Ethical Objectives and Corporate Social Responsibility (CSR)

1. Define
Ethics - the moral principles and values that society believes organizations should consider in their decision-making and strategies.
Morals - a society's view of right and wrong actions.
Corporate Social Responsibility - A business which acts morally towards ethical and environmental issues within the various stakeholder groups.
Social Auditing - an independent assessment including a review of a businesses environmental impact, staff management and contributions to society to ensure socially responsible objectives are being met.


2. Three Examples of Unethical Business Behaviour:
a) Financial Dishonesty - this encompasses illegal deliberate misinterpretation of financial accounts as well as morally unjust issues with business expenses being reimbursed to directors of companies.
b) Exploitation of the workforce - Encompasses the exploitation of employees in areas such as neglect of welfare issues, poor pay and unjust working conditions.
c) Exploitation of consumers - This is when firms knowingly exploit people or society by selling harmful products as well as charging excessive prices.


3. Advantages and Disadvantages of Businesses which behave ethically
Advantages:
- Improved Corporate Image - enhances the businesses reputation through treating employees fairly as well as being environmentally friendly.
- Increased Customer Loyalty - businesses build larger customer base though ethical and moral ideals of their objectives and actions.
- Cost Cutting - by being conscious of the environment (e.g. recycling, reduced excess packaging) businesses can often reduce some costs of production as well as reduce the risk of litigation costs from illegal actions.
- Improved Self Motivation - drives employees motivation, productivity and loyalty as they are working for an ethically and morally positive business as well reducing labour turnover.
- Improved Staff Morale - recruitment and retainment of motivated, quality staff as more want to work for business with strong ethical stance.

Disadvantages:
- Compliance Costs - acting ethically could be far more expensive due to additional money and time needed to produce the ethically supportive products (e.g. organic food is more expensive to harvest).
- Lower Profits - Higher prices due to compliance costs which in turn could cause an ethical dilemma where the business could need to adopt a less profitable course of action.
- Stakeholder Conflict - Organizational objectives within the various stakeholder groups could be different (e.g. financial investors are more concerned with the short-term profits as oppose to the firm's ethical stance).


4. How CSR helps a Business compete
The social responsibilities of a business play an important role in their corporate image.

5.Why Social Auditing is undertaken by a Business

Franshising Case Study

1. When starting up a business, the factors which need to be addressed include the following; the business idea, finance, human resources, enterprise, fixed assets, suppliers, customers, marketing and legal issues. However, a franchise is an already established business which a franchisee chooses to be apart of, working on the franchisor's business model. This lacks innovation due to the fact that the franchisor has already established a business idea which has been tested and proved succesful. In terms of finance, though the franchisee funds the franchise the start-up costs are lower as the franchisor has already developed, for example, market research and product development. Adding to this, there is less risk as the franchisee has a succesful model to work from, reducing the risk of loosing money as they can predict the success of the franchise. Human resources, enterprise and suppliers are all factors taken care of by the franchisor in the sense that they are already established with no need for the franchisee to deal with these aspects. The franchisee chooses the location which is another risky factor, yet working on the established business model, the franchisee can predict an estimated amount of revenue depending on the local market hence the amount of sales can be approximated. Adding to this, the franchisor has attracted customer's to their business and is in charge of, for example, promotional campaigns therefore the franchisee has little or no say in these. Another aspect to consider is that it is in the best interest of the franchisor for the franchise to be succesful therefore they will assist the franchisee with what could be services giving advice on financial management as well as providing training to staff. Setting up a franchise therefore lacks the entrepreneurial aspects of setting up a business. Though a franchisee may benefit from experiencing the day-to-day workings of owning a business, they have very little to think about in terms of setting up a business.


2. Baseball has become a huge money-making industry and no longer just a sport. The point to consider is that even if the team isn't succesful in the game of baseball, the business enterprise itself can gain revenue from anything from the tickets sold, car parking costs, merchandising and so on. Furthermore, rewards of succesful management of any team results in revenue which is not necessarily influenced by the success of their game. For example teams with vulnerability of being bought off by Portland Oregan include the former 'Expos' because they are one of the cheaper teams to buy, with reasonable operating income and current value as well as the lowest revenue (according to forbes statistics). This will make it easier for Portland Oregan to secure a cheaper bid - a benefit for their business. Their next step would be to improve the management and possible revenue from factors outside the game such as the above mentioned merchandising, number of tickets sold etc... Therefore, though there are many factors to consider when a bidder chooses a team, they are able to estimate which team is cheaper to buy yet reasonable current value - basically a balance of various factors mentioned above.


3. If the English Soccer Premier League were to become franchisers just like MLB Inc. they would gain further control of the football industry within the UK, focusing on the business aspects.