OUTCOMES OF SOCIAL RESPONSIBILITY INVOLVEMENT EXPECTED BY EXECUTIVES Sunday, Dec 7 2008 

POSITIVE OUTCOMES:

  1. Enhanced corporate reputation and goodwill.
  2. Strengthening of the social system in which the corporation functions.
  3. Strengthening of the economic system in which the corporation functions.
  4. Greater Job satisfaction among all employees.
  5. Avoidance of issues with government regulations.
  6. Greater job satisfaction among executives
  7. Increased chances for survival of the firm.
  8. Ability to attract better managerial talent.
  9. Increased long term profitability.
  10. Strengthening of the pluralistic nature of American Society.
  11. Maintaining or gaining Customers
  12. Investor Preference for socially responsible firms
  13. Increased short term profitability

 

NEGATIVE OUTCOMES:

  1. Decreased Short term profitability
  2. Conflict of economic or financial and social goals.
  3. Increased prices for consumers
  4. Conflict in criteria for assessing managerial performance
  5. Disaffection of stock holders.
  6. Decreased Productivity
  7. Decreased Long term profitability
  8. Increased Government Regulation
  9. Weakening of the economic system in which the corporation functions.
  10. Weakening of the social system in which the corporate functions.

 

STAKEHOLDERS:

 

SOCIAL OBLIGATIONS OF THE MANAGERS TO VARIOUS STAKEHOLDERS :

  1. STOCKHOLDERS: To increase the value of the organization.
  2. SUPPLIERS : To deal with them fairly
  3. BANKS & LENDERS: To replay debts
  4. GOVERNMENT AGENCIES: To abide laws.
  5. EMPLOYEES & UNIONS: To provide safe working environment and to negotiate fairly with union representatives.
  6. CONSUMERS: To provide Safe Products
  7. COMPETITORS: To compete fairly and to refrain from restraints of trade.
  8. LOCAL COMMUNITIES & SOCIETY: To avoid business practices that harm the environment.
Advertisements

KEITH DAVIS MODEL OF CORPORATE SOCIAL RESPONSIBILITY Saturday, Dec 6 2008 

Davis’s model is a list of 5 propositions that describe how and why businesses should adhere to the obligation to take action that protects and improves the welfare of society as well as of the organization:

Proposition 1: SOCIAL RESPONSIBILITY  ARISES FROM SOCIAL POWER.

This proposition is derived from the understanding that a business has significant amount of  influence on and power over various critical issues like Environment, Minority Employment, Neighbourhood Development etc.,

All business in the country primarily determines the various situations like employment,environment and overall atmosphere that the citizens get to live in.

Since business has power and influence over the society, the society can and should hold the businesses responsible for social conditions that result from the exercise of the power.

Proposition 2: BUSINESS SHALL OPERATE AS A 2 WAY OPEN SYSTEM, WITH OPEN RECEIPT OF INPUTS FROM SOCIETY AND OPEN DISCLOSURE OF ITS OPERATIONS TO THE PUBLIC.

Business must be willing to listen to what must be done to sustain or improve social welfare. In turn, the society must be willing to listen to business reports on what is is doing to meet its social responsibilities.

DAVIS suggests that there must be ongoing, honest and open communications between business and society’s representatives if the overall welfare of society’s representatives if the overall welfare of society is to be maintained or improved.

Proposition 3: THE SOCIAL COSTS AND BENEFITS OF AN ACTIVITY, PRODUCT or SERVICE, SHALL BE THOROUGHLY CALCULATED AND CONSIDERED IN DECIDING WHETHER TO PROCEED WITH IT.

The technical feasibility and economic profitability and the shot term and long term consequences of all business activities should be considered before undertaking them.

Proposition 4: THE SOCIAL COSTS RELATED TO EACH ACTIVITY, PRODUCT OR SERVICE SHALL BE PASSED ON TO THE CUSTOMER:

The proposition states that business cannot be expected to completely finance activities that may be socially advantageous but economically disadvantageous. The costs of maintaining socially desirable activities within business should be passed on to consumers through higher prices for the goods or services related to these activities.

