Provision Of Services In The Financial Sector Essay - 7

Provision Of Services In The Financial Sector - Essay Example Most of these adults are located in Asia, Latin America, and Africa. The mobile phone device is also changing the provision of services in the financial sector. The cell phones are regarded as cost-effective. The improvement in the technology sector has enabled the use of cell phones in the financial sector. The poor individuals in the society manage a wide range of financial instruments. In most cases, the microfinance sector has several requirements including insurance coverage, loans for emergency needs, pensions and microenterprise loans among others (Dommel 13). The financial sector should address the constrictions entailed in the financial service providers in order to reduce the poverty rates in most regions. This is because most individuals will be supported to invest and also save their money for future use. For instance, the financial service providers should be able to increase access to remittances in the rural areas. They should also consider providing enhancing savings groups and increasing branchless banking.

Design an e-Business System Essay Example | Topics and Well Written Essays - 3500 words

Design an e-Business System - Essay Example Proper communication remain essential in ensuring the minimisation of errors; hence improvement of the business process. The utilisation of an internet based system for establishing links between salesmen, customers and suppliers remains essential in improvement of the processes. The different stakeholders will access information from a central source, and share information from the same centre. This sharing can effectively improve business processes and increase the company’s market share. Objectives The main purpose of the subsystem remains ensuring quick transfer of information and sharing between various stakeholders. The system aims at improving the business process and increasing efficacy of the process of making sales and manufacturing. Improvement of these processes can result in increased sales owing to the reduced time taken in making orders and delivering supplies. The application of the system objectives can ensure the company sales increase significantly, ensuring the company achieves significant growth. Background Avitz Bike is a UK based manufacturing company which specialises in different types of bikes for different markets globally. While the company experiences a considerably good market share, stiff competition has resulted in reduced market share over the last 5 years. This reduction has been attributed to the duration taken before bikes are delivered to customers. The company relies heavily on sales made through different retailers across the United Kingdom. While the utilisation of retailers has continuously provided sufficient market-share, improvement in the selling process remains inevitable as the company seeks to increase sales. The utilisation of an E-business system seeks to ensure the company reduces the delivery time for most products. This would effectively increase the current sales volume, consequently increasing the market share. The company has adopted the E-business strategy to eliminate the lengthy supply chain, pre sent in the current strategy. Description of the business process The process of receiving orders within the business involves direct communication with retailers, through telephone, electronic data exchange of facsimile. The retailers first make contact with sales managers, to negotiate on different product prices, before making orders to the company. The orders are then subjected to a validation process, which includes verification of various order requirements as stated by the retailer. This validation process results in acceptance or rejection of the order. Following the validation of different orders, required parts can be orders to enhance the assembling of the requested bike. The customer specifications determine how the distributors deliver bikes to various retailers. When utilising process, the company does not make direct contacts with the customers making the process lengthy. The company utilises an information system developed in 1997, built on LAN with Windows NT as the client-server system. The current system contains information regarding customers, suppliers, bikes and other physical attributes of company products. Some of the information contained within the system remains available to specific departments, an aspect which causes delays. Problems and solutions in project that the company is facing The company faces a number of challenges resulting from the current business process and information systems. The biggest problem

Macro-economical Side of World Price of Wheat Assignment

Macro-economical Side of World Price of Wheat - Assignment Example Normally, when a good has high demand with a given supply, the price for the same tends to come up and when it is demanded by a few, the price tends to come down. But, it is to be noticed that this relationship between price, demand, and supply do not hold good always. There are exceptions to this general rule. However, in the case of commodities that are normally consumed, this rule can be applied. It can be, therefore, inferred that demand and supply are two opposite extremes of the same phenomenon and when it comes together (it is necessary), the price is determined, called the equilibrium price. This equilibrium price ensures that quantity demanded is just equal to the quantity supplied at any time point and this decides the price of that good (Forget 1999, p. 141). In the context of a hike in the price of enriched wheat flour in Malaysia, the following demand-supply model is suggested. The price of wheat here is determined by the forces of quantity demanded and supplied. The quantity of wheat supplied at any time is the amount of wheat that the suppliers are ready to offer at a certain price. Similarly, the amount of quantity of wheat demanded by consumers implies the quantity that consumers are ready to purchase at a certain price. When both demand and supply interact together at a point, the price is determined. This situation is known as the equilibrium price. This situation gets affected