Ethics and Social Resposibility

Ethics - moral principles which quide decision making and strategy.

Morals - concerned with what is right and wrong from a social point of view, decided by individual people, not an abstract business.

Corporate Social Resposibilities - socially resposible firms whichact morally towards their stakeholders, such as their employees and their community.

Social Auditing - a way to ensure that socially resposible objectives are being implimented. It is an independant assessment of how a firm's actions affect society.

Unethical Business Behaviour

Toxic waste from factorys and plants using chemicals has been dumped into oceans and rivers affecting nature and safety. This is disposal of waste in an environmentally unfriendly manner.

Factorys with huge chimneys have an option to install equipment to strip the fumes of the noxious gases but this option is not always taken. This is causes pollution by using environmentally unfriendly production processes.

Children in third world countries are often hired as very cheap labour and are forced to work in terrible conditions. This could be exploitation of suppliers or workforce.

Advantages

Improved Corporate Image - avoid bad media and attract positive PR. People will feel more socially responsible for using the company.

Increased Customer Loyalty - Customers will favour a socially resposible firm which may result in repeat business.

Cost Cutting - by being more concerned with social matters a business could save money. For example, reducing packaging to help the environment or avoiding litigation costs.

Improved Staff Motivation - Employees are likely to be proud to work for a business which cares about society. This will increase staff productivity and may reduce turnover. Also, socially responsible businesses are more likely to ensure good working conditions for workers.

Improved Staff Moral - ethics in a business may attract a motivated staff.

Disadvantages

Compliance Costs - it is sometimes more expensive to behave ethically in business. Time and money spent on farm environments for example to produce organic food and good conditions for animals.

Lower Profits - if it is not possible to cover the compliance costs by raising the prices of goods or services then the cost will be deducted from the profit.

Stakeholder Conflict - not everyone will prioritise ethics in a business. Profit and short-term goals may be more important to some people.



Popular businesses are often involved in helping to improve society in some way. Helping the community for example allows the business to become familiar with its community and gain familiarity with its residents. Positive PR is also a benefit of acting socially resposible. Being socially irresponsible results in bad press and thus customers do not wish to support such a company, thus acting oppositely can only be a good thing, from this point of view.



A social audit is used to ensure that all their socially responsible objectives are being carried out. There would be negative media press on the company if the business stated that it was being socially responsible only to find out that some branches or employees were not upholding the firms socially resposible policies.

Franchising

The difference between a franchise opportunity and setting up a business is mainly who is in charge. A franchisee has to report back to the franchisor which he/she wouldn't have to do in their own business. All major decisions are made or approved by the franchisor. Marketing is provided for the franchisee. The franchisee does not have to spend time and money building up the business, gaining the name of the company a good reputation, he/she just has to uphold one which already exists. The franchisee has to pay the franchisor whereas a business owner has no one above themselves to pay.

Popular, well-known names are likely to be in the Oregon area franchise if it succeeds in gaining one because this will help make the franchise successful.

The Premier League may seek to make itself a more well-known name globally and thus offer its franchise to similar companies in other countries. This would mean teams would have more cultural influence, more competition, more players trying to get a place on the team and make the team members more famous.

Testing

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