Proposition 5: BUSINESS INSTITUTIONS, AS CITIZENS, HAVE THE RESPONSIBILITY TO BECOME INVOLVED IN CERTAIN SOCIAL PROBLEMS THAT ARE OUTSIDE THEIR NORMAL AREAS OF OPERATION: –

If a business possesses the expertise to solve a social problem with which it may not be directly associated, it should be held responsible for helping society solve that problem.

Since the business eventually will reap an increased profit from a generally improved society, businesses should share in the responsibility of all citizenry to generally improve society.

BUSINESS & ENVIRONMENT Tuesday, Dec 2 2008 

The process of producing goods forces businesses to engage in exchanges and interactions with 2 main environments ie. the customer environment and the natural environment.

It is from the natural environment that business ultimately draws the raw materials that it transforms into it the finished products, which are then promoted and sold to the customers. 

Thus, the natural environment provides the raw material input of business, whereas the consumer environment absorbs it finished output.

POLLUTION:

The undesirable and unintended contamination of the environment by the manufacture or use of commodities.

RESOURCE DEPLETION:

The consumption of finite or scarce resources.

GLOBAL WARMING:

The increase in temperatures around the globe due to rising levels of greenhouse gases.

GREENHOUSE GASES:

Carbon dioxide, nitrous oxide, methane and chlorofluorocarbons – gases that absorb and hold heat from the sun,preventing it from escaping back into space, much like a greenhouse absorbs and holds the sun’s heat.

OZONE DEPLETION:

The gradual breakdown of ozone gas in the stratosphere above us caused by the release of chlorofluorocarbons (CFCs) in to the air.

ACID RAIN:

Acid rain occurs when sulfur oxides and nitrogen oxides are combined with water vapour in clouds to form nitric acid and sulfuric acid.

These acids are then carried down in rainfall.

PHOTOCHEMICAL SMOG:

A complex mixture of gases and particles manufactured by sunlight out of the raw materials- nitrogen oxides and hydrocarbons – discharged to the atmosphere chiefly by automobiles.

MAJOR TYPES OF AIR POLLUTION:

  • Global Warming Gases
  • Ozone depleting Gases.
  • Acid Rain
  • Airbone Toxics
  • Air Quality

ORGANIC WASTES:

Largely untreated human wastes,sewage,and industrial wastes from processing various food products,from the pulp and paper industry and from animal feedlots. 

ECOLOGICAL SYSTEM:

An interrelated and interdependent set or organisms and environments.

ECOLOGICAL ETHICS:

The view that nonhuman parts of the environment deserve to be preserved for their own sake, regardless of whether this benefits human beings.

PRIVATE COST:

The cost an individual or company must pay out of its own pocket to engage in a particular economic activity.

SOCIAL COST:

The private internal costs and wider external costs of engaging in a particular economic activity.

 

KINDS OF ETHICAL APPROACHES TO ENVIRONMENTAL PROTECTION:

  • Ecological approach: non humans have intrinsic value.
  • Environmental Rights Approach: Humans have a right to a livable environment.
  • Market Approach: External costs violate utility, rights and justice.

INTERNALIZATION OF THE COSTS OF POLLUTION:

Absorption of costs by the producer, who takes them into account when determining the price of goods.

ENVIRONMENTAL INJUSTICE:

The bearing of external costs of pollution largely by those who do not enjoy a net benefit from the activity that produces the pollution.

SOCIAL AUDIT:

A report of the social costs and social benefits of the firm’s activities.

CONSERVING:

The saving or rationing of neutral resources for later uses.

Arguments against the Existence of the Rights of Future Generations:

  • Future generations do not now exist and may never exist.
  • The potential argument that the present must be sacrificed fot he future.
  • Our ignorance of the interests of future generations.

CONSERVATION BASED ON JUSTICE:

  • Rawls: Leave the world no worse than we found it.
  • Care: Leave our children a world no worse than we received.
  • Attfield: Leave the world as productive as we found it.