INTRODUCTION TO BUSINESS (MGT 211) FALL 2012
ASSIGNMENT NO. 1
DUE DATE: 21 NOVEMBER, 2012
Corporate Social Responsibility
Learning objectives: Create awareness that how business decisions might affect the interests of stakeholder groups.
Corporate social, ethical and environmental awareness has become essential for businesses. Companies are liable to consider the interests of all stakeholders while performing their activities and making decisions. Business operations should not be exclusively focused to meet the objectives of shareholders and investors; which is the maximization of profit. Corporate must adopt a wider perspective when setting their objectives. The concept of corporate social responsibility explains us to assess the social impact of a business; it covers pollution levels, usage of energy, reprocessing and recycling rates, contributions to community, employee benefit programs and customer satisfaction. Business operations and decisions may have positive and negative impact on customers, employees, suppliers, community and environment.
Some typical business decisions in real world are as follows:
A business is planning for large expansion by building a new factory.
Application of technology into production and business processes
Business uses solar energy to run some operations.
Being the student of business education, you are required to analyze the likely positive and negative effects of these decisions on employees, customers and society at large (community).
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Study Tabbaco company's profile, its benefits, demerits and analysis. Get info from any sources and this will be the answer of above query.
In this assignments we should know about business and and theirs effects on stockholder after knowing this we can easily
analyze the likely positive
and negative effects of these decisions on employees, customers and society at large
How to Make Ethical Business Decisions
Making ethical business decisions consistently is a key to long-term success for any business, although ethical decision makers may, at times, achieve weaker short-term financial results than their shadier counterparts. Knowing how to make ethical business decisions can help you to set the standard throughout your organization, helping your company to garner a strong, positive reputation in the marketplace while securing a loyal customer base.
Create a code of ethics and consult it before making business decisions. A formal code of ethics can help you and your employees make decisions more quickly by conforming to a set of rules to which everyone agrees. Write your code of ethics vustudents.ning as generally or specifically as you would like, and format it as a numbered list. Before making a decision, scrutinize each alternative by going down the list and determining whether the alternative adheres to the code.
Consider the effects of your decisions on all stakeholders. Decisions are often made to address one or a small number of issues, such as revenue growth, cost control or client-specific issues, but it is important to realize the wider implications of your decisions on everyone affected. Business decisions made in the best interest of stockholders, for example, can have effects on employees, clients, suppliers, people living and working near your operations, the natural environment and even future generations of people. Consider how stakeholders will be affected if the decision turns out the way you plan, and how they will be affected if things go wrong.
Use industry regulations as a starting point when making decisions. A number of industries, including construction and financial services, are highly regulated to ensure the ethical operation of all companies. Regulations generally require a minimum level of ethical consideration, however, and it is possible for companies to operate within legal boundaries while still acting unethically. Build your organization to exceed laws and regulations, going further than your competitors to ensure that all stakeholders are treated equitably, rather than simply conforming to minimum standards.
Consult others when making decisions with widespread consequences. Gaining a fresh perspective on your dilemma can help to shed light on possibilities and impacts of which you are unaware. You can ask for help in generating options and in choosing which option to pursue, or you can seek advice concerning an option that you have already chosen before implementing it.
Review the results of your past business decisions, and learn from your mistakes. According to scu.edu, managers should always reflect on the outcomes of their decisions. No one can make perfect decisions all of the time, although making consistently ethical decisions is more easily accomplished than making consistently successful or profitable ones. If you have made and implemented a decision with questionable ethical implications, act quickly to resolve the matter by making restitution to everyone affected and work to counteract the decision's effects.
Careers and companies are built on solid decision making. At a minimum, poor decisions hinder performance and advancement toward the goals you’ve set or the tasks you’ve been assigned. At worst, poor decision making in the workplace can lead to the loss of livelihoods — or even lives, depending on the type of work being done. Developing your decision-making skills can make you a trusted leader in the workplace.
Poor prioritizing of tasks or hasty decisions made at the last minute can lead to costly low-quality results. For example, rushing last minute to finish a client’s project before the deadline increases the likelihood of creating a shoddy product that can ultimately disappoint the client and cost time and money to correct. Similarly, poor decisions about resource allocation can interfere with workflow and create emergencies. For example, a store manager who fails to schedule enough cashiers to meet a holiday shopping rush he should have anticipated is likely to spend all day urgently calling in reinforcements and cooling down unhappy customers.
Mistakes are caused by poor decision making and take up valuable time and resources to correct. Good decisions help a company compete in its industry. Many companies, however, are plagued by decision bias, a condition whereby decisions are made prematurely, leading to higher likelihood of costly mistakes, according to Harvard Business School. Decision bias can come from information overload, deadline pressure, excessive options or the faulty judgment of decision makers.
