topic 1.3:organisational objectives

ethics definition

ethics relate to the right and wrongs of making a strategic decision that are beyond legal requirements

setting ethical objectives definition

is the process by which organisations apply ethical values to their targets and the actions by which they will achieve them

corporate social responsibility definition (CSR)

CSR goes beyond legal compliance and strives for companies to actively contribute to sustainable development and societal well being

advantages of ethics for stakeholders

• community trust increases( increase in customer loyalty , lesser employee turnover)

• long term business sustainability (loyal customers, lower legal risk)

• governmenr support improving leads to subsidies

advantages of adopting ethics and CSR

1. positive image (showing concern to society leads to more consumers respecting the brand)

2. highly motivated employees lead to higher efficiency and productivity

3. solve social problems like discrimination at work

4. higher profit margin in the long urn due to increased customer loyalty (more likely to continue supporting business which follows ethics and CSR)

disadvantages of adopting ethics and CSR

1. financial cost of implementing ethical objectives (eg needing to buy more sustainable products ), take it out on consumers lose customers in future

2. need for higher investment in capital (some need to produce large machinery and requires large upfront capital expenditure)

3. lower profitability in the short run (cost is needed almost immediately to purchase the resources , but the benefits like profits take time to come through, profits will increase In long run after an increase in customer loyalty )

4. may lose some customers due to high prices especially during recession

5. CSR may be seen as a PR strategy to the stakeholders (Firms publicise CSR activities heavily:Actual impact may be small compared to profits

👉 Example: donating $1 million while causing millions in environmental damage.harm local—>Eg:Displacement of local businesses

1. • Large firms with strong CSR branding may dominate markets

   • Small local firms cannot afford CSR compliance

   • Leads to loss of local enterprises

CSR examples

1. reducing carbon footprint ‘

2. diversity , equity and inclusion

3. community volunteering

4. corporate policies that benefit the environment

reasons for implementing CSR and ethics objectives

1. promote a positive public image and perception (more respect gained, makes business more appealing)

2. attract long term loyalty from employees and customers and may find that their approach provides a useful competitive advantage (employees ate at the company that treats them right and fair , customers support businesses who support similar values as them)

3. prevent cultural clashes(reduce misunderstandings and cultural differences, promoting teamwork)

4. avoid legal prosecutions

5. receive support of local community(cheaper FOP)

avoid legal prosecutions elaboration

Following ethical standards and CSR policies helps businesses comply with laws and regulations related to labour practices, environmental protection, and consumer rights. This reduces the risk of legal action, fines, or lawsuits. For example, companies that follow fair employment practices are less likely to face legal prosecution for discrimination or unsafe working conditions.

difference between ethics and CSR

CSR us about responsibility to all stakeholders and not just shareholders

Ethics is about morally correct behaviour

SWOT definition

a useful decision making tool that stands for strengths , weakness , opportunities and threats. it can be used to assess the current and future situation of a brand , produce, business s, proposal or decision. it considers both internal factors and eternal factors that are relevant to the issue under investigation

strengths

• internal factors that are favourable compared to its competitors

• a strength is a factor which a business currently possess and which it performs effectively in

• Eg: good marketing , employee skills , loyal customer base

weakness

• internal factors that are unfavourable when compared with its rivals, creating competitive disadvantages

• a weakness is an area in which the business is currently performing poorly in

• Eg: limited aces to capital , industrial disputes

opportunities

• external possibilities for future developments

• an opportunity is a potentially successful or profitable activity that the business could take advantage of in the future

• Eg:merger, organic growth ,

Threats

• external factors that hinder the prospects of an organisation

• represents a potential future problem which the business might face in the future

• Eg: politics, climate change , competitors , restriction of certain raw materials