when there is a mismatch between quantity supplied and demanded. At this juncture, the quantity demanded does not coincide with what is offered by suppliers and thereby the price reaches disequilibrium. This price disequilibrium gets adjusted by either a price cut or a price hike as the case may be and eventually reaches the price equilibrium. The major reason put forward here for the inevitable price hike is the shortage of wheat in the home market. When there is a shortage of an essential good, the demand for the same would increase as a certain amount of the good is consumed daily. Therefore, when there is a shortage in the supply of wheat in the country, the demand for wheat flour increases and naturally there is an adjustment of price. However, this economic problem can be overcome by shifting the consumption of wheat from enriched wheat to normal wheat. The price of normal wheat will not be affected much as it is abundantly available. Hence, the authorities can proceed with stabilizing the price at a level where the consumers in the home market will not be harmed much. Explain the determinants of the price elasticity of demand as they apply to the demand for wheat. Use your conclusions about the price elasticity of demand to explain what they imply about the revenue that Australian wheat farmers are likely to receive as a consequence of the poor harvests in Australia Price Elasticity of Demand of a good is commonly understood as the degree to which the consumers respond to a change in price. If the consumers are highly responsive that they demand more of the good, when there is a price cut, the good id said to have price elasticity. It is measured by a coefficient. When the coefficient is high, the good is highly elastic and vice versa (Hoag 2006, p. 102).

Provision Of Services In The Financial Sector Essay - 7

Provision Of Services In The Financial Sector - Essay Example Most of these adults are located in Asia, Latin America, and Africa. The mobile phone device is also changing the provision of services in the financial sector. The cell phones are regarded as cost-effective. The improvement in the technology sector has enabled the use of cell phones in the financial sector. The poor individuals in the society manage a wide range of financial instruments. In most cases, the microfinance sector has several requirements including insurance coverage, loans for emergency needs, pensions and microenterprise loans among others (Dommel 13). The financial sector should address the constrictions entailed in the financial service providers in order to reduce the poverty rates in most regions. This is because most individuals will be supported to invest and also save their money for future use. For instance, the financial service providers should be able to increase access to remittances in the rural areas. They should also consider providing enhancing savings groups and increasing branchless banking.

Macro-economical Side of World Price of Wheat Assignment

Macro-economical Side of World Price of Wheat - Assignment Example Normally, when a good has high demand with a given supply, the price for the same tends to come up and when it is demanded by a few, the price tends to come down. But, it is to be noticed that this relationship between price, demand, and supply do not hold good always. There are exceptions to this general rule. However, in the case of commodities that are normally consumed, this rule can be applied. It can be, therefore, inferred that demand and supply are two opposite extremes of the same phenomenon and when it comes together (it is necessary), the price is determined, called the equilibrium price. This equilibrium price ensures that quantity demanded is just equal to the quantity supplied at any time point and this decides the price of that good (Forget 1999, p. 141). In the context of a hike in the price of enriched wheat flour in Malaysia, the following demand-supply model is suggested. The price of wheat here is determined by the forces of quantity demanded and supplied. The quantity of wheat supplied at any time is the amount of wheat that the suppliers are ready to offer at a certain price. Similarly, the amount of quantity of wheat demanded by consumers implies the quantity that consumers are ready to purchase at a certain price. When both demand and supply interact together at a point, the price is determined. This situation is known as the equilibrium price. This situation gets affected when there is a mismatch between quantity supplied and demanded. At this juncture, the quantity demanded does not coincide with what is offered by suppliers and thereby the price reaches disequilibrium. This price disequilibrium gets adjusted by either a price cut or a price hike as the case may be and eventually reaches the price equilibrium. The major reason put forward here for the inevitable price hike is the shortage of wheat in the home market. When there is a shortage of an essential good, the demand for the same would increase as a certain amount of the good is consumed daily. Therefore, when there is a shortage in the supply of wheat in the country, the demand for wheat flour increases and naturally there is an adjustment of price. However, this economic problem can be overcome by shifting the consumption of wheat from enriched wheat to normal wheat. The price of normal wheat will not be affected much as it is abundantly available. Hence, the authorities can proceed with stabilizing the price at a level where the consumers in the home market will not be harmed much. Explain the determinants of the price elasticity of demand as they apply to the demand for wheat. Use your conclusions about the price elasticity of demand to explain what they imply about the revenue that Australian wheat farmers are likely to receive as a consequence of the poor harvests in Australia Price Elasticity of Demand of a good is commonly understood as the degree to which the consumers respond to a change in price. If the consumers are highly responsive that they demand more of the good, when there is a price cut, the good id said to have price elasticity. It is measured by a coefficient. When the coefficient is high, the good is highly elastic and vice versa (Hoag 2006, p. 102).

