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Business- Influencing Decisions
Terms in this set (11)
Corporate Social Responsibility (CSR)
Business addressing concerns/obligations to its wider stakeholders.
Actions that go beyond the min required in addressing societal needs.
Arguements FOR CSR at expense of profit
🔺Improves business' image/reputation
🔺Socially responsible actions can be profitable
🔺Improves social environment and benefits business and attracts investors.
Arguments AGAINST CSR at expense of profit
🔻Responsible to create shareholder wealth
🔻CSR stifles innovation
🔻 Extra costs will be incurred which must be passed on to consumers.
People/groups which have an interest or 'stake' in activities of business
Examples of Stakeholders
Owners, Employees, Shareholders
Name a conflict between objectives #1
Objective of stakeholders can conflict.
E.g.- shareholders want good dividends= high profits BUT workers want higher wages= increasing costs and decreasing profits
Name a conflict between objectives #2
Short term objectives can conflict with long term ones
E.g.- Short term obj is survival then risks should be avoided BUT if long term obj is growth then risks must be taken
Moral guidelines which govern acceptable behaviour
Advantages of Ethics
🔺Positive brand image- customers more willing to buy product
🔺Customer loyalty could be increased so then ⬆️ in customers, demand, supply, revenue, and market share.
Disadvantages of Ethics
🔻 Suppliers of company could be based far away so environment won't benefit from carbon emissions = 🙁 customers = ⬇️ in customers, demand, supply, revenue and market share.
🔻Costs would be higher as they need to raise prices to help protect profit margins = ⬇️ in customers, negative cash flow, demand, supply, revenue and market share.
Where are Ethics tested?
Suppliers- mistreatment of workers (underage and low pay)
Pricing- selling staple products at high prices = cheaper products= lower labour costs
Advertising= Targeting at people can be misleading = portray products differently
Personal Selling= Misconception of what it is
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