dp 4 Flashcards
what are stakeholder conflicts?
all stakeholders should have the business to achieve its aim to objectives, but it doesnt always occur as each stake holders have different interests
define corporate social responsibility
the obligations a business has over and above its legal responsibilities to the wellbeing of employees and customers, shareholders and the community as well as the environment
corporate social responsibility strategies
- provide employees with a work life balance
- implement recyclable packaging to achieve and reduce environmental impact without compromising quality
- reduce wastage by recycling resources
-ensuring supplies are sources from ethical suppliers - from partnerships and support charities
advantages of csr
- differentiating the business from other competitors as it enhance reputation and relationships between stakeholders
- media interest can be developed from good reputation
- increase customer retention as consumers may want to make repeat purchases from businesses they believe are socially responsible
- employees may be more motivated to work the business, which decreases staff turnover and increased productivity
disadvantage of csr
- time consuming as the business will be required to do extensive research in finding new suppliers that also comply to csr
- expensive as recyclable and ethically sourced material are labour extensive.
what is the concept of stakeholder conflicts?
some interests of stakeholders may be compatible, whereas others are incompatible and the fulfilment of one may lead to a stakeholder being dissatisfied, causing conflict
such as employees and their unions require safe working conditions and reasonable wages, while customers want reasonably priced products. Providing a wage rise or working conditions beyond what is legally required is socially responsible, but it will cost the business money in the short term.
conflicting interest of owners/stakeholders and employees
Employees require safe working conditions and reasonable wages, but this may reduce the business’s profit and dividends to owners/shareholders.
conflicting interests of managers and customers
Management could attempt to maintain profit and a high dividend to satisfy shareholders by raising the prices of products, but this will upset customers, who expect reasonably priced products.
conflicting interest of the general community and management
Management might decide to cut costs by neglecting maintenance, which could possibly put members of the community in danger.
conflicting interests between suppliers and the general community
Suppliers expect to be paid fairly and promptly, but they might reduce costs by using unethical or socially irresponsible practices, which can upset members of the community.
conflicting interests between management and suppliers
Management wishes to keep costs down to improve profit but suppliers providing ethical materials require higher prices to cover their costs.
what can a lack of csr do to a business?
can damage a business’s reputation and reduce its competitive advantage. Customers may react and stop purchasing a business’s product if they learn that the business is exploiting employees, accepting bribes or polluting the environment.
define competitive advantage
when a firm, industry or economy has a lower cost price structure than its rivals. In this situation, goods and services can be sold more cheaply, undercutting competitors, and expanding domestic and foreign sales. The concept can also be extended to product quality range and flexibility in adapting to new trends in the market.
