1. Assessing Changes in the Business Environment The Relationship between Businesses and the Social Environment
“We can be richer by being greener.”
Tony Blair
“A well run business must have high and consistent standards of ethics.”
Richard Branson
“Customers must trust an organisation and its people.”
Tom Farmer
“Unless managers are aware of ethical issues…they will fail to institutionalise ethics in corporate life. Ignorance can be as pernicious as malice.”
Damian Grace
BUSS4.4 Social Environment

2. In this topic you will learn about
Assessing the effects of:
changes in the social environment
the changing nature of the ethical environment
Evaluating responses of businesses to a changing social environment including corporate social responsibility.
You tube
Ali G - Environment
We must respect the environment
BUSS4.4 Social Environment

3. Changes in the Social Environment
A Stakeholder is anyone that has an interest in an organisation. This is a very important concept, showing the impact of a firm not only internally, but also on wider society.
Stakeholders of a business
(Recap BUSS4.1)
The Stakeholder concept suggests that whether they accept it or not, firms have a responsibility to their stakeholders. The shareholder concept suggests that their main responsibility is to shareholders.
BUSS4.4 Social Environment 3

4. Changes in the Social Environment
The impact of demographic changes. How a firm might respond:
An increase in the global population size – an opportunity for UK firms to move into new markets with new or existing products
An increase in the average age of UK society – firms will have to change their product range to satisfy the needs of older people
Falling EU birth rates – as EU market size falls but the population gets richer UK firms might move into premium product markets
BBC
Migrants boost UK population
The UK population has grown by nearly one million in the past five years, largely because of imm
UK population sees steep rise
The population of the UK is rising at a faster rate than at any time since the 1960s, according to the Office for National Statistics. Nick Higham reports.
UK population breaks 60m
The UK's population has broken through 60 million for the first time, with the fastest growth rate for over 40 years.
Migrants boost UK population
How might UK businesses respond to these changes?
UK population sees steep rises
UK population breaks 60m
BUSS4.4 Social Environment 4

5. Changes in the Social Environment
Demography is the statistical study of human populations and demographic factors are those that influence these populations.
Firms will have to take into account population trends. These include:
An increase in the global population size
An increase in the average age of UK society
Falling EU birth rates
Study the population chart opposite
What are the main characteristics of the UK population?
Compare this to the Government’s description of the chart using the link below.
What does this mean for UK businesses?
Source:
BUSS4.4 Social Environment 5

6. Changes in the Social Environment
The environment encompasses the surroundings in which we live.
Firms will have to operate within and take account of environmental issues. This will include how they impact on:
The natural environment – the natural resources that firms exploit to produce goods and services
The built environment – the man-made surroundings that provide the setting for the production of goods and services
BBC
World's resources running out
The world is consuming so many natural resources that three planets will be needed to keep up with demand.
The World’s resources are running out
What natural resources do firms use?
Do firms have a duty to limit their use of natural resources?
Is it the Governments responsibility to intervene and protect these natural resources?
BUSS4.4 Social Environment 6

7. Changes in the Social Environment
There has been increasing pressure on firms to operate using environmentally friendly methods – minimal or no negative impact on the environment. The main methods of doing this include:
Renewable clean energy sources – wind, solar and hydro power
Waste management – recycling and composting rather than landfill
Eco-friendly products – green cleaning such as soap powders
Organic produce – foods produced using natural pest control
BBC
M&S boss on plastic bags
Marks and Spencer chief executive Stuart Rose on why the store is to begin charging its food shoppers 5p for carrier bags.
Plastic bags go out of fashion
Designers are tackling the problem of plastic bag pollution, as plans to ban free carriers are considered.
Youtube
LeeEvans Live at the O2 - supermarkets
M&S boss on plastic bags
Plastic bags go out of fashion
For the eco cynics! (contains swearing)
BUSS4.4 Social Environment 7

