Business EnvironmentAnd Social ResponbilityLecture Notes 02Dr. Fahmy Radhi, MBA

Business EnvironmentBusiness Environment is individual and organization that exist outside the business and have influence direct and indirect to the business.

Business Environment ElementsSupplier supply materials, machine, service and information used to produce its products and servicesFinancial institution the capital resources that available for the firmCustomers targets for the firm to market its products and servicesCompetitor - all of the entities that compete with the firm in marketplace

Business Environment ElementsStockholders/owners persons who are invest money in the firm and represent the high level of managementlabor union organization of skilled and unskilled workersThe community people in the area where the firm perform its operationGovernment federal, state and local level government that provides not only constraints in the form of law, regulation, and taxes taking but also provides assistance in form of purchases, information and funds.

Social Responsibility The awareness that business activities have an impact on its environment so it should try to balance its commitment in its environmentA businesss obligation to maximize its positive impact and minimize its negative impact on society

2-*Arguments for Social ResponsibilityBusiness helped to create many of the social problems that exist today, so it should play a significant role in solving themBusinesses should be more responsible because they have the financial and technical resources to help solve social problemsAs members of society, businesses should do their fair share to help othersSocially responsible decision making by businesses can prevent increased government regulationSocial responsibility is necessary to ensure economic survivall Businesses must take steps to help solve the social and environmental problems that exist today

2-*The Pyramid of Social ResponsibilityEthical Responsibilities being ethical; doing what is right, just, and fair; avoiding harmVoluntary Responsibilities being a good corporate citizen; contributing to the community and quality of lifeSource: Adapted from Archie B. Carroll, The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders. Business Horizons 34 (July/August 1991): 42.Legal Responsibilities obeying the law (societys codificationof right and wrong) Economic Responsibilities being profitable

Motivation for going greenCompetitive advantageEcological responsibility (moral commitment)Legitimacy (approval of the regulator

How to implement green managementTop management with a commitment to sustainabilityLine manager involvementCodes of environmental conductCross functional teamsRewards and incentives

How green management become competitive advantage?Cost savingReduction of pollution, waste and use more recycle materials means greater energy efficiency which can reap more cost savingsProduct differentiationGreen marketing: sustainable products and services to attract environmentally aware customersTechnological innovation

Social ResponsibilityResponsibility to consumers, such as: the right to safety, the right to be informedthe right to choose, the right to be heardResponsibility to employees, such as: The right to safety The right to equality in the workplace,The right to improve its capability

Social ResponsibilityResponsibility to investors, such as: The right to be proper management of funds The right to access informationResponsibility to the environment, such as Preventing to water and air pollution, Safe to the land and Forestnatural resourcesSocial responsibility, such as Community support Social audit

Social SupportSponsorship Program designed to reach and interest target publicScholarshipDonation

Public service activitiesCompanies can improve public goodwill by contributing money and time to public service activities.