Business Studies SACE Stage One

Ethics and Social Responsibility A business must plan to operate its business in an ethical and socially responsible manner How an owner deals with a range of ethical issues will usually be reflected in how their businesses operate. Basically, a person who is prepared to lie and deceive to their friends will most probably due the same in their business dealings. There are two types of approaches/models to dealing with ethical and socially responsible management

The economic (traditional model) Definition:” Businesses exist to produce products, earn a profit and provide employment. Society will gain the most benefit if a business is left alone to produce and market products that are in demand The economic model of social responsibility therefore believe that society will gain the most benefit if a business is left alone to produce and market products that are in demand. Businesses will naturally attempt to maximise profits, and the more profitable the business the more they can expand and create more employment opportunities. As businesses create more profit they pay higher amounts of tax, and this tax is used by the government to invest further in public goods such as schools, hospitals and general infrastructure.

The socio-economic model A philosophy that businesses have a responsibility to not only the business but also to their employees, suppliers, customers and society. Emphasis is not only on profit but the impact of the business on the whole of society 3 Main Reasons for its acceptance 1. Society has greater expectations of business behaviour. 2. Many businesses are taking pride in their record of social responsibility 3. Many business owners believe it is more beneficial to become socially responsible. 3. The idea of enlightened self interest - the belief that a business idea helps itself when it helps to solve society’s problems.

Planning for the Triple Bottom Line Triple Bottom Line: Refers to the economic, environmental and social performance of a business. Businesses that take their social and ethical responsibilities seriously are often rewarded with improved business performance. Research shows that businesses who plan to implement strategies that best improve the triple bottom line outperformed other businesses in similar markets.

Corporate Social Responsibility At the commencement stage, a small business owner should plan to develop a corporate social strategy to achieve triple bottom line results. The small business owner’s personal values greatly affect leadership and willingness to be socially responsible Being socially responsible should be a part of the businesses daily operations and should not be viewed as a burden Small business owners need continual guidance in this area for small business owners] https://www.youtube.com/watch?v=Z5KZhm19EO0