Any decision made to push a system beyond its proven limits increases the likelihood of an accident. Most accidents in the workplace are caused by some degree of human error, as suggested in an April 2012 “Inc.” article, "How Not to Crash and Burn in Business." Unlike machines, laws or policies, our human decision-making abilities can be influenced by bad moods, fatigue, illness, confusion, distraction and bias. For example, while a machine might have a failsafe mechanism that shuts down the system when something goes wrong, a person might choose to attempt something while fully ignoring the safety risks. Without our own internal failsafe mechanisms, our own urges or needs make us prone to making poor decisions that put ourselves and others at risk.
Frustration, confusion, lack of direction and loss of respect can cause chaos in the workplace as a result of poor decision making. Teams need to be able to trust their leaders’ decision making prowess. Leaders need to be able to trust that employees can handle their tasks and responsibilities. Trust erodes, though, among people affected by the results of a bad decision, jeopardizing workplace productivity and company success overall.
Einstein once said, “Common sense is the collection of prejudices acquired by age eighteen.” Common sense, Einstein was arguing, can often be the enemy of rationality, science, and fact-based decision-making. We are all guilty of this; every day our decisions are tinged by favoritism, rules of thumb, partiality, heuristics, predilection; call it what you will but our biases come into play with every decision we make and every tactic we execute. The trick is to recognize our own biases, question them every day, and be constantly aware of their often pernicious influence on our decision making.
Here are my 7 favorite cognitive biases, each of which has the ability to impact on your decision-making process, and some thoughts on how they can be leveraged and ways counteract their influence in your quest for wise determination.
Humans have a tendency to rely very heavily on one specific piece of information in their decision-making. This can happen in everyday life decisions, or in important negotiations. For instance, when looking at a new house a buyer may notice that the roof needs work, and may be prone to focus on that alone, while ignoring the fact that the seller has recently installed a new HVAC system, upgraded the electricity, and refinished all of the hardwood floors. The same seller, during negotiations,vustudents.ning may wisely make a low (but not ridiculously low) offer to the buyer in the hopes of “anchoring” the negotiation around that lower number. Studies (most famously have shown that when asked to estimate a number or percentage, if the researcher suggested a low number, the participant’s estimates would skew lower, and when a high number was suggested, the result would be the opposite.
How can small business owners leverage this bias? Be aware of the “lock-in” effect, and assess all information critically. Remember that your counterpart in any negotiation may present information that is self-serving, so look skeptically at the particulars. Anchoring can also be used to your advantage – remember that your negotiating partner is equally susceptible to this bias.
2. Bandwagon effect.
We are prone to believe that if lots of other people are doing something that we can or should do the same. We see this every day with people buying products, attending movies, and even joining political movements. Just because others do or believe something, does not necessarily mean that it is the best course of action, or the most valuable philosophy. Herd behavior and conformity can have a negative impact on your business decisions and can impact your ability to consider alternatives and define problems.
How can small business owners leverage this bias? If everyone else is onboard with a plan or proposal, there may be good reason to question why. Seek out alternatives and remember that groupthink can destroy a team’s effectiveness and limit a manager’s ability to choose between viable options.
3. Confirmation bias.
Closely related to the Bandwagon effect, is the confirmation bias. This is a predisposition to look for or information that confirms something we already believe. In other words, we prefer to see data that supports what we already “know,” so if you are politically conservative, chances are good that you prefer the information you get from Fox News. On the other hand, if you are a liberal, you would probably be more comfortable consuming your news via the Huffington Post.
How can small business owners leverage this bias? Actively seek out disconfirming information; ask others, “Why will this not work? What is wrong with my idea?” Recognize that you are a writhing mass of pre-conceived notions and make every effort to fiercely debate each of those.
4. Availability heuristic.
When we have a vivid memory of an event or outcome, we are prone to believe that event or outcome is more probable than other equally likely events. In other words, if you can easily bring something to mind, you will likely believe that is what will happen again. For instance, even though all data clearly demonstrates that airline travel is one of the safest forms of transportation, the memory of a recent air disaster will make us believe that air travel is risky; as the memory of the event fades, our belief in the safety of the 747 increases.
How can small business owners leverage this bias? Beware the influence that comes of suggestions or anecdotes not based in fact – we have a tendency to remember the stories we hear and, because certain memories are easily available to us, we allow those to influence our decisions.
5. Gambler’s fallacy.
Many addicted gamblers will tell you that they lost all of their money because they sincerely believed that they would be able to win it back because “the odds were in my favor.” This belief led to them playing the game just “one more” time. The belief that because you just lost 10 spins of the roulette wheel in a row, odds are that you will win on the 11th is a dangerous fallacy; in a game of chance, each new spin of the wheel has the exact same chances as the last spin, no more, no less. In other words, each time you flip a coin, the odds are exactly the same 50-50 as they were on the last flip, so the belief that future probabilities are changed by the events that proceeded is a dangerous trap.
How can small business owners leverage this bias? It’s simple – don’t do it! As tempting as it may be to continue a losing effort, recognize that you are throwing “good money after bad” and base your decision-making on rational factors and mathematical certainty, not on a false belief that somehow the world will tip your way of you play “just one more time.”.