Letters of Credit Essay Example for Free

Letters of Credit Essay The use of the letter of credit in international trade has for a long time been an easy way of carrying out business operations without really having to use the credit of the applicant’s bank. Letters of credit usually take the place of a bank’s credit and enhances the speed of transactions when used properly.[1] Usually, the letter of credit serves to give an importer of goods as well as the exporter a chance to go a head with their business transactions even when there is no real liquid money available to either party. Letters of credit, however, present very many challenges to both the exporter and the issuing bank because they are usually documents that cannot be revoked under certain circumstances and so exposes some players to a lot of risk. A key concern has been the nature of the conditions that ought to be met before such documents can be honored by the exporter’s bank which usually has to rely on information from the importer’s bank.[2] It is on the basis of the intricate issues that surround the letter of credit and its use that this paper seeks to critically discuss it especially when used in the context of international trade. Of particular interest, though, is a discussion of the undue exposure to losses and other risks on the issuer of the letter of credit, particularly in instances when the applicant or beneficiary of the letter of credit does not duly perform one’s obligations or wrongfully obtains payment. The Working of a Letter of Credit From a business point of view, it is usually very important for an importer of goods and who holds an account with a local bank to seek for the financing of the bank for goods that are to be sourced from another country.[3] The reasons this is appropriate range from an ability to facilitate the business transactions and ensure a faster and timely transfer of the goods from the exporter’s location to that of the importer, and to reduce the costs that could be incurred in having to use other means of payment to pay for goods in another country – means of which are not always available. Therefore, from the business point of view, a letter of credit serves to enhance the general business transactions involving international trade. Where the challenge comes in is that point when it is never drawn or requested unless there is some form of credit that needs to be transferred. Actually, the letter of credit is used as an exchange of the credit of the bank and that of the buyer. Here, issues of compliance with the terms and conditions of the letter of credit poses many challenges and risks to the issuing bank as well as the advising bank which literally transfers the credit to the exporter’s account. This results because of the manner in which the transactions are conducted. First, an importer in the United Kingdom orders for coffee beans from a farmer in Brazil. The farmer insists that the coffee beans can only be exported or ferried on condition that the payment for them is paid within forty days from the time the transaction is entered into. The UK importer cannot get to Brazil to make the payments but there is a way that the exporter’s bank can communicate with the importer so that the credit can be transferred. However, the buyer does not want any undue risks so he does not offer cash to his bank but asks for a letter of credit to be drafted with the Brazilian coffee exporter as the beneficiary. The UK bank makes an arrangement with this importer and because he satisfies the conditions required, the bank drafts a letter of credits and transfers it to the beneficiary’s bank in Brazil. That advising bank then verifies the details of and terms of the letter of credit and duly pays the exporter. Once this is done, it is all to the exporter to ship the coffee beans to the UK. Only then can the advising bank (the exporter’s bank) be able to seek for the payment for the goods in accordance with the terms and conditions of the letter of credit. As can be clearly seen, there are so many processes involved and it all boils down to four main players who are bound to lose or benefit. There are the bank of the exporter, the bank of the importer, the exporter and the importer. Commercial Letter of Credit and Standby Letter of Credit It is always important to draw a distinction between two types of letters of credit commonly used in international trade and to ascertain the roles each plays towards enhancing payments for imports by a customer.[4] The commercial letter of credit is the most widely used and its use is restricted to the actual exchange of credit on behalf of the customer of a bank. It is the commercial letter of credit that will be needed by the advising bank or the exporter’s bank in order to effect payments. However, owing to the risks to the issuing bank regarding defaulting on the part of the importer who is also its customer, the issuing bank usually drafts and issues another letter of credit for the purposes of proving the credit worthiness of the importer. This particular letter of credit, therefore, serves the function of guaranteeing the advising bank and the exporter that the importer will actually pay for the goods. This reduces the risks inherent in international trade.