Social Responsibility - Business Revision Notes

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Contents

Social Responsibility 4

Social Responsibilities towards Shareholders 4

What are the Advantages of being Socially Responsible? 5

How Can Business Ethics be Improved? 5

Environmental Issues and Responsibilities for Business 6

Effects of the Environment on Business 6

Characteristics of an Environmentally Conscious Business 7

Effect on Costs of Meeting Ethical, Social and Environmental Responsibilities 7

Effects on Revenue 7

Social Responsibility

  • Social responsibility is the duty of a business to conduct business in an honest and fair way. A business has an obligation to have a positive impact on the individuals and environment it affects. Example: a business using environmentally friendly machinery in its factory.

Social Responsibilities towards Shareholders

Shareholder

Examples of Social Responsibility

Investors

  • Giving them honest financial information about the performance of the business.
  • Paying them a reasonable dividend.

Employees

  • Providing employees with safe working conditions.
  • Giving them a fair wage for the work they do.
  • Treating all employees fairly and with respect.

Customers

  • Providing good quality products and services that are safe.
  • Fairly priced goods.
  • Deal with complaints in a timely and fair fashion.
  • Advertising honestly.

Government

  • Obey the laws of the country.
  • Pay taxes in full and on time.

Local Communities

  • Controlling noise pollution and traffic disruption.
  • Buy from local suppliers.
  • Hire local people.

Environment ( 3 P’s)

  • Safe and clean production process.
  • Safe and healthy products.
  • Packaging that can be recycled.

What are the Advantages of being Socially Responsible?

  • Customer Goodwill: most consumers like to buy from businesses that care about society and the environment. They like businesses that are ethical.
  • Happier Employees: employees with good pay and working conditions will be happier in their employment. There will be a lower labour turnover and employees will work harder.
  • Easier to ...

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