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Business Environment/DIPESH PATEL Chapter-5 TY BBA SEM-5.

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1 Business Environment/DIPESH PATEL Chapter-5 TY BBA SEM-5

2 Robert Ackerman was among the theorists who emphasized on the Micro level analysis, tried to show that how individual companies can be more socially responsible. He described three phases through which companies commonly tend to pass in developing a response to social issues. Business Environment

3 Business Environment/ UNIT I Organisational levelPhase IPhase IIPhase III Chief Executive Issue: Corporate Obligation Action: Write and Communicate Policy Outcome: Enriched purpose, increased awareness Staff Specialists Issue: Technical Problem Action: Design Data System and Interpret environment Outcome: Technical and Informational groundwork Division Management Issue: Management Problem Action: Commit Resources and Modify Procedures Outcome: Increased Responsiveness

4  Phase I: Chief Executive will identify the social problem.  Phase II: Company hires the staff to study the problem and suggest the solution.  Phase III: Division managers implement the solution. Where the ‘enlightened companies’ can make best information available. Being responsive may well be the only responsible course of action. Business Environment/ UNIT I

5 This Model suggests:  Firm must produce the goods and/or services that society wants and must sell them at a profit.  Legal responsibilities are also basic. Firms should operate within the law. Business Environment/ UNIT I Economic Responsibilities Legal Responsibility Ethical Responsibility Discretionary Responsibility

6  Ethical responsibility refers to behavior by the firm that is expected by society but not codified into law. These responsibilities are not well defined, where in specific situations they are clear.  Discretionary responsibilities encompass voluntary activities undertaken for the public good. It refers to the voluntary contribution of the business to the social cause like involvement in community development or other social programmes. Business Environment/ UNIT I

7 -- shareholders -- employees -- consumers -- community

8 Business Environment/ UNIT I

9  To protect the interests of the shareholders and employees and safeguard the capital of the shareholders.  To provide dividend, the company should earn sufficient profit.  To innovate and growth the company should consolidate and improve its position and help strengthen the share prices.  To improve and maintain the image of the company, such that the shareholders should feel proud of their company. Business Environment/ UNIT I

10  The payment of fair wages and appropriate salaries.  The provision of labor welfare facilities to the extent possible and desirable.  Arrangements for proper training and education of the workers.  Proper recognition, appreciation and encouragement of special skills and capabilities of the workers. Business Environment/ UNIT I

11  To improve the efficiency of the functioning of the business so as to (a) increase productivity and reduce prices, (b) improve quality, and (c) smoothen the distribution system to make goods easily available.  To do research and development, to improve quality and introduce better and new products at reasonable prices.  To take appropriate steps to improve the imperfections in the distribution system, including black-marketing or profiteering by middlemen or anti- social elements. Business Environment/ UNIT I

12  To Provide the required after sales services.  To provide sufficient information about the products, including their adverse effects, risks, and care to be taken while using the products.  To avoid misleading the customers by improper advertisements or otherwise.  To provide an opportunity for being heard and to redress genuine grievances.  To understand customer needs and to take necessary measures to satisfy these needs. Business Environment/ UNIT I

13  Taking appropriate steps to prevent environmental pollution and to preserve the ecological balance.  Rehabilitating the population displaced by the operation of the business, if any.  Development of backward areas.  Promotion of ancillarisation and small-scale industries.  Contributing to the national effort to build up a better society. Business Environment/ UNIT I

14  Changed Public Expectations of Business.  Better Environment for Business.  Public Image.  Avoidance of Government Regulations.  Balance of Responsibility with Power.  Business has the Resources.  Prevention is Better than Cure.  Moral Responsibility.  Citizenship Arguments.  Duty of Gratitude. Business Environment/ UNIT I

15  Profit Maximization.  Society has to pay the Cost.  Lack of Social Skills.  Business has enough Power.  Social overhead Cost. Business Environment/ UNIT I

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