[5] Based on this fact, it can be fairly argued that an issuer of the commercial letter of credit will be protected significantly in the event of failure by the beneficiary to adhere to the terms and conditions of the letter of credit. To a significant level, having the standby letter of credit protects the issuer because it cannot be allowed to pursue the property of the importer and recover the money; or it can fail to pass the money to the advising bank. In accordance to the UCP provisions, the banks are protected only mildly when it comes to failure by trader to honor their part of the contract regarding payments to be submitted. For instance, the UCP never really form part of the official international trade rules and are only applicable when the parties to the trade deal believe it is right for them. The absence of a clear law, therefore, that emphatically seeks to help issuers of letters of credit means that they are exposed to many risks. The law in this country regarding international trade in general and letters of credit in particular tend to offer protection to consumers more than the issuer of the letters of credit. It is almost always believed that banks have the right and the capacity to set up their own terms and conditions which they believe are sufficient enough to protect them from any acts of fraud by traders; and as such not a lot of protection is offered them under the law. International trade law will also protect the local bank and not the foreign bank, meaning that in the event the local bank, which is the issuer of the letter of credit, has already passed on the money to the advising bank, then there is little that can be done to recover the money especially in cases where the trader fails to honor the obligations to pay the bank due to bankruptcy or any other reason. This is because the law on bankruptcy protects the importer from the actions of banks that can lead to further legal battles. If such an importer files for bankruptcy during the period when the goods are yet to be delivered to him, then there is nothing the bank can do to recover its money.[6] A person declared bankrupt is protected from his debtors until at such a time when the bankruptcy can be lifted. This clearly renders the issuer of the letter of credit to such a trader incapable of recovering its owed monies. [1] Campbell, Dennis. REMEDIES FOR INTERNATIONAL SELLERS OF GOODS [2008] Volume II. Lulu.com, 2008 [2] Edwards, George. Foreign Commercial Credits; A Study in the Financing of Foreign Trade. General Books LLC, 2009 [3] Great Britain. Law Commission. Company security interests: a consultative report. Routledge, 2005 [4] Credit research Foundation. â€Å"Understanding and Using Letters of Credit, Part I† (1999). Retrieved 08/16/2010 from: http://www.crfonline.org/orc/cro/cro-9-1.html [5] Warner, Susan. The Letter of Credit. Kessinger Publishing, 2007 [6] LLL. â€Å"U.C.C. ARTICLE 5 LETTERS OF CREDIT .† (2005). http://www.law.cornell.edu/ucc/5/article5.htm

Corporate Governance And Business Ethics Of IKEA Commerce Essay

Corporate Governance And Business Ethics Of IKEA Commerce Essay The origin of IKEA concept dates back to the year 1943 in Sweden. The founder of the organization Ingvar Kamprad was just 17 years old when he started this organization. The company is almost six decades old now. The organization which was started in a small village in Sweden today has spread across 36 countries world over and has created a brand image for itself as one of the worlds leading furniture dealers. The owner of the business, Ingvar Kamprad, as already stated was very young when he started this organization. It was his ambition to start his own business since his childhood years. He started selling small household things like matches etc, since the age of five. As he grew a little older he started going a little ahead of his neighborhood to carry out the selling of matches and he realizes that it is possible to buy matches in bulk at a lesser price and possible to earn decent profits. His product portfolio ranges from matches to various other things like Christmas gifts, greeting cards, pencils and ball point pens etc (IKEA, 2009). In the year 1943, at the age of 17 Ingvar receives a small sum of money from his father as a gift for his exceptional academic performance which he uses as capital for his business and starts his own business. The name of the company IKEA is actually the initials of the Founder Ingvar Kamprad and the first letters of the farm and village he grew up Elmtaryd and Agunnaryd. In the initial days of origination, the company used to sell stationery stuff like ball point pens, table runners, and other miscellaneous stuff like watches and jewelry etc. However, an interesting fact about the store is that the products were priced lesser. As the years passed, the product portfolio of the company increased and it has primarily become a furniture retailer. Today, the organization has got its presence in over 36 countries across the globe. From opening stores in various parts of the world to acquiring business units and being environment friendly, the company has created a name for itself in the world. Business Idea of IKEA IKEA is famous all across the globe for their affordable price range for the well-designed and varied range of functional home furniture. Price affordability is the predominant ides behind every step that the company takes, right from product development to product sales (IKEA, 2009). However, one may think how is the company making it possible to offer high quality products at a very low price? This is where the company differentiates itself from other players in the industry. The organization constantly develops ideas that are both innovative and at the same time cost-effective. Low prices, flat packing looking everything differently are a few such ideas of the