entire success and failure of its enterprise.

According to Appleby (1981) social issues managers face and which they have to make benefits decisions are:

  1.   MAKING POLICIES: Manufacturing of products that might affect health eg. Cigarettes, weapons etc.
  2.    POLICIES THAT IMPLY SOCIAL COST: eg. pollution of rivers, the firm reduce their cost by primary waste into rivers and this involves making social cost clear and evacuate such waste.
  3.   RELATIONS TO POLITICALS PARTIES: – what kind of relationship should be between them.

Management in the section of an organisations that takes care of controlling, planning, motivating, coordination etc, functions of management.

The social responsibilities of management are:

A.  Maintenance of Good Image: It is the basic responsibility of management to live up to expectation as the image of the organization. They should not regulate the environment and should show good attitude of the organization to their employees.

B.   Human factor in Labour: Management should be good protective measure to their employees.

C.   Compensating Shareholders and Debunture: Most times organisations make too much profit. It is duty of the management to see that shareholders and debenture holders are compensated with this excess profit.

D.  Customers protection: Management should act in public interest by making the customers to have the best for his money at affordable prices.



Government Laws in Nigeria are meant to protect existing and infant companies, and also to make them ethically and socially moral based on some of the problems like the change of the environment, the changing business and economic system, the changing role of Management etc.

Any violating these laws pays the price of closure or awarding to damages. The company acts in Nigeria eg. The company’s act of 1968, are rules governing business activities in Nigeria. Government legislation has been passed in a number of areas of requiring business and other organisations to fulfill certain social responsibilities. Such are regulations concerning fair employment practices, pollution control, Job safety and pension reform, while concerning any corporate matter.

Therefore, government business organisations live up to the expectations of being ethical socially responsible to the society they operate and do business with. It is therefore advisable for business organization who wait to continue in business to obey governmental laws concerning them. As government is ready to punish any defaulty business entity. Since no business is set to run at least to be a victim of the law and government. But to make target their responsibilities to the government, people, security, environment and the country as a whole.


Methods of Assessing Social Responsibilities:  It is vital that any business organization that carries out social responsibilities should have away of assessing its social responsibilities and problems. Method of assessing social responsibilities are:

  1.  Social responsibility audit
  2.  Attitude studies.
  3.  Social priority.
  4.  Corporate planning.

A.     So the Responsibility Audit:- It is advocated by many theorist eg John Humble that firms should keep as social responsibility audit in which policies in the external and internal environment of the human or firm can be verified.

B.  Attitude studies: This involves monitoring changes in the attitude of firms, employees, shareholders, customers opinions of leaders in society and government concerning social responsibilities most especially.

C.  Social priority analysis: This involves analysis of social policies that are induced in organizational policies to facilitate its implementation eg. The British steel corporation has a department of social and regional policy.

D.      Corporate planning: Is simply a formal, logical method of running a business, which is comprehensive, embracing all attitudes of an organization corporate planning as a method of assessing social responsibility makes sure that an organization social activities are performed or implemented.


—-This article is not complete———–This article is not complete————

This article was extracted from a Project Research Work Topic


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The Importance of Ethics and Social Responsibilities to a Business Organisation

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