Corporate social responsibility is an effective business model that helps to regulate in a socially accountable manner to itself, stakeholders, and the general public. This article discusses the micro and macro factors that affect the business environment and the importance of corporate social responsibility.
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RUNNING HEAD: CORPORATE SOCIAL RESPOINSIBILITY0 Corporate Social Responsibility
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CORPORATE SOCIAL RESPONSIBILITY1 Table of Contents Introduction...........................................................................................................................................1 Micro Factors.........................................................................................................................................2 Macro Factors........................................................................................................................................3 Conclusions...........................................................................................................................................4 Bibliography..........................................................................................................................................4
CORPORATE SOCIAL RESPONSIBILITY2 Introduction Corporate social responsibility is an effective business model that helps to regulates in socially accountable manner to itself, stakeholders and the general public. Micro factors of the firm are concern with its suppliers, competitors, customers, market intermediaries and generalpublic.Itiscontinuouscommitmenttobusinessthatbehaveswithethical environment and contributes to development with quality of life(India CSR, 2018).With the same, macro factors are those which affects the business environment as natural factors, international, economic, political and government, socio cultural and demographic factors. There are several macro and micro factors that affect the business and they are always responsible for the dynamic changes in the internal structure as well as external structure of the business organisation. The firm that adopts social wellbeing and is more responsible towards corporate society has more potential than the other companies(Pan et al., 2018). Micro Factors The microenvironment factors in the company are directly in contact and have direct influences on the business entity. This factor comprises of the elements that have direct affects the business entities. For example, suppliers has direct contact on pricing of the products and competitive firms will start a war of prices in firm that is relatively small but when we see rival firm it will hesitate to initiate the price war(Oxford, 2019). Source:(S, 2015). Consumers- Customers uses product of the companies and ensures satisfaction of the customers for longer period of time. Satisfaction of the customer is the primary objective and maintains all its taste, preferences are important for the firm to grow its business and cherish it. To create a customer that helps to grow the firm business, everyone needs to maintain the relation with its customer’s weather it may be small firm or large firm(Watson, 2019).
CORPORATE SOCIAL RESPONSIBILITY3 Suppliers– Suppliers are those people who supply inputs from other parts to the company for increasing its profits. The quality and the main reliability are always ensuring the functioning of how to operate business. If they do not supply good and right quality of products and information, then it directly affects the corporate social responsibility of the business. Competitors– Every firm has its competitors that are rivals who compete with the firm in all resources and market also. A competitor examines the practices which are followed by firms and adapt the several in their own firms to adjust with the competitions. For example, Videocon isthecompetitorsof PhilipTelevisionin itsTelevisionMarket andwhen completion increases they need to change their practices in the organisation. Market Intermediaries- These include various distributors, retailers and wholesalers that create links between its customers and its firms. The firm itself is an example of aggregate numbers with owns investors and shareholders with the help of board of directors. Public and Employees- Public perception is the biggest threat to business with new opportunity for another firm. The general public chooses the brand of their choices with the help of advertisement and review of the customers for the particular product. Employees of the organisation also influences and impact from internal micro environment and made the choices according to that and this surely affects the business with its internal strategies. Macro Factors A macro environment factors relates to the external environment and they are mostly uncontrollable in nature. A macro factor creates all the opportunities, faces the threats and has practices that affect the scenario of business. Some of the external factors that affect the structure of the business are as follows(Claessens, 2015). Source:(Claessens, 2015). Economic Environment– This consist of conditions, economic system and policies that are the most important to its external factors. The changes in nature of economy, development
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CORPORATE SOCIAL RESPONSIBILITY4 process of the country, availability of economic resources, public finances of country, purchasing power of individuals with its prices and circulation of money with its credit availability. For instance, in all the developing countries like Japan and India the low income is the reason for demand high of the products and the entire major services of the firm. PoliticalandLegalEnvironment–Businessfirmsaffectswithlegalandpolitical environment as with the changes in the government actions on local or international level. New implementation of policies and actions directly affect the business firm and has to change its internal structure according to them. Social Environment– The social environment consists of dynamic factors and that may have cultural influences, the perception of values and beliefs prevailing in the society. An international company always studies the socio cultural environment before entering into the market. There is a mandatory concern about the goods and services, otherwise company will affects from high amount of losses. Demographic Environment– Demography refers to the study of the populations in the demographic environment and the various measures as population sizes, growth rates, family sizes, education levels, and religion, employment status. If there is any change in such graph, the business also affect in their growth sector as consumers are the first priority and changes in that leads to change in the demography of the company. Conclusions Microenvironment and macro environment covers the overall business environment and they are both complementary to know about the strengths, threats, weakness and opportunities in whichever business they operate. The different macro factors always affect the internal structureofthebusinessbyitssocialculture,environmental,politicalandeconomic environmental culture. Some of the micro factors are controlled by the organisation as suppliers, competitors, market intermediaries and employees are concern with micro factors and can be easily access in the internal structure. These are all related to corporate social responsibility as social responsibilities with corporates are the main elements that affect the business in positive or negative manner. Bibliography
CORPORATE SOCIAL RESPONSIBILITY5 Claessens, M., 2015.Macro Environment. [Online] Available at:https://marketing-insider.eu/macro- environment/[Accessed 3 June 2019]. Claessens, M., 2015.THE MACRO ENVIRONMENT – SIX FORCES IN THE ENVIRONMENT OF A BUSINESS. [Online] Available at:https://marketing-insider.eu/macro-environment/[Accessed 3 June 2019]. India CSR, 2018.Definitions of corporate social responsibility – What is CSR?[Online] Available at: http://mallenbaker.net/article/clear-reflection/definitions-of-corporate-social-responsibility-what-is- csr[Accessed 3 June 2019]. Oxford,2019.TheImpactOfMicroandMacroEnvironmentFactors.[Online]Availableat: https://blog.oxfordcollegeofmarketing.com/2014/11/04/the-impact-of-micro-and-macro- environment-factors-on-marketing/[Accessed 3 June 2019]. Pan, X., Chen, X. & Ning, L., 2018.The Roles of Macro and Micro Institutions in CSR. [Online] Available at:http://sci-hub.tw/https://doi.org/10.1108/MD-05-2017-0530[Accessed 3 June 2019]. S,S.,2015.MicroandMacroEnvironment.[Online]Availableat: https://keydifferences.com/difference-between-micro-internal-and-macro-external- environment.html[Accessed 3 June 2019]. Watson,G.H.,2019.DeliveringValuetoCustomers.[Online]Availableat: http://gregoryhwatson.eu/images/5-QP_Watson_-_May2002_-_Drucker_- _Delivering_Value_to_Customers.pdf[Accessed 3 June 2019].