organization to differentiate itself in the market. IKEA Responsibility IKEA strongly believes that taking responsibility for the society and the environment in which it does business are the foundation for its sustainability in the industry. The IKEA group has got managers who work constantly to ensure social and environmental responsibility in the day-to-day activities of the business. To support business, there are a number of specialists covering a wide range of areas, such as chemical experts, foresters, IWAY auditors and energy experts. All IKEA Group stores and distribution centers have environmental coordinators who work in the areas such as training, waste management, water and energy conservation (IKEA, 2009). Code of Conduct of IKEA IWAY The company introduced its code of conduct IWAY in the year 2000 and it applies to all of its suppliers. The company has got independent IWAYs for all of its various businesses. All of IKEAs suppliers and service providers are required to strictly adhere to this code of conduct. The code of conduct specifies certain requirements for suppliers and service providers and also the support that the company offers to them. The suppliers and service providers are required to communication the same to the co-workers and ensure that all of the channel members those are involved implement the same. Corporate Social Responsibility and its importance to todays Business Many corporate bodies have made an impression in the countries of their adoption. The impact is more so, in countries that are either developing or underdeveloped. These conglomerates play active roles in the social and economic development of the society they live in apart from generating highly profitable overtures from themselves in the bargain. This dissertation sets out to explore just this, and how they are able to manipulate their corporate social responsibilities (CSR) to ensure extremely favorable business conditions and growth. An individual must not forget that CSR alone is not enough for a company to progress; it takes a lot of personal involvement and hard management decisions to turn hostile terrains to viable solutions. Companies with high levels of CSR recognize the need to lead from the front; they show collective understanding of cultural, political and social issues, and issues pertaining to the local community and their grievance, as well as supporting their cause. A key element of business is knowledge management. Intangible assets can be easily shared through partnerships to achieve mutual benefits (Halal 2000)  [1]  . Kay (1993) argues that successful innovation and management of distinct possibilities for companies; such as the reputation of the company, which lead to the competitive advantage. Reputation, like knowledge management, is an intangible asset which can affect and be affected by the community in which a company operates. A company that supports the community wherein it operates , has the advantage of enhanced performance through image-building, and has the effect of empowering that community. It is therefore right in assessing that, those companies that play a major role in corporate social leadership can maintain their competitive advantage over other market players (Hilton and Gibbons 2002)  [2]  . A first in the market is seen as a big step forward to maintaining a competitive advantage. Becoming a CSR leader can also create competitive advantages. CSR helps to create a motivated workforce, which is easy to recruit and retain. It is thus natural to say that a constructive relationship with the community leads to knowledge exchange and mutual profit  [3]  (Halal 2000, Handy 2002). The link between CSR, community stakeholders and financial goals is seen at various levels from tenuous (Fryxell and Wang 1994), to relevant only as it impacts on primary stakeholders (MacMillan et al. 2004), to a necessity (Chakraborty et al. 2004) and finally as an investment (Schiebel and Pochtrager 2003). Chakraborty et al. (2004), says that in a developing country like India, for example, there is so much that can be done to fight poverty and deprivation and bring about advancement without losing track of its ethical and spiritual moorings. What these corporations seek is to support community development, while at the same time, concentrate on profitable propositions and enrich business practices. This can be done through cooperation with local NGOs who have reliable and time-tested networks and relationships in place (Millar et al. 2004)  [4]  . Stakeholder involvement through NGOs is not without its problems, as in many cases, some international and national NGOs have no accountability at the local level. Many areas in developing countries are either backward or tribal, which could lead to conflicting cultural norms within one geographic community area itself, and the possibility of inadvertent exclusion of any intended beneficiary can be disastrous (Blowfield, 2004)  [5]  . Another aspect of CSR is the expression of indirect marketing. CSR and marketing are frequently linked and thus, CSR is in more than one way, considered a marketing tool employed to generate profit and recognition. The overriding projection of CSR as a great marketing tool is as good as the benefits the community derives from these practices. There is no doubt that good work can enhance the reputation of the company and significantly affect the competitive advantage. There are two ways of aligning with the community they operate in. at first, the conglomerate uses the community to its advantage (cause-related