8. Changes in the Social Environment
“Corporate Social Responsibility (CSR) is the continuing commitment by business to behave ethically and contribute to economic developments while improving the quality of life of the workforce and their families as well as of the local community and society at large”.
The World Business Council for Sustainable Development
In essence, CSR (also referred to as simply social responsibility) is a firm’s decision to accept responsibility to its stakeholders for its social, environmental and ethical actions.
A firm will produce a Corporate Social Report to set targets that will be used to meet its social responsibilities and to assess how far it has met previous targets.
Business Link
Corporate social responsibility
Introduction
Your business doesn't exist in isolation nor is it simply a way of making money. Your employees depend on your business. Customers, suppliers and the local community are all affected by your business and what you do. Your products, and the way you make them, also have an impact on the environment.
Visit the Marks and Spencer website and review its Plan A
Read more about CSR
Watch the video outlining M&S progress to date
Identify the costs and benefits to M&S of its approach to CSR
BUSS4.4 Social Environment 8

9. Changes in the Social Environment
Business Ethics looks at morality in decision-making. This infers doing what is ‘right’. Of course, peoples’ views can differ on what is right or wrong. There will also be conflict between stakeholders.
Profits for a firm or higher wages for staff
Cheaper production or less pollution
Supplier benefits or lower consumer prices
Survival of the business versus needs of other stakeholders
Whenever a firm makes a decision there will be conflicts between stakeholders. Remember, every decision made has an opportunity cost.
How many dots? Follow this link to start a debate on ethics in the classroom. Introduce the theme, show the video and then wait for the discussion!
BUSS4.4 Social Environment 9

10. Changes in the Social Environment
Most large firms will produce an ethical code of practice. This will detail the steps that a firm will take to be ethical and to uphold the firm’s social responsibilities. This might include:
To take responsibility for the stakeholders of the business
To be environmentally friendly wherever possible
To promote products with integrity, honesty and accuracy
To compete within legal and moral guidelines
The Press Complaints Commission have a Code of Practice that all members should adhere to. Do you think that they do?
PCC
INTRODUCTION
The Editors' Code of Practice is published in full below. The Editor's Code is also available to download as a PDF here.
Daily Mail
Tesco condemned for selling pole dancing toy
by COLIN FERNANDEZ
Last updated at 23:13 24 October 2006
Comments (51)
Add to My Stories
Mother of two Karen Gallimore was searching for Christmas gifts for her two daughters, Laura 10, and Sarah, 11, when she came across the 'toy'
Tesco has been forced to remove a pole-dancing kit from the toys and games section of its website after it was accused of "destroying children's innocence".
Read more: 
ACTIVITY
The problem with Ethics is that it is subjective. This means that it is based on people’s values – and values are based on different people’s judgements. Read this article. Do you think that TESCO was right to sell this product?
BUSS4.4 Social Environment 10

11. Changes in the Social Environment
Is ethical behaviour simply a form of Public Relations (PR)? Why be ethical?
There are a number of reasons for a firm to have an ethical business culture.
These range from the profit motive to wanting to ‘do the right thing’.
Why be ethical?
Build loyal customer base through USP
Attract best workers who want to work for a company with high standards
Lower costs through recycling and less waste
Motivation across the company
Why not be ethical?
More expensive to source raw materials
More expensive capital goods to cut pollution
Training workers to be ethical costs money
Losing custom to unethical practices from more ruthless competitors
Providing better facilities for staff costs money
Higher costs lead to higher prices and lower revenues
IBE
Welcome The IBE was established in 1986 to encourage high standards of business behaviour based on ethical values. Our vision
To lead the dissemination of knowledge and good practice in business ethics.
Visit the Institute of Business Ethics to learn more. They even run a student essay competition
BUSS4.4 Social Environment 11

12. ACTIVITY
Chose a business that attracts high profile media attention e.g. Tesco, M&S, Primark, Nike, Gap, Shell
Carry out some independent research into its approaches towards its social responsibilities and/or its ethics
Produce an article for a business magazine evaluating how they have responded to social and ethical factors
BUSS4.4 Social Environment

13. Read Ben and Jerry’s Social Environmental Assessment Report
Essay
Ben and Jerry’s, makers of high quality ice cream since 1978, take their commitment to their social environment seriously. They state that “We believe its our duty to use our business to improve social, economic and environmental conditions around us.” With reference to Ben and Jerry’s and/or other businesses you have studied to what extent do you believe that the key to successful business today is social responsibility?
Ben & Jerry
Welcome to Ben & Jerry’s 2008 Social and Environmental Assessment Report. Here’s a glance at some of our most notable efforts from the past year to make positive change in the world through our business.
Read Ben and Jerry’s Social Environmental Assessment Report
BUSS4.4 Social Environment