6.3 Social Influence + The Impact of Corporate Social Responsibility

What are some Social Influence that affect business decisions?

1. Social mobility

2. Education outcomes

3. Gender equality

4. Employment patterns

5. Multiculturalism

What is Social mobility?

Social mobility refers to how easily someone can climb from a low-income or low-status background to the middle or top of society

How does high & low social mobility affect the availability of skilled workers?

1. High - There is a large pool of educated, healthy workers, making recruitment easy & cheap.

2. Low - There is a smaller pool of skilled labour, so firms must compete, pay more or import talent.

How does high & low social mobility affect wages and labour costs?

1. High - Pay gaps are smaller and more predictable, so labour costs remain steady.

2. Low - Large pay gaps develop because low-skilled labour is cheap, while top talent is expensive.

How does high & low social mobility affect the size of the customer market?

1. High - More people move into the middle class, creating broad and reliable demand for goods and services.

2. Low - Spending power is concentrated among a few wealthy groups, so firms target budget or luxury segments.

How does high & low social mobility affect start-ups and innovation?

1. High - People with good ideas can access education and funding, leading to more start-ups and new ideas.

2. Low - Class, caste (a fixed, hereditary social group into which a person is born) & location barriers can prevent people from pursuing ideas, resulting in fewer businesses and slower innovation.

How do high & low education levels affect skilled worker supply?

1. High - There is a large pool of well-qualified workers, especially in maths and science, making hiring easier.

2. Low - There is a shortage of engineers, IT and health workers, making vacancies harder to fill.

How do high & low education levels affect training and recruitment costs?

1. High - New recruits are more work-ready, so firms spend less time and money on basic training.

2. Low - Companies need extra training or may recruit overseas, increasing costs.

How do high & low education levels affect innovation and investment?

1. High - Talented workers attract technology, biotech and finance firms, encouraging R&D and investment.

2. Low - Skills gaps make global investors cautious about setting up high-tech factories or research labs.

How do high & low education levels affect consumer spending power?

1. High - Graduate salaries create a broad middle class that buys a wide range of goods.

2. Low - Many workers are in low-paid jobs, limiting demand mainly to essential goods.

How does high & low gender equality affect the size of the talent pool?

1. High - Women take part in every occupation, so firms can choose from almost the whole population when hiring.

2. Low - Skilled women may be shut out of top jobs, making senior roles harder to fill and potentially making recruitment more expensive.

How does high & low gender equality affect productivity and new ideas?

1. High - Mixed-gender teams bring different views, leading to better problem-solving and faster innovation.

2. Low - Teams with similar backgrounds may think in the same way, which can slow innovation and problem-solving.

How does high & low gender equality affect a business's reputation?

1. High - Equal pay, flexible leave and gender-neutral adverts signal fairness, strengthening the brand and attracting investors.

2. Low - A large pay gap and few female directors can hurt the global image, and some investors may demand changes.

How does high & low gender equality affect legal compliance and costs?

1. High - Clear rules can lead to fewer discrimination claims.

2. Low - Stock-exchange quotas and mandatory pay-gap reporting can force rapid change. Firms that fall behind may face fines or bad publicity.

What are the changes in patterns of employment

1. Growth of part-time and flexible hours

2. Expansion of gig & zero-hour contracts

(gig - workers paid per task/job eg. delivery drivers, zero - no guaranteed min hrs, only working when employer needs them)

3. Move to remote, hybrid and four-day weeks

(remote - working from home/ wherever) (hybrid - splitting time between working from home & in the office)

(four-day week - working 4 days a week)

4. New jobs in green and digital industries

5. Automation & AI reshaping tasks

6. Greater focus on work-life balance & employee wellbeing

How can Growth of part-time & flexible hours impact the business?

Adv- Bigger talent pool includes parents, students and retirees

Disadv - Rotas (work schedules that show which employees work, on which days, & at what times) and payroll (system a business uses to calculate and pay employees wages) are more complex

How can Expansion of gig and zero-hour contracts impact the business?

Adv - Lower fixed wage bills

Disadv - Harder to build loyalty and maintain consistent quality

How can the Move to remote, hybrid and four-day weeks impact the business?

Adv - Save money on office space + Can recruit staff from anywhere

Disadv - Need effective online communication

How can New jobs in green and digital industries impact the business?

Demand is rising for skills in renewable energy, electric vehicles, cybersecurity, cloud services and e-commerce

Adv - New markets open up

Disadv - Shortage of skilled staff can push wages up

How can Automation & AI reshaping tasks impact the business?

Adv - Faster output and lower long-term costs

Disadv - High up-front technology investment spending and staff retraining.

