Social and other opportunities and constraints

1. Social and other opportunities and constraints

2. Content Social responsibilities: Employees Customers Other stakeholders Business ethics Technological change Environmental pressures and opportunities Political change Pressure group activity Social auditing

3. Social responsibilities Business should operate as good citizens who have duties towards their stakeholders Stakeholders are all individuals or groups that have a direct interest in an organisations performance These include employees, shareholders, the local community and the government

4. Stakeholders Businesses have the following responsibilities to different stakeholders: Shareholders � to generate profits and pay healthy dividends Customers � to provide good quality products at reasonable prices, to look after interests of customers Employees � to ensure health and safety at work, to provide job security and to pay them fairly, to provide training to develop employees skills Suppliers � to pay them on time and to pay a fair price for their goods, to place regular orders and offer long term contracts

5. Stakeholders Local Community � to provide employment, to provide safe working environment, to minimise pollution and negative externalities, to use local suppliers where possible Government � to ensure that no laws are broken, to pay taxes Environment � to keep levels of pollution to a minimum, to try and ensure that the environment is protected

6. Why should firms accept their social responsibilities Although some argue that by meeting social responsibilities profits are reduced in fact the converse is true if businesses accept their social responsibilities they are able to increase profit levels They allow a business to increase its profile Costs can be reduced It can work as a USP differentiating the businesses product

7. Business Ethics Ethics are the shared attitudes and principles held by a businesses employees Moral code � what is �right� and what is �wrong�? They are highly subjective in nature An ethical code of practice states how businesses believe its workers should respond to situations which challenge business values

8. Business Ethics There are conflicts that arise regarding ethics, these mainly stem from conflicting stakeholder requirements, e.g. : Profits (shareholders) vs. higher wages (employees) Production (shareholders) versus pollution (local community, environmental)

9. How to create an ethical culture There are a number of steps which allow a business to create an ethical culture: Find a champion Discover ethical issues Benchmark Test the idea Develop a code of conduct Make it work

10. Technological Change Not only has technology helped to improve the performance of a business, it has also led to new products New technologies such as the internet and mobile technologies have changed the business environment CAM and CAD have changed how products are designed and manufactured

11. Benefits of Technological Change New methods of production Lower Costs Higher profit margins Higher productivity Easier expansion/ diversification into new markets Automation New skills Flexibility

12. Problems with Technological Change Shorter product life cycles Higher R&D costs Monopolies and Barriers to Entry Mergers and takeovers of smaller firms Teething problems Unemployment � incapacity to do the job, job insecurity

13. Environmental Threats and Opportunities Businesses can have a negative impact on the environment Environmental audits assess the impact of a business on its environment Businesses create many external costs that affect the environment e.g. pollution

14. Environment External costs created by businesses can impact the environment in the following ways: Urban blight � excessive development and inappropriate developments mean the environment is visually less attractive, loss of farmland Production and disposal of waste � this could include an increase in litter and rubbish from packaging Use of energy Pollution: Noise � from cars, lorries, factories etc Air � emissions from cars and delivery vehicles Land Sea Water

15. Methods of Controlling Environmental Impact The Environmental Protection Act, 1991 and the Environment Act, 1995 are designed to protect the environment Businesses can also help reduce harm to the environment by: Redesigning products to use less materials and making them biodegradable / recyclable Sourcing resources from sustainable supplies Finding ways to reduce pollution

16. External Benefits As well as external costs businesses can create external benefits External benefits are advantages a business brings to the local community when it locates its business in a particular area. These benefits will be positive for the local community. Examples: Employment Quality of life Providing a service Regeneration of land

17. Political Change A change in political leadership can impact UK businesses UK Law : Competition Policy, Consumer Protection EU Law Enlargement of the EU Political stance � trading/ trade blocks/ Embargos

18. Pressure Groups A group seeking to influence government policy or business activity to secure the interests of their members and supporters.

19. Pressure Groups Environmental, Consumer, Welfare (animals), industries (TUs) Lobbying- where a pressure group campaigns through leaflets, petitions etc in order to raise public awareness or change the law

20. Types of Pressure Group Single Cause - Focus on a particular issue: Multi Cause - Focus attention on a wider range of issues often under a generalised heading Protective � Seek to protect interest of members Promotional - Seek to promote issues of interest to its members and supporters in relation to the particular topic