Corporate Social Responsibility of Abc Company

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Due to ABC’s commitment to CSR does however result in significant costs, so its costs base is much higher than some of its competitors and caused ABC’s product are more expensive than both non-ethical beauty care products and the own-label. Finally in the recession, customers will be less willing to pay the premium for ABC products if they have less disposable income even though CSR can help increase reputation of company but the price become more expensive.

CSR can help the company increased engagement and retention, stronger relationships with the community, enhance reputation, brand name and generate competitive advantage. CSR is one of the key means of achieving sustainable competitive advantage in the turbulent worldwide environment. Differentiation Focus strategies is now use by ABC to generate competitive advantage because price of ABC’s product are premium and they targeted in niche market which provide naturally-based, ethically-sourced beauty products and they do not contain animal ingredients and suitable to use by vegetarians and vegans.

But when ABC overcome the risk pursuing social responsibilities and sustainability and it can help to generate competitive advantage, ABC should proper allocate their resources on CSR project and operation and reduce cost on CSR project because CSR is not only way to achieving sustainable competitive advantage. Balance allocation resources on CSR and operation can not only help ABC increase reputation and also increase effective and efficiency of operation to reduce cost. Both can help ABC generate competitive advantage which reduce cost to help price of ABC product become more competitiveness because when cost are lower, ABC’s product can set an acceptable price by consumer and lower price compared with other competitor.

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- Possible conflicts between stakeholders as a result of ABC’s environment and ethical objectives

Balance the interest of different group of stakeholders is important for the business. Various types of stakeholder group are looking different performance of company; shareholders seeking the company earn profit and received return on their investment to maximize the wealth. Company should provide good working conditions to satisfied employees if they want to retain the employees. Potential investor may want to look evidence to evaluate performance of company and how a company address environmental issues before invest. For consumer, they expect accurate and reliable product to enjoy high quality of product or service.

Stakeholder conflict may arise when requirement of one of stakeholder group compromise other expectations. An organization has to make decision which some stakeholder might not accept. For instance, ABC provides a naturally based and ethically base sourced beauty care products. All ABC’s product is suitable to use by vegetarians and vegans because they do not contain animal ingredients. This mean ABC Company only uses raw material supplier who themselves adopt ethical policies but it may pay expensive supplier goods to ensure quality and safety of supplier good and caused price become high and consumers required pay the premium for ABC products. Some shareholders who are looking short term benefit may request lower cost supplier merchandise, which can help reduce cost and keep process down for customers, might not use the ethical practice by suppliers or product safety. While the final product might be less expensive if ABC association with an unethical supplier or low quality product risks harming reputation and financial loss.

ABC is very conscious of the social and environment impact of its working practices and takes CSR very seriously, but this kind of activities might not give immediate financial return on investment but support the ethical standards of business. For instance, ABC makes regular donations to a variety of human right and social causes but some shareholder may conflict with company because they think the amount of donation can be used to invest company’s asset to expand their business. This kind of policies need to me proper explain and communicate to all stakeholders involved, so they comprehend the long-term value because it can provide green image as a result of its green activities.

All ABC product is make natural and environmentally-friendly product, Also as ABC products are not tested on animals, but stakeholder conflict may arise when some consumer perceive them to be less safe than other more conventional cosmetic brands. It will caused consumer less willing to pay the premium for ABC product if they have less disposable income. ABC should provide good confidence on product to customer which can provide information or certificate to customer to ensure the quality and safety of the product, for example ABC shares included on the ‘FTSE4 Good” index of companies that demonstrate good CSR to provide good image and confidence to customer.

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- Impact of ABC’s structure and leadership

Suzette Boyle which is founder and Chief Executive of Absolute Beauty Company plc (ABC) which actively involved in all operations from product development through to staff training. The reputation and profile is closely linked with Suzette Boyle. Despite the demands that her other commitments make on her time and it will bring impact to ABC because Suzette is still very heavily involved in the running of the company and majority of ABC’s new product ideas are believed to come for her. It would certainly add to the challenges facing by ABC when Suzette’s retirement and it have been strongly denied by the company. The transition problem will arise when Suzette Boyle retire. Most, however, do not. Management becomes racked with strife and indecision. Quality and outlook of product may will change and consumer change their minds to buy ABC product and caused profit fallen. And often the company dies or becomes stagnant.

ABC will not very conscious of the social and environment impact of its working practices and no taking CSR very seriously when Suzette get retire. It is because Suzette stronger held ethical values and her desire to ensure that “ABC is sustainable enterprise” are regularly quoted in the media. When the Chief Executive is changed, the operations and structure may also change and probably not invest so much in CSR project. Employees satisfaction will be reduced because some employees is attracted by ABC which align themselves with these values and who share it concern for the natural environment.

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