7.6 Social and technological environment Flashcards
The changes in society and technology that can affect a business’ strategic and functional decision making are
- Urbanisation
- Migration
- Consumer lifestyle changes
- Social changes
What is urbanisation
- People moving from rural areas to urban areas because of job opportunities
What is migration
People moving from on country to another, with the intention of residing and accessing employment
(It has increased demand for cultural food shops and this can reduce for groceries from established retailers)
What are consumer lifestyle changes
When buying habits or spending patterns change e.g Morrisons introducing online grocery shopping
What are social changes
Include the growth of e-commerce and the changes in buying habits as people begin to expect the availability of e-commerce platforms to complete online transactions
What are demographic changes
- Ageing population
- Rising birth rates
- Migration
Impact of the ageing population
As healthcare improves and people live longer, demand for products and services can change
Impact of the rising birth rates in the UK
Expanding population will increase demand for products and services and businesses must be able to respond to these increases to maintain market share
Impact of migration
The movement of people between countries can affect demand for products and services
Lifestyle changes that can affect a business
- Emphasis on healthy eating
- Emphasis on wellness
Technological changes that can affect a business
- E-commerce
- Social Media
Impact on the emphasis on healthy eating
Consumers may demand healthier food options
Impact on the emphasis on wellness
Awareness of wellbeing and fitness continues to increase, consumer demand for fitness products is likely to increase
Impact on e-commerce
As consumers take advantage of advancements in e-commerce, demand for online shopping will increase and businesses must be responsive to these changes
Impact on Social media
As social media use continues to grow, businesses must adapt customer service procedures to reflect changes in consumer expectations
CSR (Corporate social responsibility)
An approach whereby businesses seek to exceed basic legal requirements by considering their impact on society
CSR focuses
- Satisfying employees
- Satisfying customers
- Satisfying shareholders
- Satisfying suppliers
- Satisfying the community
Satisfying employees
Offering job security, safe working conditions and fair wages
Satisfying customers
Offering reliable products, fairly priced, which exceed legal safety requirements
Satisfying shareholders
Increasing share price and through payment of stable and regular dividends
Satisfying suppliers
Paying fair prices, making regular, on-time payments and offering exclusivity
Satisfying the community
Offering employment and funding restoration projects and community facilities
Disadvantages of CSR
Can increase a business’ costs through paying for initiatives offering employees fair wages and agreeing to pay suppliers fair prices
Advantages of CSR
Attracts customers to the business and increase market share and sales revenue in the long-term
What is Carroll’s Corporate Social Responsibility Pyramid
A pyramid used by managers and leaders to support the business to fulfil their social responsibilities
Bottom to top of Carroll’s CSR pyramid
- Economic
- Legal
- Ethical
- Philanthropic
Economic responsibility: Carroll’s CSR Pyramid
Being profitable is the foundation of the hierarchy and allows the business to move through additional responsibilities
Legal responsibility: Carroll’s CSR Pyramid
Paying employees the national minimum wage
Ethical responsibilities: Carroll’s CSR Pyramid
See a business making moral decisions such as agreeing to pay employees more than the legal requirement in order to support their standard of living
Philanthropic responsibility: Carroll’s CSR Pyramid
The business supports society and the community through supporting charitable events and sponsoring public facilities
The shareholder concept
Businesses have a responsibility only to raise value for shareholders through increasing share prices and paying dividends and that profit maximisation is the only focus of the business
The stakeholder concept
As well as satisfying shareholders’ needs, the business must place equal emphasis on satisfying the needs of all other stakeholders, including employees, customers and suppliers
