Page 98 - Bisiness Studies_Form_3

Business Studies for Secondary Schools
Exercise 5.1
1. Assume you own a small shop
that sells fruits and vegetables. A
customer complains that the fruits
you sold to them were rotten.
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What will you do to demonstrate
ethical behaviour in this situation? customers, consumers, and employees.
2. Your small shop is struggling with
low sales. A supplier offers you a
large discount on a new product
if you agree to buy in bulk.
However, you know the product
is of slightly lower quality. You
are unsure whether customers will
notice. Do you accept the deal and
sell the product, or refuse and risk
losing potential sales? Why?
Corporate social responsibility
Corporate social responsibility (CSR)
refers to a business’s accountability
towards society. CSR in the business is
concerned with the welfare of the whole
community, not just the business owners
and customers. It is a business commitment
to contribute to social welfare, fairness,
respect, and honesty in its community.
CSR includes the following activities:
(a) Ethically perform business by
considering all stakeholders;
(b) Positively respond to community
priorities;
(c) Willingly act in accordance to the
regulatory requirements; and
(d) Balance between shareholders’
interests and the community’s
interests.
Student’s Book Form Three 90
Importance of corporate social
responsibility
CSR involves the business’s consideration
of stakeholders’ interests while making
business decisions and actions. These
stakeholders include government agencies,
the community, suppliers, financiers,
This means that businesses should perform
their operations with regard to the interests
of the stakeholders. Businesses should
also measure the consequences of their
decisions and courses of action on society
and ascertain that no undue harm is done to
the stakeholders’ interests. The importance
of CSR include the following:
Improves public image: Consumers usually
consider a business that practices CSR
to be a better organisation. Something
simple like staff members volunteering
an hour a week at a charity, shows that the
business is committed to helping others.
As a result, it creates a respectable image
in the community.
Increases brand awareness and recognition:
If the business is committed to ethical
practices and CSR, good news could
spread. More people could hear about the
business brand, which creates increased
brand awareness.
Increases competitive advantage: By
embracing CSR, the business stands out
from competitors in the industry. It could
establish itself as a company committed
to going one step further by considering
social and environmental factors.