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Environmental Considerations


									Environmental Considerations
    Some external costs of business
•   Air Pollution
•   Sea Pollution
•   Noise
•   Congestion
•   Rising Sea Levels
•   Damage to Wildlife
                          External Costs
Area of the firm            Positive effects                         Negative effects

Marketing                   Improved reputation and image for        Need to acknowledge previous
                            the company                              problems

Personnel                   Can be motivating – Maslow,              Natural resistance to any change –
                            Herzberg                                 need for retraining and additional
Finance                     Product/Service differentiation allows   Cost of any measures taken
                            the firm to charge a higher price

Operations Management       May force the firm to invest in up to    Necessary steps may decrease
                            date technology and become more          efficiency or force a change of
                            efficient as a result                    location. Production may be disrupted
                                                                     as changes are made.
External Influences         May improve competitiveness and          May put UK firms at a competitive
                            ultimately promote economic              disadvantage with firms from abroad
                            efficiency for the country               that do not follow such stringent rules.
Objectives and Strategy     May allow firms to develop their         May divert resources from the growth
                            corporate culture and prepare            of the business and may place
                            contingency plans against                restraints on its decision making
                            environmental problems                   capabilities
• Social Audits = are independent
  investigations into the impact of a firm’s
  activities upon wider society.

• Environmental Audits = are investigations
  into a firm’s impact on the local
  environment. They can form part of a
  social audit.
      Purpose of Social Audits
• Modern businesses are becoming more and
  more aware of the need to meet at least some of
  the expectations of stakeholder groups. It is hard
  to reconcile of the groups.
• Accountability It is generally accepted that it is
  not right for a business to have a degree of
  power without there being some way in which it
  can be regulated. Business must show that it is
  doing the ‘right thing’

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