Current Business Issues Flashcards
impact of pursing a policy of ethical and corporate social responsibility for the business (positive)
• Employees who are aware that their company operates in an ethical manner are more likely to be commedto the success of the company; therefore be more motivated and work harder
• Attracting good staff and retaining such staff in the bngterm is easier for a company with a good trackrecord of behaving in an ethical manner
• Supporting local charities often results in a more loyal workforce who are keen to stay with the company; thus cutting recruitment and retrainingcosts
• Ethical behaviour may attract employees whose commitment may lead to higher productivity, new ideas; which could translate into lower costs; moresocially responsible ways of working (eg energy saving) etc
• Activities undertaken can be used in advertisingand public relations which may result in higher sales; and higher profits in the private sector
• By anticipating and adapting practices in advanceof government directives, organisations can avoid incurring sudden costs; which may affect profits in the private sector/cash flow in the public sector
• May provide publicity opportunities which firms can exploit eg photo opportunity. This may help them build a positive image for the organisation which can assist in defending any adverse publicity they may encounter
• Firms may be able to charge a premium price as consumers will be willing to pay more to support ethically strong products
• Some ethical measures, such as energy saving and recycling, may lower costs directly
impact of pursing a policy of ethical and corporate social responsibility for the business (negative)
• Backlash may occur if consumers or tax payers doubt the intentions of new CSR policies or incur additional charges to implement them
• Being ethical may mean that firms have to spend more on environmentally friendly equipment, ethical sources of supply etc, better wages and conditions for their employees; this would increase costs and reduce profitability
• Companies which publicise their ethical stance are subject to greater publicity scrutiny than others; a small amount of adverse publicity can severely damage the reputation of a company