marketing) while in the other, develops the community with the hope of deriving benefits in the long run (Banyan, 2004)  [6]  . Organizations function more effectively if they operate as open systems, interacting with and responding to changes in the external environment. Since such organizations are influenced by the transformations in the external setting, executives must comprehend the nature of this environment. The external environment of an organization consists of the mega environment otherwise called the general environment and the task environment. The mega environment reflects the major trends in the societies within which the organization operates. These societies have various sub components namely the technological, economic, socio-cultural and international  [7]  . The task environment consists of specific external elements with which an organizations interacts while conducting its business. These include customers and clients, competitors, suppliers, labor supply and government agencies. The task environment, which depends largely on the products and services offered by the organization and its business location, may vary from firm to firm. While a firm may to be able to directly influence its mega environment, it can certainly influence its task environment (ICFAI Centre for Management Research, 2003). Working within a large and complex external environment affects a business in terms of its social responsibility, its social responsiveness and its ethical behavior. During the initial years of the 20 century, business entities were predominantly concerned with maximizing their profits. In the 1970s, social advocates started to question industry enterprises singular objective of profit maximization. They argued that because businesses receive their existence from society, they need to have a little obligation towards it. The concept of social responsibility became popular after the publication of Howard R. Bowens Social Responsibilities of Business. Bowen argued that business enterprises should consider the impact of their decisions on society. The operational definition of social responsibility is as follows: Social responsibility contends that management is responsible to the organization itself and to all the interest groups with which it interacts. Other interest groups such as workers, customers, creditors, suppliers, government and society in general are placed essentially equal with shareholders (ICFAI Centre for Management Research, 2003). According to the above stated definitions, business entities should pay attention to the welfare of workers, consumers needs and their security, the wellbeing and privileges of creditors, government regulations and the obligations of the enterprise towards the social order as a whole. Nowadays, numerous organizations are concerned about social activities and are playing an active role in the same. While the outlook of the society have transformed, companies have become further conscious of their social responsibilities. A cautious analysis of opinions for and against the participation of organizations in social welfare activities is essential to conclude whether an organization should employ social programs. Arguments favoring Social Responsibilities of Business The needs of present day customers have changed, ensuing in a change in their outlook of businesses. As businesses oblige their profits to humanity, they have to thus counter to the needs of the society. Society and business gain mutual advantage when there is a symbiotic association between them. Society benefits through economic expansion and the proviso of employment prospects; and business gains through the employees and customers provided by the same society. By being socially responsible, business entities attract a smaller amount of attention from regulatory agencies, this gives them superior liberty and suppleness in their operations. Businesses have substantial command and influence. The application or use of this command should be accompanied by an equivalent amount of accountability. Most firms are open systems, that is, they interact with the external environment. The internal activities of such firms have an impact on the external environment to avoid negative impact on the external environment, firms should be socially responsible. In addition, by being socially involved a company can improve its image and thus protect its shareholders interests (ICFAI Centre for Management Research, 2003). Social responsibility entails the preservation of natural resources. Preservation can be beneficial for organizations. Through social involvement, a firm can create a favorable public image for itself and endear itself to society, by so doing a firm can attract customers, employees and investors. Businesses have a history of coming up with innovative ideas, therefore they are likely to come with solutions for social problems, which other institutions were unable to tackle. Businesses should make the best possible utilization of the expertise and aptitude of its managerial workforce and also its capital resources in order to manufacture good quality products and services. Thereby, the businesses will be able to accomplish their responsibility towards the society. It is in the interest of the business entity to avoid social harms. Instead of allowing large scale unemployment to lead to social unrest, which in turn will harm business interests, businesses can be resources of employment for qualified youth. Arguments against social responsibility of businesses The most important