Social Environment Chapter 23 Section B BUSS4 exam

This should help with the section B of the exam

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  • Created on: 22-04-15 09:46
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Key Theory
Ethics ­ set of moral values held by an individual or group, and making decisions that are morally right.
Public relations ­ activities which boost the public profile of an organisation, which then leads to an
increase in sales and profit
Corporate social responsibility ­ conducting business in an ethical way and in the interest of the wider
community. Responding positively to emerging societal priorities and expectations
Positive impact Why? Impact/Responses and
(WHO? WHAT?) Why was this decision made ­ what were the WHICH SHOWS?
Evidence/examples internal and external influences
Premier Farnell ­ UK Why? ­ Internal ­ When new employees join the This builds up the
based technology company teach them the care values of the businesses public image and
distribution business business as a starter. These include: makes them look better,
In the top 100 for Keeping the customers and suppliers at helping them to gain trust
being one of the the heart of everything that they do and this will therefore
most ethical Work as a team and together increase the sales of the
businesses in the Being innovative business.
world Because of these standards
Developing the firms people
and the number of suppliers
Integrity that they have, the business
Trust has been able to gain a 20%
market share in this market,
meaning they are a big
External ­ these policies and values are put into player in the market that
place, especially keeping the suppliers at the they operate in, making the
heart of the business because the business has market very competitive
over 3500 suppliers. Making this one of their core between Premier Farnell and
values means that the business is able to keep all 3 other bid players.
of their suppliers happy, and be achieving one of
their corporate goals at the same time.
Negative impact Why? Impact/Responses and
(WHO? WHAT?) Why was this decision made ­ what were the WHICH SHOWS?
Evidence/examples internal and external influences
GSK July 2012 ­ fined $3bn for "promoting The businesses shareholder
(GlaxoSmithKline) best-selling anti-depressants for unapproved Value was at 139bn in 2012
Pharmaceutical uses and failing to report safety data about a top but dropped to around
company which has diabetes drug." 129bn. Company wanted to
an enormous increase this and in the peak
product portfolio, osmithkline-agrees-to-pay-3-billion-in-fraud-settleme of 2014 before the fraud was
covering just about found. They reached a
nt.html?_r= The business were taking these
every disease that shareholder value price of
actions because they were unable to gain sales,
someone can think 156bn at the end of 2013/
to meet their targets and they were trying to
of beginning of 2014. This
gain more profits for the business, for
move affected their profits
overall and now their
shareholder values in
Profits made in 2012 - 2014
December 2014 went down
Made a loss of profit
to 125bn because they will
between 2011 and
have lost trust from the case
2012. Tried to make
of the fraud and because of
this up by wrongly
the huge payout that they
selling drugs to
had to make, which will have
customers. This
eaten into the profits that
worked and gained
the company had and the
them more profits that
shareholders income that
that they had received

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Depends upon factors/ key evaluation points
Depends on the objectives of the business as to whether the business is likely to be ethical or whether
they are going to be looking at the profit that the business can make, and as much as they can
Depends on what area the business works in within the economy, a company such as Hotel Chocolat is
more likely to be able to be ethical than Primark.…read more

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Good ethical behaviour ­ Premier Farnell
Poor ethical behaviour ­ GSK
http://www.gsk.…read more

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