Unit 7 16 Marker Case

Question 1

Costa is striving to reduce the impact they have on the environment and become more socially responsible. To what extent do you believe that being more socially responsible should be the main corporate objective for all businesses?

FIRST (it should)

Answer 1

-Costa operates in a market that has recently been highlighted for its negative impact on the environment, with nearly none of the 2.5 billion takeaway coffee cups thrown away being recycled

-Businesses that are seen to be more socially responsible can experience an increase in sales; research often shows that customers are more likely to buy from businesses which are more socially responsible. Making social responsibility the main corporate objective could therefore give Costa a major competitive advantage in the coffee shop market, leading to a better reputation and increased sales revenue

-Increased social responsibility can make it easier for businesses to attract employees as well as reducing labour turnover as quite often, employees want to be associated with a business that is seen to be socially responsible. This can also lead to a reduction in costs

Question 2

On the other hand

Answer 2

For many businesses, profit maximisation is often seen as the most important objective, especially for public limited companies whose shareholders may demand a high dividend

• Being socially responsible can lead to increased costs for businesses. Smaller businesses may struggle to meet these costs whereas for larger businesses, it could reduce their competitive advantage, especially if they operate in international markets where social responsibility isn’t seen to be as important

-Archie Carroll argued that businesses have economic responsibilities and a responsibility to be profitable, which underpins the other responsibilities of businesses. If these responsibilities are not met then a business may not be able to meet its social responsibilities

Question 3

Conclusion

Answer 3

-For some businesses, being socially responsible may be their main objective, whereas for other businesses, being socially responsible will simply be an objective
-Being more socially responsible can lead to increased profits for businesses. In the case of Costa, it is looking to lead the industry when it comes to reducing coffee cup waste, which can give Costa a USP as well as reducing its costs; this is increasingly important in such a high growth and competitive market

• Depends on the type of business, for start-up businesses, survival, breaking even or making a profit will perhaps be their main objective