7.6b - The Social Environment (Environment and CSR)

Question 1

Negative externalities (external costs) definition

Answer 1

Costs on society of the business’ actions

Question 2

What can government intervention to reduce negative externalities include?

Answer 2

• Legislation
• Need for a license
• Taxation
• Fines

Question 3

Pressure group definition

Answer 3

An organisation formed by a group of like minded people who wish to exert their feelings

Question 4

What are the possible outcomes of pressure groups?

Answer 4

• Company agrees to change
• Company resists pressure
• Government intervenes
• Public supports the pressure group and turns their back on the business

Question 5

How do businesses prevent pressure group intervention?

Answer 5

By conducting a cost-benefit analysis when making a decision about large products

Question 6

What does a cost-benefit analysis work out?

Answer 6

Financial and external costs and benefits of a project

Question 7

How can a business take responsibility for its actions?

Answer 7

• Conduct contingency planning

- Conduct an environmental audit

Question 8

Environmental audit definition

Answer 8

A way for a business to take responsibility for their actions in which they identify what they are doing wrong and find a way of correcting the problem.

Question 9

Advantages of environmental responsibility:

Answer 9

• Marketing opportunities
• Financial opportunities (easier to raise finance)
• HRM opportunities (workers happier to work for a responsible business)

Question 10

CSR definition

Answer 10

A company’s non-financial responsibilities to its stakeholders

Question 11

Examples of key CSR issues:

Answer 11

• Labour standards
• Environmental management
• Responsible sourcing

Question 12

CSR reporting definition

Answer 12

A process where a business assesses the impact its activities have on stakeholders and society

Question 13

What sections are the results of CSR reporting divided into?

Answer 13

• The workplace
• The marketplace
• The environment
• The community

Question 14

Advantages of CSR to a business:

Answer 14

• USP
• Good reputation
• Attract employees
• Decisions are made on what is best for society in the long-term

Question 15

Disadvantages of CSR to a business:

Answer 15

• Less efficient use of resources leading to higher costs
• International disadvantage if other countries do not consider CSR
• May just be a way of marketing products
• Small businesses at a disadvantage

Question 16

Mendelow power-interest matrix definition

Answer 16

A tool used to judge which stakeholders a business should listen to

Question 17

Carroll’s CSR pyramid definition

Answer 17

A model that identifies four areas of CSR that are all responsibilities a business should strive to meet

Question 18

What are the four areas of Carroll’s CSR pyramid?

Answer 18

• Philanthropic responsibility
• Ethical responsibility
• Legal responsibility
• Economic responsibility