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Business Ethics Essential Guide A-level

Unit 1 Business Ethics Essay Questions (including CSR, Triple Bottom Line, Stakeholder Concept) come up time and time again in A-level exams.

 

Here we look at the essential information you need to know, including easy to remember examples and give expert advice on maximising your marks on an essay question on CSR.

 

Don't forget to watch to the end to pick up the insider hacks to boost your grade in Cambridge International A-level Business.

Past Paper Download

Winter 2018 Paper 11

Discuss why the shareholders of a public limited company might disagree with having

corporate social responsibility (CSR) as a business objective. [12] w18p11

Shareholders want to make short term profits. Corporate Social Responsibility -  the interests of society by taking responsibility for the impact of their decisions - can increase business costs therefore reducing profits for shareholders. 

Netflix offers  52 weeks of paid parental leave to all it’s staff. This will significantly increase labour costs as Netflix will have to pay for the staff who are spending time with their kids and hire a replacement. The decreased profits could mean shareholders dividends are reduced and/or less retained profit to fund future growth

However, this CSR policy could be beneficial to Netflix as it allows them to attract the best staff, reduce turnover as staff don’t want to motivate employees and will motivate employees as it shows Netflix care about the wellbeing of staff and their families.

Furthermore, CSR may distract shareholders from focusing on their core objectives. For CSR to work effectively leaders throughout an organisation must consider the impact of all of their decisions on the environment and local community. For example, Unliver's aim to be "a force of change for the good in the world" will require managers t analyse each decision they on the basis of CSR, and they may miss profitable opportunities as due to potential conflicts with other stakeholders

However, if CSR is embedded in the corporate culture, Unilever can benefit from enhanced reputation and decrease the exposure to legal action or corporate scandals - which can lead to stable long term growth.

 Shareholders may disagree with CSR as an objective if they are seeking short term returns and high dividends. However, if they take a longer term view - the costs associated with CSR with be off set with higher longer term growth. Furthermore, there is a growing consensus among CEO's that thinking only in a corporations interests is fundamentally damaging to society and the environment in the long term. Therefore in order to secure the stabilty and prosperity of the business environment in the future, shareholders should adopt CSR as a business objective.