Ethical Objectives and Corporate Social Responsibility

1)Define
a) Ethics - moral principles that guide decision-making and strategy
b) Morals - relates to what is considered to be right or wrong, from people's points of view
c) Corporate Social Responsibility - socially responsible firms that act morally towards stakeholders (employees, local community)
d) Social Auditing - independent assessment of a firms actions affecting society. for example, could include a firms environmental impact.

2) Give 3 examples of unethical business behavior.
- financial dishonesty - deliberate misrepresentation to make money
- environmental neglect - harmful to environment
- exploitation of the workforce - mistreatment of staff

3) What are the advantages and disadvantages for business who behave ethically?
Advantages include:
-improved corporate image - increased reputation of business
-increased customer loyalty - more loyalty shown towards those companies that follow ethics and follow certain morals.
-cost cutting - costs of production could be decreased using ethics
-improved staff motivation - ethical behavior can help motivate employees to work harder and honestly
-improved staff morale - this includes the ability to recruit higher quality staff who are willing to work for a business that follows ethics and are morally stable.

disadvantages include:
-compliance costs - high costs for businesses acting ethically
-lower profits - if no compliance costs are charged, profit is under question.
-stakeholder conflict

4) How does CSR help a business compete?
CSR improves a firms reputation because of their desire to act in a socially responsible way. This, therefore, means better sales and more investors for the company. Hence leading to more money and profit. An example of a successful business is the Body Shop. It is certainly a trustworthy business.

5) Why is a social audit undertaken by business?
Businesses undertake social audit to make sure the socially responsible objective are in action. Businesses undertake this to see how it's actions are affecting the society.

Franchises case study

1) To what extent is a franchise opportunity a true reflection of what it is like to set up and run a business?

A franchise is another type of business in which a firm buys an already successful firm, therefore, buying its logo, trademark and brand. However, in a business, you must start from scratch and earn a reputation for the firm. When opening a business, the owner is taking a dangerous risk because he/she does not have the benefit of hindsight. The business could be successful or may not be. However, franchises are already successful and well settled in the market. However, similar to a business, purchasing franchises could lead to success and create profit. On the other hand, it could fail and therefore lead to a loss. In a business, if not successful, this could lead to the owner losing money while if a franchise is not successful and goes through losses, the business is at risk, not the owners money.

2) A success of a team does not only rely on whether the team has amazing players or moderate players. However, teams can still make money by pricing different aspects at different rates to generate revenue. For example, with home crowd spirit, purchasing the teams official jersey and food outside stadiums could generate revenue for poor performing teams as well. Washington Nationals, previously known as Expos, are a poor performing team and is the most vulnerable to being to sold to a rival bidder. This is because the team's statistics are not impressive as shown on forbes. The team has the lowest revenue. Compared to another poor performing team, such as Tampa Bay which has a revenue of 110 millon, Washington Nationals are certainly in a worse position. The change in revenues for Washington Nationals is approximately 114%. This could be seen in a positive manner because it is a huge change compared to good teams. However, negatively, it could be seen as the revenues last year were even lower. Therefore, Washington Nationals is the most vulnerable to be sold to a rival bidder such as Portland Oregon.

3) Starting the franchise in another country could enhance the image of the franchise. If the English Premier League decided to promote itself in a different country, for example, India, it would promote the English Premier League itself as well as the sport. This could generate interests in different sports and therefore, increase total income. However, for a successful run, there should be enough number of teams participating to make it a success. This steps of enhancing could lead to more exposure to the media and therefore, more popularity and advertising.