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  • Ethical Behaviour
    • Advantages
      • Improved Corporate Image - Acting ethically and socially responsible enhances image and reputation. Media report unethical behaviour damaging firm's corporate image
      • Increased customer loyalty - More likely to be loyal to business that does not act immoral. Body Shop large customer base ethical policy of not testing products on animals
      • Cost cutting - Ethical behaviour cut certain costs [reduce excess packaging]. Socially responsible businesses avoid litigation costs due to unethical and irresponsible business activities
      • Improved staff morale and motivation - Ethical and social responsible businesses attract and retain highly motivated staff. People more likely to be proud because actions ethical and within law. Driving force for improved productivity and employee loyalty
    • Limitations
      • Compliance costs - Costs of social responsibility very high [organic agricultural products more expensive to harvest because of additional time and money]
      • Lower profits - Higher prices for consumers will result from compliance costs [profits fall]. Ethical dilemma - ethical decision-making involves adopting a less profitable course of action
      • Stakeholder conflict - Don't want to adopt CSR because clash with profit maximisation  Speculative stakeholders and financial investors focused on short term profits over ethical stance so managers pursue set out goals and not ethical goals
      • Ethics and CSR are subjective - Views about right/wrong depend on beliefs and principles of individuals & society. Legislation provide guidelines about what is socially accepted


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