rationale of a business is revenue maximization. Hence social involvement may not be reasonably feasible for a business. When a business incurs disproportionate cost for social participation, it passes the charge on to its clientele in the form of elevated prices. Society, therefore, has to tolerate the burden of the social participation of business by paying elevated prices for its merchandise. A destabilized international balance of payments state may be created by the social participation of organizations, as the cost of social programs would be appended to the cost of the goods, the multinational companies doing business in international markets would be at a inconvenience when contending with domestic companies which may not be involved in social actions. Businesses are intrinsically prepared with a firm amount of power. Their participation in social activities can lead to an augment in their influence and power. This boost in power and influence may corrupt them. Business people do not have power over the necessary skills to tackle social problems. Their proficiency and knowledge may not be pertinent to deal with such problems. Until a proper method to establish the responsibility of businesses is developed, they should not get implicated in social activities. There is no conformity regarding the kind of socially responsible actions that a business should embark on (ICMR-ICFAI Centre for Management Research, 2003 Ref.no.BECG BR 122K3 08). Business owners have their own sense of skewed ideas of doing business and their business practices. When businesses take up social responsibilities, the business owners tend to get these quirks into such actions too. This might at times lead to disastrous consequences. As in most situations there is no firm right thinking or wrong thinking. Businesses getting involved in social activities have their own strengths and weaknesses. There are definitely both sides to the coin. A mere word of concern is that, there must be a sense of balance when businesses get involved in social activities and they must not go overboard nor overlook the primary purposes of their businesses. Social Stakeholders Business executives, who are worried about corporate social responsibility need to recognize a variety of interest groups which may persuade the operation of a firm and which, consequently, may be influenced by the organizations decisions. Business enterprises are primarily accountable to six major interest groups namely the shareholders, employees, customers, creditors and suppliers, the social order and the administration. These groups are otherwise known as the social stakeholders. Shareholders The prime accountability of a business is to protect the interests of its shareholders. The shareholders provide the core resource the capital that enables the organization to operate and grow. They expect the management to use the capital judiciously and operate the business in a way that ensures a good return on their investment, both through dividends and through increase in stock value. Shareholders should be provided with adequate and timely information about the functioning of the organization. The IKEA Group  co-operates with other companies, trade unions and organizations that represent stakeholders throughout the world. These include Building and Wood Workers International, Clean Cargo Working Group and dialogues with Greenpeace (IKEA, 2009). Employees Employees are the principal assets of an organization. Traditionally, managers regarded employees only as factors of production and denied them their rightful share in the distribution of income. However, in the present times, it is mandatory for business firms to protect the interests of their employees. Laws and government regulations now define the responsibilities of the employer. A few such laws include ensuring equal employment for men and women, offering pensions and other retirement benefits, and providing a safe and healthy work environment etc. IKEA products must be manufactured under acceptable working conditions by suppliers who take responsibility for the environment. IKEA is a production-oriented retail company. By being on site and conducting responsible business, IKEA contributes to better manufacturing and working conditions for suppliers and their workers (IKEA, 2009). Customers In recent years, customers have received great attention. Firms have begun to realize the importance of keeping customers happy. Moreover, the growth of consumerism has made firms more aware of their duties towards consumers. IKEA concept in itself is all about offering high-quality products and affordable prices. In order to ensure this, the company constantly works its way about cost-effectiveness and innovation. Creditors and Suppliers Creditors and Suppliers are responsible for providing inputs for production process in the form of raw material and capital. Management is responsible for fulfilling its obligations to its creditors and suppliers. This can be done by: i. Creating long-term and healthy business relationship with them. ii. Making prompt payments to creditors and suppliers. iii. Providing them with accurate, relevant and needed information. The IKEA Group believes that safe, healthy, non-discriminatory working conditions and the protection of the environment at our suppliers are prerequisites for doing good business (IKEA, 2009).As already mentioned above, IKEA has got a special code of conduct that clarifies the expectations of suppliers from the company and also the kind of support that the company offers