Stakeholders

1) On your blog, briefly describe each of the internal and external stakeholders of a company, including all SIG's.

Employees

• the staff of the business (they produce the goods/services, communicate with customers, etc.)
• they want good wages, working conditions, security, training and so on that can only be provided when the business is doing well, and they will therefore work harder to achieve such things
  

Shareholders

• owners of private/public limited companies (purchasers of shares)
• they have the voting rights and a "say" in how the business is managed

Managers and Directors

• the people who plan/organize/control the daily running of the business
• they will be aiming for profit maximization (for their own benefit) and will be looking at the long term health of the business
  

Suppliers

• provides a business with raw materials, component parts, finished goods, or other resources needed for production. They can also provide services (e.g. maintenance, technical support).
• it is up to them to when to deliver their products/services, and for what cost
  

Customers

• the people that buy the product/service
• they decide the financial survival of the business - if no one buys the product/service, the business will not survive
  

Trade/Labor Unions

• unions that are for the better good of their members in form of fair wages, good working conditions, etc.
• businesses have to put up with the demands of such unions to avoid problems (e.g. a strike)
  

Pressure groups

• individuals with a common interest who seek to place demands on organizations to act in a particular way or to influence a change in their behavior.
• pressure from the pressure groups and the potential customers that support them can influence the business' behavior and/or customer base
  

Industry trade groups

• organizations that specialize in public relations with the aim of promotion a particular industry, through education and advertising.
• they have the potential to promote and support the industry that the business is part of
  

Local community

• the community surrounding the business
• they can either support the business and find it as an opportunity for labor, etc. however they may also have a negative outlook on the business and complain about it
  

Competitors

• rival businesses
• competitors will be interested in the business mainly to avoid anti-competitive practices and as a stimulus to innovation and product development
  

Government

• self explanatory
• the government will want to make sure the business is helping the public - they can either help stimulate business activity or they can also constrain the business
  

2) What determines whether an SIG will succeed in their objectives?

There are four main things that determine whether an SIG will be successful; funding, public opinion, number of members, and commitment of members. The more financial resources an SIG has, the stronger they will be. Similarly, an SIG is stronger when it there is greater public support and/or sympathy. The more members there are in an SIG, the bigger an impact and the more influential it will be. However, without the commitment of these members, it will not be successful.

3) What factors determine whether a business should take notice of an SIG?

If the SIG hopes to attract the business' attention, it will first have to be effective; if they are not strong and do not have a huge influence, the business won't do anything about it. Also, if the business has a large amount of market power they don't really have to react to the SIGs. Similarly, it depends on the business's financial resources; if they don't have enough spare money to comply with the demands of the SIG, they wont. If the directors, senior managers, and shareholders do not agree with the views of the SIG, then compliance is of low possibility. Finally, the aims and objectives of the business may clash or be delayed by such compliances, and they will therefore not take notice of the SIG.

Sources Used:
Hoang, Paul. Business and Management. Victoria: IBID, 2007. Print.

1. Define

• a) Ethics: the moral principles that guide decision-making and strategy
• b) Morals: what is considered right/wrong from society's point of view
• c) CSR: (Corporate Social Responsibility) the responsibility to act morally towards stakeholders like the employees and local communities
• d) Social Audit: independent assessment of how a firm's actions affect society

2. Give 3 examples of unethical business behavior.

• Environmental neglect (pollution, depletion of non-renewable resources, etc.)
• Exploitation of the workforce (mistreating staff, etc.)
• Exploitation of consumers (knowingly selling harmful products)

3. What are the advantages for businesses who behave ethically?

• Improved corporate image - enhances the image + reputation
  
• Increased customer loyalty - loyal customers due to acting morally
  
• Cost cutting - specific examples + lower litigation costs
  
• Improved staff motivation - ethical + moral behavior = driving force
  
• Improved staff morale - high quality staff who are motivated

Disadvantages?

• Compliance costs - potentially high costs of acting ethically
• Lower profits - if compliance cost cannot be passed on as a higher selling price
• Stakeholder conflict - not everyone might want these changes

4. How does CSR help a business compete?

When a business is socially responsible, it typically gives them a better public reputation. The public, i.e. the customers and consumers, will learn about this particular business' good reputation of being socially responsible, and will therefore be more eager to become a loyal customer of that business. This can mean a lot when it comes to competition within any given market.

5. Why is a social audit undertaken by a business?

Usually, a social audit is undertaken in order to show their stakeholders (anyone from the shareholders to the local community) that the business is doing the right thing, i.e. being socially responsible. This includes proving that they are doing things like:

• using renewable and sustainable resources
• using reputable and socially responsible suppliers
• creating systems that cater for the well-being of employees
• establishing an ethical code of conduct
• creating methods to monitor management and employee commitment to CSR policies

Sources Used:
Hoang, Paul. Business and Management. Victoria: IBID, 2007. Print.

Case Study on Franchising

To what extent is a franchise opportunity a true reflection of what it is like to set up and run a business?

Setting up a business and setting up a franchise can be very similar; however there are a few differences that need to be taken into account when making a decision. When a franchisee buys the rights to set up their own franchise, they are buying rights to use the franchisor’s trademark and model. They therefore don’t have to come up with their own ideas for the business; the logo, product, trade name, equipment etc. are already provided. Apart from that, however, running a franchise is very similar to running an individual business. The franchisor controls the marketing and quality of the product (they don’t want their business to get a bad name); however it is up to the franchisee to conduct and organize their franchise in such a way that earns them a good profit. Therefore, it is a fairly good reflection of what it is to run a business, not so much set one up (idea-wise).

Use the Forbes site and the Business of Baseball site to do some research on the financial positions of the different baseball franchises in the United States and Canada. Using the data, suggest which teams are the most vulnerable to seeing their franchise sold to a rival bidder such as Portland Oregon.

A team like the ‘Tampa Bay Devil Rays’ is most likely to be sold to a rival bidder. They rank number 30 in the top 30 teams of the league, and are therefore not doing very well in their games. They are, however, doing well financially – they have an operating income of 27.2 million dollars annually (this is the third highest amount of the whole league). Therefore, a bidder would be more likely to buy them; it will earn them more income, and the fact that the team isn’t doing all that well sport-wise can also work to their advantage (sponsorship, reputation build-up, etc.).

Imagine a situation where the English soccer Premier League became the franchisor as in the case of MLB Inc. How might the Premier League seek to use this position to expand the growth of the ‘brand’? What implications would this scenario have for clubs in the League and outside it (i.e. those in the Championship?)

If the Premier League was to become a franchisor, it could easily expand by introducing teams from different nations, for example the United States or even Canada. Obviously, a more international presence would help its reputation just as it would help any other business that went into franchising. They would also be able to earn much more profit if they were to introduce new teams/nations, as each team would (more then likely) have to pay some sort of royalty payment to the "brand".