6. The “sunk cost” effect.
Related to the gambler’s fallacy, and equally dangerous, is the belief that because you have already “invested” time or money in an endeavor this is reason enough to pursue that effort. Past costs, whether an investment of time or money, should never be used in evaluating a decision. In economic valuation, past cost can never be a factor for arriving at a value, and formulas such as NPV (net present value) will never take into account money which has already been spent. A great illustration of sunk cost? Let’s say you paid $100 to go to a football game. After the first half, your team is getting killed; the score stands at 53-0 and you are having a rotten time. You have a choice here: should you leave and go do something that you will enjoy more than watching your team go down to abject defeat? Or should you staying and justify your suffering because you already spent the $100. The answer? Ignore the money you spent – it is gone already, down the tubes – and LEAVE!
How can small business owners leverage this bias? Make your decisions based not on what you have already done, or how much you have already invested; ask yourself this: “From today forward, how much effort and money will I need to invest to make ____ happen?” Fill in the blank, then assess the value to your business based only on that information, and you are on your way down the road to rationality.
7. Hindsight bias.
“I knew it!” After the fact we often see occurrences as having been predictable. That football game? You “knew” that your team was going to be slaughtered, as a matter of fact you could have predicted it. But, truthfully before the game your hopes were high; it’s only after the game that you remember your prediction of certain defeat so clearly. This is the hindsight bias, and this incorrect appraisal of reality can often cloud your judgement and influence how you will make decisions on future events.
How can small business owners leverage this bias? Don’t let a successful outcome influence your analysis of a future decision. If you convince yourself of your predictive powers, you will be doing a disservice to your business and arriving at decisions that are based not on the data available but on your “hunch.”
Need something designed? Name y
As mentioned in the assignment question, every business decision has positive as well as negative impacts on customers, employees, suppliers, community and environment.
If a business is planning for large expansion by building a new factory, then its impact on the community will be both positive as well as negative. Positive in the sense that employment opportunities will be created and people will get employment in their home town, secondly new infrastructure will be constructed for the factory which will be useful for the advancement of the community. Negative impacts include pollution created by factory’s waste products.
Impact on the customers will be mainly positive, as the business is expanding so the product line will also be expanded and customers can be benefitted from the variety of products at a reasonable price, but the negative impact will be that as the industry is expanding, it will dominate the whole business sector and it can increase its product prices.
Impact on the employees will be positive as well as negative. New employees will be employed and the range of responsibilities of the old employees will be increased.
Suppliers will be benefitted as they have to supply higher quantities of raw materials and gaining high margin of profit.
Environment may get only negative impact as new factory will increase the miseries of the environment, wastes of the factory will increase environmental pollution.
One of the benefits of Corporate Social Responsibility (CSR) programs, it has been argued, is that they build up a reservoir of public good will, shielding companies in times of trouble. In this paper, we test the view that CSR provides protection from public ire by analyzing the media's response to corporate crises. We find the media far more likely to report accidents if they occur at a company with a superior CSR record. Rather than acting as an effective form of insurance, our results suggest that a strong CSR record can be a liability. Moreover, the tone of coverage is no less critical for organizations with a greener reputation. At the same time, firms with substantial past environmental problems are also more likely to find their corporate failings broadcast in the news. Companies hoping to minimize the risk of media attention to accidents need to be careful not to place their organizations at the very top or the very bottom of CSR rankings. This result has important implications for thinking about CSR and the privately optimal level of such activities.
It's an advise that companies should not force the disparate CSR programs into their business strategies. Instead, the goal should be to "bring discipline and structure to the many fragmented components. Components will in some cases support the core strategy and in many others may appear adjacent," with a potential to influence core assets, such as brand reputation or employee morale.
Application of technology into production and business processes:
Effects on customers:
Life of the customers has been made easy by the advanced technology, but the hazards of new technology has created few problems in the life of customers, such as lack of physical activity due to indoor games, radiation produced by various gadgets(mobile, ipad,laptop), etc.
Effects on employees:
Employees have to be trained in using advanced technology, if they want to survive in this competitive environment. A number of employees have lost their jobs due to introduction of computer and robots in the industry.
Effects on the suppliers:
Suppliers have be vigilant in this scenario. There is a lot of competition and they have to innovate and do research.Negative impact for suppliers is that their role has been limited now.
Effect on community:
Advanced technology has brought a revolution in the life of common man. People can now contact each other at any time by using this technology, cell phones, internet(social websites etc), but the dark side of the picture shows that there is moral degradation of the community at large, people become indifferent to each other.
Effect on environment:
Effects of the environment is not satisfactory, as gadgets emits radiation, can create imbalance in the environmental factors responsible for the normal temperature, depletion of ozone layer and so on.
Second discussion: Actually query required decision's affect (positive or negative) for the employees, customers and society. You have listed above affects on market not CSR. Some materials can be replaced with from these bios.
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First one topic discussion, Yes, its related materials but you have to link with employees, customer and community.