AOS 3B Flashcards
Corporate Social Responsibility
Is a commitment by organisations to run their businesses in an ethical manner. This includes taking responsibility for economic, social and environmental consequences.
World Business Council definition of CSR
The continuing commitment by businesses to behave ethically and at the same time contribute to economic development while improving the quality of life of their workforce, their families, the local community and their society at large
5 areas of CSR (can partake in all or parts)
Corporate governance and accountability, Sustainability and environments, Ethical treatment of employees, Human rights, Community involvement
Ways businesses implement a socially responsible operations system (3)
Waste minimization schemes (reduce, reuse, recycle, recover)
Strategies that reduce carbon emissions
Making sure employees have a better quality of life due to safe working conditions
United Nations global compact (UN) (4)
Are a set of benchmarks that a business can follow to be ethically responsible
Those that sign up to the compact adopt 10 principles covering
Human rights
Labor
Environment
Anti-corruption
Why is it important for companies to be socially responsible (5)
To gain a competitive advantage May reduce costs - maximise operations To encourage ‘best people’ to work forces To establish longevity for our business Increase market share
Triple bottom line reporting is
When a business reports on its economic results (profits) as well as an assessment on its environmental and social performance.
The three pillars of triples bottom line reporting
Profit
Planet
People
Companies that implement the Triple Bottom Line
DHL and Patagonia
Financial key performance indicators
- net profit
- market share
- share price
Social key performance indicators
- staff morale
- working conditions
- community living standards
Environmental key performance indicators
- co2 emission levels
- waste levels
- rates of recycling
Environmental management system
A tool to help manage the environmental impact of the business and it’s activities. It includes a series of policies and practices that focus on environmental issues
Policy
A written document that outlines a process that an organisation should follow
Social and economic environmental inputs
The purchase of sustainable inputs will minimise the effect the business has on the natural environment as well as community health and social conditions
Examples of environmentally sustainable input practices
Renewable or green energy
Local suppliers - decreases carbon footprint and reduced transport costs
Purchase sustainable equipment and sustainable technology eg; icloud and hybrid cars
Sustainable Procurement advantages - inputs
Reduce impact on the natural environment - landfill and less waste costs
Increased productivity via new technology choices
Improved business reputation
Transformation Process social environmental and ethical
Businesses that use sustainable operations processes use fewer resources, reduce business costs and increase productivity - therefore competitiveness improves
Examples of environmentally sustainable/social responsibility responsible transformation process
Reduce, Reuse, Recycle, Recover
Retain all production in Australia to ensure Australians are employed
Use green technology eg; the cloud
Ethical treatment of employees eg; fair wages
Outputs - Social Responsibility and environmental considerations (3)
Honest marketing
Minimal packaging and limited environmental impact
Recyclable/biodegradable options used in package
Waste minimisation impact on CSR through reduction of operating costs through (3)
Reduced landfill
Reduced use of materials/inputs
Improved reputation
Recycling of materials (2) Reduced costs through lower use of materials means:
Improved reputation
Lower landfill costs
Lean manufacturing (3) Improvements in:
Productivity
Quality
Employee motivation through empowerment
competitiveness
Inventory management system (2) Greater efficiency and productivity through:
Reduced waste
Productivity improvements
Manufacturing overseas
As labour costs in Australia are very high many companies have moved their manufacturing overseas eg. car manufacturers, clothing and footwear manufacturers
Global outsourcing
Global outsourcing is connected to overseas manufacturing. eg Telstra has a call centre in the Philippines
Supply Chain definition
The supply chain takes natural material and parts and transforms them into finished products
Supply chain management
Is the meeting of consumer demands of goods and services whilst making efficient use of inputs, the production process and the distribution of the finished good
Logistics
The distribution of products or movements/delivery of materials from one place to another
Participants in the global supply chain (4)
Consumers
Producers
Employees
Governments
Consumers role (3)
Purchase our products
Be aware of changing consumer trends
Place extra demand on companies to have good CSR
Producers role (3)
Signed contracts to consolidate relationships
Reliable production
Must take into account customers environmental and social desires
Employees role (3)
Management of employees may be difficult due to:
language barriers if employees are overseas
Fair wages
Working conditions
Government’s role
The legal and government involvement in industries before considering them as part of the global supply chain
Global supply chain (global sourcing) (3)
Global sourcing of inputs - selecting suppliers from overseas
Overseas manufacturing/processing - when the transformation stage happens overseas
Global outsourcing - when a business/organisation contracts another business (3rd party) to perform some of its role/function eg. Telstra call centre in the Philippines
Advantages and disadvantages of Global sourcing
Advantages
- Opportunity to tap into global efficiencies - this may reduce the cost of production, inputs or outputs which improves profit meaning business objectives can be achieved
- Skills and resources not found in the home nation may be tapped into
- Job opportunities and economic growth will be provided in disadvantaged areas
Disadvantages:
- Financial and political risk - if the country you manufacturer in breaks out in civil war it will affect your business
- Risk of losing your intellectual property like patents or copyright - different laws in different countries may impact this
- Loss of jobs in Australia
What businesses should consider before engaging in global sourcing (6)
Local labour costs and conditions
- Impact on CSR
- Impact on potential job losses in Australia
Environmental impacts:
- greenhouse gases and carbon emissions generated by transport and manufacturing
- Environmental impacts such as pollution in local communities
The impact of fluctuating exchange rates
- The often changing value of the Australian currency compared to the other nations affects the costs of doing business overseas
Tariffs and import restriction
- A government charge (tax) which impacts the final cost of a product
Location of oversea suppliers
- How far are they from Australia
- Suppliers must be close to transport links so products can be easily transported.
The political stability of the nation you are sourcing from
