what factors affect the objectives chosen by a company Flashcards
What factors affect the objectives chosen by a company
size of the business: New/small business may be happy with satisfying pics may be more concerned with growth and profit’s
Public sector private sector: State owned business normally tends not to have profit as a major objective E.G. healthcare system
age of the business
Corporate culture: “The way we do things around here” - what the business places value on as important (usually driven by leader)
Corporate social responsibly
this is when a business has an objective to consider the interests of society by taking responsibility for the impact of their decisions and activities on customers, employees, communities and the environment.
Why have business became more socially responsible
Businesses have become more socially responsible - it is fashionable
creates good PR
New laws are forcing businesses to adopt this objective
Business ethics
the growth of CSR as a business objective has led businesses to take an ethical approach
Business ethics can provide moral guidelines for conduct of business affairs
2 influences that shape moral behaviour of businesses: Individuals: have own moral codes values and beliefs, corporate culture.
Ethical code of practice
a document that sets out the way a business believes its employees should respond to situations that challenge their integrity or social responsibility
Advantages of ethical business
marketing advantages
Improvement in recruitment and retention of staff
imporve employees motivation
Disadvantages of ethical business
increase costs
Loss of profits
conflict with existing policies
Conflict with shareholder value objective
Short term versus long term
business may need to accept lower profits now if it wants to invest in machinery etc
Which will eventually increase profits in the long run
growth and increased market share versus profits
Business may need to lower prices in order to increase the number of customers
