PPQ - EXTERNAL - ethics/CSR

Question 1

2022 - Describe the ways Shell’s financial performance, shown in Exhibit 3, may disadvantage its stakeholders (4 marks)

Answer 1

• total revenue by business group has decreased – may have led to reduced managers’ bonuses
• revenue by geographical area has decreased – governments in each area will not have been able to claim as much in value added tax (VAT)
• purchases have decreased – suppliers will have received less income
• loss for the year was made – governments will not have gained corporation tax in 2020

Question 2

2021 - Using Exhibit 3, describe the impact of the trends in BMW Group’s sustainability indicators between 2017 and 2019 (8 marks)
Environmental

Answer 2

Environmental
- energy consumption decreased – reduces the cost of production
- CO2 emissions decreased – less pollution to the environment, reduce carbon taxes paid
- waste for disposal increased – more waste to landfills
- renewable energy purchased increased – may be cheaper for BMW to purchase energy from a third party than investing in its own renewable energy sources

Question 3

2019 - Explore the effects of following a policy of Corporate Social Responsibility on an organisation’s Marketing and Operations functional areas. (6 marks)
Marketing

Answer 3

Marketing
- can add CSR branding to packaging to promote sales for example Fair Trade Logo
- may release public relations statement outlining CSR policy to general public to improve image
- may limit what promotions it uses e.g., not celebrities who have been inapropriate

Question 4

Specimen - Many clothing manufacturers have developed CSR policies to eliminate hazardous chemicals in their production processes. Discuss the effects of such a policy on their functional areas. (10 marks)
HR and Finance

Answer 4

HR
- People will be more attracted to become an employee if they believe that an organisation is an eco-friendly place to work
- Reduced staff turnover if employees feel that the organisation is being responsible
- Less chance of legal action as there is lower risk of chemical accidents

Finance
- An organisation may have to purchase greater quantities of nonhazardous chemicals, as they may not be as efficient as hazardous ones
- An organisation may have to spend capital on new machinery to accommodate different chemicals
- Becoming more eco-friendly may improve its ability to obtain
finance from ethical lenders

Question 5

Specimen - Many clothing manufacturers have developed CSR policies to eliminate hazardous chemicals in their production processes. Discuss the effects of such a policy on their functional areas. (10 marks)
Operations and marketing

Answer 5

Operations
- An organisation may have to change its production process to accommodate a change in chemicals
- Non-hazardous chemicals may not be as effective (eg whitening clothes using ammonia/bleach) which may slow the speed of production

Marketing
- Can be used as a marketing tool in adverts to improve its reputation as an ethical organisation
- The packaging of its products needs to be updated to display that it doesn’t use hazardous chemicals

Question 6

2021 - Using Exhibit 3, describe the impact of the trends in BMW Group’s sustainability indicators between 2017 and 2019 (8 marks)
Employees and society

Answer 6

Employees and society
- women in management increased – better promotion prospects for female staff
- training days decreased – less time for employees to develop skills, reduces expenses
- donations decreased – charities incomes are reduced from less funding from BMW

Question 7

2017 - Analyse the factors which have led to Corporate Social Responsibility becoming an essential part of organisation policy (4 marks)

Answer 7

• Increased competition - CSR allows them to gain a better public image and increases media coverage
• Rise in public awareness for CSR and changing consumer demands
• Motivates employees - Employees like working for a company that has a good public image
• Attract and keep investors - Investors are more likely to be attracted to and continue to support companies that demonstrate a commitment not only to employees and customers, but also to causes and organisations that impact the lives of others

Question 8

2017 - There are many dimensions to Corporate Social Responsibility. Focusing solely on the environment, explore initiatives organisations can implement to ensure they are satisfying stakeholders. (6 marks)

Answer 8

• Using less energy lowers pollution levels therefore meets government aims, as the government is committed to slowing down climate change
• Using less water reduces water pollution which is vital as water shortages threaten farmers
• Implementing a recycling policy reduces waste which will reduce costs for owners as it will reduce the amount they need to pay in landfill tax
• Reducing their packaging can reduce amount of packaging thrown away which will meet the need of customers as their awareness and desire for less packaging has risen dramatically over the last few years
• using local suppliers - reduction of transport will help to reduce their carbon dioxide emissions in order to improve air quality
• Reduction in noise pollution from changing to quieter
  machinery will reduce noise and disturbances for the
  local community

Question 9

2019 - Explore the effects of following a policy of Corporate Social Responsibility on an organisation’s Marketing and Operations functional areas. (6 marks)
Operations

Answer 9

Operations
- may set up a quality circle within department to investigate how waste could be reduced - department may implement a reduce, reuse, recycling policy to reduce costs
- new procedures may have to be implemented to ensure non-essential equipment is switched-off when not in use
- may have to purchase machinery or equipment which uses less energy or lower noise pollution which may be costly to do