1. Social Responsibility
Chapter 23

2. Aims of this chapter Definition of ethical business practice.
The characteristics of an environmentally conscious company.
The impact of environmental issued on business.
Social responsibilities of business.
The effect on a firms costs of meeting its ethical, social and environmental responsibilities.

3. Business Ethics

4. Business ethics
Business ethics are moral principles that govern the actions of individuals or groups of business people.
Ethical business practice means carrying on your daily business in an honest, fair and reasonable way.

5. Social responsibilities of a business
A code of ethics should guide management and staff in their decision making and day-to-day dealings with:
Employees
Customers
Suppliers
Shareholders
The government
The public
The environment
Homework:
For a business of your choice, analyse their social responsibility and duties to their stakeholders.

7. Social responsibility
Examples of socially responsible businesses.

13. Shareholders/Investors
Shareholders are entitled to a fair return on their investment.
The directors are obliged to run the business in the best interests of the shareholders.
Shareholders are entitled to be kept sufficiently and honestly informed.
Business should act in accordance with the memorandum and articles of association.

15. Employees Employees are entitled to be paid fairly for work done.
Employees should be provided with healthy and safe working conditions.
Employees should be seen as partners in business rather than a resource to be exploited.

16. Customers
Customers are entitled to goods and services of high quality.
Customers are entitled to goods and services which conform to all required safety standards.
Customers are entitled to be charged a fair price based on the quality of the product.

17. The local community
The general public have a right to a clean and healthy environment free from noise and air pollution.
Firms should ensure that their buildings are in keeping with local architecture.
Firms should provide adequate parking for staff so that traffic disruption is minimised.

18. The Government Firms must pay all relevant taxes in full and on time.
Firms must obey all legislation passed by government that affects the business of the firm.

19. The Environment
Firms have a responsibility to do everything they can to protect from damage the environment in which they operate.
Products should be environmentally friendly, and packaging should be capable of being recycled.
Proper waste control systems should be put in place.

20. Pollution
Pollution means introducing into the environment chemical substances that endanger human health and alter the environment

21. Climate change
The burning of fossil fuels causes greenhouse gases such as carbon dioxide released into the atmosphere.
Businesses can contribute to the solution by using cleaner fuels, recycling waste, reducing emissions and using renewable energy.
Climate Change Talks
Arctic Sea Passage

22. Sustainable Development
This refers to a form of development that meets present-day needs without compromising the ability of future generations to satisfy their own needs.
City of the future – China

23. Waste Management
Business has a responsibility to minimise the amount of waste it produces.
Business and individuals must find ways to reduce, reuse and recycle.

24. Characteristics of an Environmentally Conscious Firm
Eliminate pollution:
The firm will ensure that none of the production activity carried out in the plant contributes to river or air pollution.
Concern for Environment:
The management of the firm will have a genuine concern for the local environment in which the firm operates.
Recycling:
The firm will try to ensure that as much of its end product as possible can be recycled.
Fair price:
The firm will not exploit countries of the developing world by paying low prices for materials, or buying from firms that engage in child labour.

25. Characteristics of an Environmentally Conscious Firm
Contingency plans:
The firm will have devised and put in place contingency plans and procedures to be followed in the event of any incident occurring.
Care and safety:
The firm will give priority to product safety and customer care in the production process. It will ensure all materials used are environmentally friendly.
Sponsorship:
The firm may actively engage in programmes to improve the local environment, such as school environmental programmes, local tree planting initiatives etc.

26. Costs for Business Wage costs: Materials: Upgrading systems:
Paying a decent wage and providing good working conditions for employees. E.g. Fairtrade.
Materials:
Paying the market price for raw materials and resisting the temptation to buy from firms who exploit the people from countries in the developing world.
Upgrading systems:
The cost of upgrading manufacturing and production systems so that they fully comply with environmental standards.

27. Costs for Business Waste disposal: Environmentally friendly products:
The cost of measures taken to effectively deal with all the waste from the factory.
Environmentally friendly products:
The cost of adapting existing products to make them environmentally friendly.
Sponsorship:
The cost of sponsoring local events and of dealing with local issues and concerns.

28. Resources Water Wastage To Make: 1 T-shirt = 20,000 litres
1 slice of bread = 40 litres
1 pair of jeans = 8,000 liltres
1 kg rice = 1,900 litres of water
1 quarter pounder releases as much carbon dioxide as driving a car 15 kilometres
The average desktop computer uses at least 240kg of fossil fuels, 22kg of chemicals, and 1500kg of water.
For every one million mobiles recycled, we can recover 30kg of gold, 300kg of silver, 15,000 kg of copper, and large amounts of zinc, tin and platinum
UK households discard 8.3million tons of food a year.