Quiz 3: Social Responsibility, Ethics, and Strategic Planning
Synopsis of case study: KW has started retail music business named as M music in the year 1994. The focus of this business is to create music store. Its competitive advantage is based on inventory records. The business earned 20% revenue annually in the early years and generated a sales of around $10 million annually. After some years, he had a huge loss. Later, he adopted few strategies and earned $1.7 million revenue. M music employees were still upset. But KW believed that massive changes may save the store. Strategic planning: Strategy planning is a long-term process which provides a right way to the business based on the changes that occur in the environment. It differs from business to business. Process of strategic planning: The following are the steps involved in the process of strategic planning: • Preparing mission statement • Analyzing the environment • Executing competitive analysis • Examining strategic alternatives • Setting business goals and strategies • Designing a control system Mission statement: Mission statement is a foundation statement that provides the scope, direction, and purpose of the business. It gives the reason to the existence of the business but it is not an elaborate document. Mission statement of M music: Be friendly and accessible Environmental analysis: • KW should analyze the internal and external factors that affect the retail music business. • It helps to study about the strengths, weaknesses, opportunity, and threats of the business. • Internal analysis helps to identify the opportunities and threats of the business. • External analysis helps to identify the strengths and weaknesses of the business. Competitive analysis: Competitive analysis plays a crucial role in all business that evaluates and compares the performance of business with their competitors. The competitive advantage of KW is based on the inventory records. Core problem to be solved by M music: • Satisfy employees who were working in M music. • Satisfy the customers with their services. • Sales should be expanded. • Revenue growth should be increased. Positive alternative solutions to the problem: • The music they create should reach even illiterate peoples. • Provide online trading to the customers. • The process of reselling should be minimized and made easily understandable by the customers. • Create an attractive advertisement about the music store. • Assess the latest trends in the marketplace.
Small business: • Small business is a business that is commonly considered as small and it is privately owned. The primary purpose is to make profit with fewer employees. • It may be a sole proprietorship, partnership, or corporation. • It has a minimum of 15 employees which depends on the country and type of business. Social responsibility of small business: Social responsibility is a business obligation which enhances the society based on the different levels of responsibility such as economic, legal, ethical, and philanthropic. Small businesses are expected to operate in a responsible way by interconnecting these four broad areas. Economic responsibility: The primary role of small business is to be economically responsible. It is considered as a foundation of small business, and it also helps to be more profitable. The following are the activities that show small business is economically responsible: • To sustain strong competitive position • To maintain business efficiency • To utilize its resources in order to make profit Legal obligations: Socially responsible small business is expected to follow the rules and regulations compiled by the federal, state, and local laws. The following are the four groups of laws that generally regulate the business activity: • Consumer protection laws • Trade protection laws • Environment protection laws • Employee protection laws Consumer protection laws: Consumer protection laws have been enacted toward the protection of the consumer by the state and federal government. Nader's raiders, a consumer advocate who struggled a lot for the rights of the consumer in 1960s was created many laws regarding consumer protection. The following are the two important laws formed by the government agencies to protect the consumers: • Consumer product safety commission • Food and Drug Administration (FDA) Trade protection laws: • Trade protection laws have been enacted to protect against competition among the competitors. • Many laws were formed by the Federal Trade Commission (FTC) to offer high-quality products and provide best services to the consumers. Environment protection laws: • Environmental protection laws have been enacted to set proper standards for the business. • Many laws were formed by the Environmental Protection Agency (EPA) to protect the business environment. Employee protection laws: • Employee protection laws have been enacted to protect the measures of employment (sex, color, religion, and origin). • In addition, Age Discrimination in Employment Act (ADEA) and Equal Pay Act (EPA) were formed by the Equal Employment Opportunity Commission (EEOC) to provide standard rules regarding the diversity in the workplace. Ethical responsibility: In business, ethics is a value that relates to rules and regulations for employees in the business environment. Every business should have certain code of ethics to maintain a proper discipline among the employees. The following are the major ethical perspectives identified by business ethics: • Idealism • Unitarianism • Deontology • Virtue ethics Philanthropic goodwill: Philanthropic goodwill is the top level of social responsibility that helps to enhance the quality of life, standard of living, and support goodwill to the small business.
Small business: • Small business is a business that is commonly considered as small in size and it is privately owned. The primary purpose is to make profit with less number of employees. • It may be a sole proprietorship, partnership, or corporation. • It has a minimum of 15 employees, which depends on the country and type of business. Connection between social responsibility, ethics, and strategic planning in a small business setting Social responsibility: Social responsibility is a business obligation which enhances the society based on the different levels such as economic, legal, ethical, and philanthropic. Business ethics: In business, ethics is a value that relates to rules and regulations for the employees in the business environment. Every business should have certain code of ethics to maintain a proper discipline among the employees. Strategic planning: Strategy planning is a long-term process which provides a right way to the business based on the changes that occur in the environment. It differs from business to business. In small business, there is a strong connection between social responsibility, ethics, and strategic planning. Social responsibility and ethics are the obligations made to do the business in the right way. Strategic planning is a plan to reach that goal.