in order to ensure the smooth functioning of the supply chain. Society Organizations function within a social system and draw their resources from this system. Therefore, they have certain obligations towards society. The management of business organizations can fulfill their obligations toward society by preserving and enhancing the well-being of the members of society. Management can do so in the following ways: i. Using its technical expertise to solve local problems. ii. Setting socially desirable standards of living and avoiding unnecessary and wasteful expenditure. iii. Playing an important role in civic affairs. Volunteers from some companies help the traffic police regulate traffic at busy intersections. Pizza Corner in Hyderabad, India is one such organization. Many companies also put up road signs along highways to encourage safe driving habits. For instance, liquor companies such as Shaw Wallace and United Breweries have put up road signs on mountain roads in various parts of India. These road signs caution drivers against driving under the influence of alcohol. iv. Providing basic amenities, healthcare and education facilities, hence creating better living conditions. v. Establishing development programs for the benefit of economically weaker class of the society. IKEA ensures that it contributes its part to the society by taking steps to prevent child labor. IKEA has a special code of conduct called The IKEA Way on Preventing Child Labor, which is a part of  The IKEA Way on Purchasing Home Furnishing Products. Monitoring of compliance to The IKEA Way on Preventing Child Labor is done by IKEA trading service offices and with unannounced visits by KPMG at suppliers and sub-contractors in South Asia (IKEA, 2009). Government The government of a country provides the basic facilities required for the survival and growth of businesses. The government monitors and, to a certain extent, controls the business systems of the country. Most of the controls imposed by the government are in the best interests of businesses. To fulfill its obligations to the government, the management of business organizations should: i. be law-abiding ii. Pay taxes and other dues fully, timely and honestly. iii. Not bribe government servants to obtain favors for the company. iv. Not try to use political influence in its favor. Measuring Social Responsiveness According to Keith Davis and William C. Fredrick, Social Responsiveness is the ability of a corporation to relate its operations and policies to the social environment in ways that are mutually beneficial to the company and to society (ICMR-ICFAI Centre for Management Research, 2003 Ref.no.BECG BR 122K3 08). Alternatively, it can be referred to the development of organizational decision procedures that enable managers to anticipate, respond to and manage the areas of social responsibility. Though the term social responsiveness is generally applied to business organizations, it is also applicable to not-for-profit organization also. Numerous endeavors have been made to measure social responsiveness. Some companies establish special committees to evaluate their social responsiveness. The various categories for measuring the social responsiveness of organizations are as follows: Contributions Companies make direct financial contributions to charitable and civic projects. Many companies made financial contributions towards relief and rehabilitation work to earthquakes and other similar environmental disasters. Infosys Foundation, set up by Infosys, provides financial assistance to war widows. Fund-raising This involves fund-raising for a social cause, either by the organization itself or by assisting voluntary social organization in fund-raising. Volunteerism Volunteerism refers to the involvement of employees in civic activities. The Boots Company has a volunteering program called Skills for Life, which gives employees a host of opportunities to get involved in community activities in company time. These include giving career talks; conduction mock interviews; supervising students during their work experience period; sharing business skills with local small businesses; and planting gardens and decorating community centers. Recycling To conserve the environment, materials like plastic, paper etc, can and should be recycled into useful products. . Such recycling efforts by business entities reduce the accumulation of plastic waste in landfills. Direct Corporate Investment Often, companies make direct investments to provide facilities for a locality or a community. Attention to consumers Consumers usually have a preference to buy goods that are of good eminence and are secure to use. Pollution Control Pollution is a major problem caused by rapid industrialization. Increasing public awareness and government pressure have made corporations more conscious about the environment. Conclusion Business owners have their own sense of skewed ideas of doing business and their business practices. When businesses take up social responsibilities, the business owners tend to get these quirks into such actions too. This might at times lead to disastrous consequences. As in the majority of situations there is no firm right thinking or wrong thinking. Businesses getting involved in social activities have their own strengths and weaknesses. There are definitely both sides to the coin. Only word of caution is that, there must be a sense of balance when businesses get involved in social activities and they must not go overboard nor overlook the primary purposes of their businesses.