Business & Society

Question 1

Importance of social responsibility for businesses

Answer 1

• businesses can have huge impact on environment and society
• unresponsive/unsustainable behaviour of single businesses can lead to global crisis

E.g.: Lehman, Facebook & Cambridge analytical, Rana plaza

Question 2

Social triangle

Answer 2

State: government (federal, state, local)
Market: Companies
Civil Society: Community

Question 3

Social responsibility, CSR

Answer 3

Fulfil:

• economic responsibility: be profitable
• legal responsibility: obey the law
• ethical responsibility: be ethical (what is right and fair)
• philantrophic: be good corporate citizen

CSR: serve the interest of multiple stakeholders

Question 4

Stakeholders

Answer 4

Primary: directly involved (e.g.: customers, natural environment)
Secondary: indirect relationship (e.g.: government, environmental interest groups)

Social: individual or group of human beings
Nonsocial: nonhuman entities

Question 5

Triple bottom line

Answer 5

People: treat people with respect and dignity
Profit: economically sound
Planet: good for environment

Question 6

Natural environment as stakeholder

Answer 6

Atmospheric issues, biodiversity issues, water issues, land issuer

Sustainable development

• Business: responsible business, sustainable business
• Civil society: responsible living, sustainable living
• Government: responsible governance, sustainable governance

–> UN Sustainable development goals

Motivations for sustainable business: competitive advantage, satisfy customers, improving reputation…

Question 7

Consumers as stakeholders

Answer 7

Consumer relations: process for creating/maintaining positive relationship with consumers by meeting their needs

• Quality issues
• Safety issues (e.g.: exploding phones)
• Product liability (e.g.: McDonalds hot coffee case)
• Advertising issues (e.g.: target exposes teen girl’s pregnancy, advertising to children, alcoholic beverages advertising…)

Responsible consumption

• watching firm’s behaviour
• buying cause-related products (e.g.: donate their profit)
• reduce consumption volume
• support small businesses and regional products
• recycling

Question 8

Employees as stakeholders

Answer 8

Economic responsibilities: provide employment, job security
Legal: wages, equal opportunities, sexual harassment, health/safety
Ethical: training & development, diversity & inclusion, work-life balance
Philanthropic: employee volunteering

–> Example: gender pay gap

Question 9

Shareholders as stakeholders

Answer 9

“Old” story: only about making money, only shareholders matter, people are self-interested
“New” story: stakeholder relationships matter, purpose/value/ethics embedded in organisation, people are complicated

Shareholders model: economic and legal responsibilities
Stakeholder model: economic, legal, ethical, philanthropic

Question 10

Community relations

Answer 10

–> building/maintaining relationships and trust with the community (
Economic: provide jobs…
Legal: working conditions, paying taxes…
Ethical: gender equality, minimum wages…
Philanthropic: gifts, grants, donations

Strategic philanthropy: combine organisational and social benefits
- Increases: consumer trust, stakeholder loyalty, employment engagement, reputation

Social entrepreneurship: innovative entrepreneurial approaches to solve social problems and satisfy social needs

Shared value: create economic value and save social issues (identify and expand connections between societal and economic progress)