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Lecture

AFM102 Lecture Notes - Corporate Social Responsibility

1 pages25 viewsSummer 2012

Department
Accounting & Financial Management
Course Code
AFM102
Professor
Robert Sproule

Page:
of 1
A business may have important non-financial objectives which will limit the achievement of
financial objectives. Examples of these are summarised below:
Welfare of employees
The provision of employee welfare is an important objective; this relates to issues such as wages
& salaries; comfortable and safe working conditions, training and development; pensions etc.
The value of many businesses is critically-dependent on attracting and retaining high quality
employees which makes managing the welfare of such people even more important.
Serving customers
As all marketers understand, a critical activity of business is to understand and meet the needs
and wants of customers. In the long-term, this objective is the foundation for a financially
successful business. Non-financial objectives under this heading would include meeting defined
delivery standards, product quality, reliability and after-sales service levels.
Welfare of management
Management can, and do set objectives which are essentially about their own welfare. These
include objectives in relation to pay and conditions.
Relationships with Suppliers
Responsibilities to suppliers are expressed mainly in terms of trading relationships. Large
businesses often have considerable buying power over their suppliers which should be used
with care. Supplier objectives would include those relating to the timing of payment and other
terms of trade.
Responsibilities to Society
Businesses increasingly aware of their overall responsibility to society at large. The term that is
often used is Corporate Social Responsibility. This includes a business complying with relevant
laws and regulations (e.g. health and safety), minimising harmful externalities (such as
pollution).

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