How can Greater focus on work-life balance and employee wellbeing impact the business?

Adv - Better morale and fewer sick days

Disadv - Extra cost if financial benefits are improved

Whats Multicultural Society

A multicultural society is one where many cultural, ethnic & religious groups live side by side and are recognised as equal

--> Eg. Customers, employees & suppliers may bring different languages, values, tastes and traditions

How does multiculturalism affect product design and ranges?

Businesses needs to adapt flavours, sizes and features to suit different preferences

e.g. halal menus, skin-tone cosmetics and multilingual packaging.

How does multiculturalism affect marketing & branding?

Businesses will need to use inclusive images and language, avoid stereotypes, and plan campaigns around festivals such as Diwali, Ramadan and Lunar New Year.

How does multiculturalism affect customer service?

Businesses need to train staff in cultural sensitivity, offer interpretation, and respect religious dress or service needs.

How does multiculturalism affect human resources?

Businesses can recruit from a wider talent pool, support faith-based leave, and use flexible dress codes.

How does multiculturalism affect team communication?

Businesses need to provide clear language guidelines and cross-cultural teamwork training and mentoring.

How does multiculturalism affect location and supply chains?

Businesses may need to open outlets in multicultural areas, source authentic ingredients, and work with minority-owned suppliers.

How does multiculturalism affect legal compliance and reputation?

Businesses must follow equality laws & demonstrate corporate social responsibility.

Corporate social responsibility (CSR)

Corporate social responsibility (CSR) refers to the concept that businesses have a responsibility to consider and positively impact society

What are the examples of socially responsible activities

1. Protecting the environment --> Starbucks gives customer discount when they bring a clean reusable cup into its US stores

2. Responsible marketing --> The LEGO Group does not directly advertise to under-12s and send clear, age appropriate msg in communication

3. Responsible customer service --> Costco offers a 100% satisfaction guarantee, products can be returned at any time for a full refund

What is business ethics?

The rights and wrongs of business decisions that go beyond legal requirements.

What is an ethical code of practice?

Guidelines that help a business make responsible decisions and behave ethically.

What might an ethical code of practice cover?

- Environmental responsibility

- Fair working practices

- Fair supply chains

- Eliminating corruption

- Ethical accounting

- Avoiding controversial products

What are social audits?

Annual reviews that check the steps a business is taking to meet its ethical and social commitments.

How can CSR affect employee and customer loyalty?

It can create long-term loyalty from both employees and customers

How can CSR give a business a competitive advantage?

Being seen as a responsible business can make it more attractive than competitors.

How can CSR affect the local community and government?

Businesses may receive greater support from the local community and government.

How can CSR affect employees?

Employees may be more motivated, loyal and productive because they are proud to work for a responsible business.

How can CSR affect suppliers and competitors?

They may become more ethical themselves so they don't lose sales to more ethical businesses.

What is a disadvantage of taking an ethical approach?

It costs more and may reduce profits if the business cannot increase prices to cover the extra costs

What is a business's community?

Everyone affected by its activities, including local residents, employees and families, customers, suppliers, schools, charities and local government.

Why is community support important to a business?

It gives the business a social licence to operate. Without it, projects can be delayed, boycotted or shut down.

How does listening to the community improve reputation and brand loyalty?

It can lead to positive media coverage, word-of-mouth and higher customer retention.

What can happen if a business ignores the community?

It can face negative headlines, social-media backlash and long-term brand damage.

How can listening to the community increase customer demand?

Businesses can provide ethical, eco-friendly and inclusive products that communities prefer.

What can happen if a business ignores customer/community preferences?

Sales can fall as customers switch to rivals or start a boycott.

How can community support help a business attract investment and talent?

Many investors and job-seekers prefer responsible firms.

What can happen if a business has a poor reputation in the community?

It may face a higher cost of capital and have difficulty recruiting staff.

What is a pressure group?

An organisation that tries to influence businesses or governments in favour of a particular cause.

What causes might pressure groups support?

Animal welfare, climate action and workers' rights

What tactics do pressure groups use?

Petitions, social media campaigns, protests, strikes, sit-ins, lobbying politicians, buying shares and legal action.

How can consumers act as a pressure group?

Through buying behaviour, social media, direct feedback and boycotts.

How has Greenpeace influenced businesses? An example of Pressure Grp Influence

It has used direct action, helped secure a worldwide ban on commercial whaling (1982) and pushed retailers to remove microbeads from toiletries (2018).

How did a consumer boycott affect Nike?

Campaigners highlighted sweatshop labour, leading Nike to publish supplier lists and raise factory standards.