Internal Environment

• Corporate Culture:

  The values and standards shared by people and groups within an organisation.
• These will impact on the way that people within the organisation interact with each other and with other stakeholders.
• The culture of a business affects the way in which the business operates.
• This includes:

  • Decision making
  • Organisational structure
  • Communication
  • Leadership styles
  • Attitudes towards work
  • Workforce performance
• Impact on staff motivation:

  • Communication
  • Retention
  • Workforce performance indicators
• Effects on decision making:

  • Speed
  • Level of involvement
  • Scientific v Intuition
• Competitiveness of the business:

  • Innovation
  • Adaptability
• Brand image:

  • Consumer perception
  • Stakeholder opinion
• Strong Culture:

  • Staff respond positively to organisational values
  • Shared sense of responsibility towards vision, mission and objectives
  • Motivated and loyal workforce
  • Greater efficiency
  • Accept roles and responsibilities willingly
  • Abide by policies
  • 'Everyone buys into it.'
• Weak Culture:

  • Little alignment with organisational values
  • Employees have to be forced to perform duties
  • Greater management control and supervision
  • Treat the organisation as a source of income only.
• "Corporate Social Responsibility(CSR) is the continuing commitment by business to behave ethically and contribute to economic developments while improving the quality of the workforce and their families as well as of the local community and society at large."
• CSR is a business' decision to accept responsibility to its stakeholders for it's social, environmental and ethical actions.
• Stakeholders include employees, customers, suppliers and the environment.
• One measure of CSR can be business' willingness to accept responsibility above and beyond it's legal duty.
• A business will produce a Corporate Social Report to set targets that will be used to meet it's social responsibilities and to assess how far it has met previous targets.
• Reasons for CSR:

  -Financial benefits

  -HR benefits

  -Marketing benefits

  -Operational benefits
• Financial benefits:

  -Ability to attract investments

  -Avoidance of fines and environmental taxes

  -Mistakes and bad PR are expensive
• HR benefits:

  -Recruitment and retention staff- attract a wider pool of talent and skills

  -Motivation of staff
• Marketing benefits:

  -Greater customer loyalty

  -Potential for differentiation and using CSR as a USP allowing for premium pricing.

  -Positive rather than negative media attention and PR

  -Recognition from external bodies e.g. Fair Trade foundation, Investors in people
• Operational benefits:

  -Lower production costs through efficient procedures and recycling

  -Positive relationship with suppliers
• All of these can result in a competitive advantage leading to success.
• Reasons against CSR:

  -Financial costs

  -Not meeting corporate objectives

  -Opportunity cost
• Financial costs:

  -Looking after employees e.g. training, pay and working conditions

  -Ethical suppliers, direct and throughout the supply chain

  -Product safety

  -Environmentally friendly practices throughout the business' operation

  -Appointing a director to be responsible for CSR
• Not meeting corporate objectives:

  -Short term shareholders' returns

  -Growth- entering new markets
• Opportunity cost:

  -Time spent on CSR, policies, reports and monitoring

  -Day to day functions
• Business ethics looks at morality in decision making.
• The infers to doing what is right.
• People's views can differ on what is right or wrong.
• Ethics in strategic decisions include:

  -Location decisions

  -Mergers, takeovers and retrenchment

  -Corruption

  -Working with suppliers
• Location decisions:

  -Ability to exploit workers

  -Impact on the environment
• Mergers, takeovers and retrenchment:

  -Impact on workers

  -Ability to exploit customers or control suppliers

  -Transparency of deals
• Corruption:

  -Dealing with authorities

  -Power over suppliers or customers
• Working with suppliers:

  -Ethical sourcing e.g. Fairtrade

  -Fair payment terms
• Environmental:

  -Responsibility to the planet

  -Air, water and noise pollution

  -Long term impacts e.g. global warming, non-renewable resources.
• Animal rights:

  -Not testing on animals

  -Animal welfare e.g. free range chickens
• Workers:

  -Non discriminatory treatment

  -Pay and working conditions

  -Workplace bullying

  -Fair preferences

  -Truthful information
• Suppliers:

  -Payment on time

  -Honour contracts

  -Not bullying small suppliers
• Customers:

  -Fair pricing, no exploitative

  -Truthful information

  -Supply chain transparency

  -Honest advertising