BUSINESS STUDIES

PRESENTATION
Environmental Constraints on Business
Activity

THE ENVIRONMENT AND CSR

When a business accepts its ethical and lawful

obligations to shareholders and stakeholders it
accepts CSR (corporate social responsibility).
Environmental issues such as air, noise, and
water pollution caused by business expansion,
transportation, and production mutually in all
three cases are of growing worry to the
government and public.
Firms main dilemma _ should green policies be
brought in and their expenses tolerated, or,
should they maintain or target lowest possible
average cost?

ARGUMENTS FOR ADOPTING ENVIRONMENTALLY

FRIENDLY BUSINESS STRATEGIES

Businesses that use green equipment and recycling

rather than non-renewable resources gain promotional
advantage in the form of publicity.
Consumers with environmental concerns grow in number
and will support such business by purchasing more
products and becoming brand-loyal.
Strategy must be original, however. If it is found to be
plain window-dressing it will suffer negative publicity
and possibly huge setbacks in achieving profit or
turnover targets.
Companies that damage the environment by, for e.g.
locating a factory in a populated area with no
consideration for possible inconveniences will face the
opposite effect. Customers may also boycott products.

Methods causing minimal pollution will prevent

businesses from illegally harming environment and
receiving large court penalties.
Firms may receive more and better applications from
potential workers. Labour force would prefer to be
employed by an organisation they will be proud to work
for and which epitomizes their standards.
Long term financial benefits may be enjoyed by
consuming renewable power supplies. Solar power is
costly to generate, however if prices for non renewable
resources increase, business could gains substantial cost
savings. Considering external costs would help firms
avoid penalties like pollution permits or health
compensations (in these cases they would become
private costs).

ARGUMENTS AGAINST ADOPTING

ENVIRONMENTALLY FRIENDLY
BUSINESS STRATEGIES.

Keeping to the lowest possible costs may also include a

marketing advantage as there would be lower prices
charged => increased sales and consumers will benefit_
despite the damage to the environment.
Using green equipment will lower profits and restrain
future investment.
In some countries (like ours) environment is not given
much regard by the law so legal action against harmful
business activity will be unlikely.
Additionally other countries favour economic
development over environmental protection and say
that businesses will give more benefits by producing
cheaply rather than if they are coerced into the latter.

ENVIRONMENTAL AUDITS

These judge the effect of a businesss

activities on the environment.
It would check
1) pollution levels
2) wastage levels
3) energy use
4) transport use
5) recycling rates
And compare these with other businesses,
targets and years. These are published for
favorable consumer reaction.

SOCIAL AUDITS

These audits are reports of the business effect

on society. They may cover pollution level,
source of ethical supplies, customer and
employee satisfaction, health and safety record
and community contribution, together with
targets to be reached to improve firms CSR.
These are used to identify anti social behaviour
to root it out and for increasing publicity.
Evaluation: Audits may not be taken seriously
unless it is agreed what they should include and
how they are confirmed.

There is accusation of window dressing where the

intent was to hide unethical policies.
These practices will be very time consuming and
may not give much return on the effort to small
businesses.

PRESSURE GROUPS (ENDING)

These are organisations created by people

with a common interest or aim who put
pressure on businesses and governments to
change policies so that an objective is
reached.
They want the three parties; governments,
businesses and consumers to change
legislation, policies and consumption habits
to suit their purposes. They would want
cooperating businesses to see an increase in
sales and vice versa.

They will achieve these goals using the following;

Publicity through media coverage; Through display
mediums and press releases, giving details of
undesirable business activity and coverage at direct
action events such as meetings will keep the campaign
familiar to the public.
Influencing consumer behaviour: If the pressure group
manages to make a difference in the consumer
purchasing pattern_ stopping the sales of a certain
company for long enough then the commercial case for
changing policy will be much more effective.
Lobbying of government: This would require putting
government ministers under pressure to change
legislation. If the government is likely to face negative
publicity due to refusal the pressure groups demands
may be met.