DEBRE TABOR UNIVERSITY

FACULTY OF SOCIAL SCIENCE

DEPARTMENT OF CIVICS
SMALL BUSSINES PLAN ON FURNITURE DESIGN AND
PRODUCTION
PREPARED BY:
GROUP NAME ID
1. TADESE AMARE ………………………………………………………………0155/09
2. WUBIE MESAFINT…………………………………….……………………...0181/09
3. TIGST EWUNETU……………………………………………….……….……0163/09
4. TARKIE MERSHA………………………………………………………….......0159/09
5. SINTAYEHU MEBRIE……………………………………………………….…0153/09
6. GETACHEW SISAY……………………………………………………….........0103/09

SUBMITTED TO: MR. ZELALEM

DEBRE TABOR, ETHIOPIA
AUGUST 22,2022
Table of Contents
1. INTRODUCTION....................................................................................................................1
2. Executive summary..................................................................................................................2
3. Industry Analysis......................................................................................................................4
Target Market Segment Strategy..........................................................................................4
4. Description of ventures............................................................................................................5
5. Production plan.........................................................................................................................6
5.1. Strategy and Implementation Summary................................................................................6
5.1.1 Competitive Edge............................................................................................................6
5.1.2 Sales Strategy..................................................................................................................7
5.1.3 Sales Forecast..................................................................................................................7
6. Organizational plan..................................................................................................................8
7. Financial Plan...........................................................................................................................9
8. Assessment of risk....................................................................................................................9
9. Financial plan...........................................................................................................................9
Projected Cash Flow...............................................................................................................12
Projected Balance Sheet.........................................................................................................13
10. Appendix.........................................................................................................................14
Market penetration..............................................................................................................17
Market development............................................................................................................17
Product development............................................................................................................18
Diversification.......................................................................................................................19
Types of Marketing strategy.......................................................................................................19
1. Paid advertising......................................................................................................................20
2. Cause marketing.....................................................................................................................20
3. Relationship marketing..........................................................................................................20
4. Undercover marketing............................................................................................................20
5. Word of mouth.......................................................................................................................20
6. Internet marketing.............................................................................................................................20
7. Transactional marketing.....................................................................................................................21
8. Diversity marketing...........................................................................................................................21
11. Distance from home country or markets................................................................................24
 1. INTRODUCTION
We will establish furniture design and production of furniture in Debre tabor for the purpose of
solving a problem of society and to get good access of economy since there is supply of
resources.

Furniture refers to movable objects intended to support various human activities such as seating
(e.g., stools, chairs, and sofas), eating (tables), storing items, eating and/or working with an item,
and sleeping (e.g., beds and hammocks). Furniture is also used to hold objects at a convenient
height for work (as horizontal surfaces above the ground, such as tables and desks), or to store
things (e.g., cupboards, shelves, and drawers). Furniture can be a product of design and can be
considered a form of decorative art. In addition to furniture's functional role, it can serve
a symbolic or religious purpose. It can be made from a vast multitude of materials,
including metal, plastic, and wood. Furniture can be made using a variety of woodworking
joints which often reflects the local culture.

People have been using natural objects, such as tree stumps, rocks and moss, as furniture since
the beginning of human civilization and continues today in some
households/campsites. Archaeological research shows that from around 30,000 years ago, people
started to construct and carve their own furniture, using wood, stone, and animal bones. Early
furniture from this period is known from artwork such as a Venus figurine found in Russia,
depicting the goddess on a throne. The first surviving extant furniture is in the homes of Skara
Brae in Scotland, and includes cupboards, dressers and beds all constructed from stone. Complex
construction techniques such as joinery began in the early dynastic period of ancient Egypt.
This era saw constructed wooden pieces, including stools and tables, sometimes decorated with
valuable metals or ivory. The evolution of furniture design continued in ancient
Greece and ancient Rome, with thrones being commonplace as well as the klinai, multipurpose
couches used for relaxing, eating, and sleeping. The furniture of the Middle Ages was usually
heavy, oak, and ornamented. Furniture design expanded during the Italian Renaissance of the
fourteenth and fifteenth century. The seventeenth century, in both Southern and Northern
Europe, was characterized by opulent, often gilded Baroque designs. The nineteenth century is
usually defined by revival styles. The first three-quarters of the twentieth century are often seen
as the march towards Modernism. One unique outgrowth of post-modern furniture design is a
return to natural shapes and textures.
The business requires a means of acquiring this initial capital by borrowing from financial
institution like, banks, personal capital, and micro finance institution. This furniture design and
production delivery provides enterprise planned to construct and establish a business with a
capital of 600,000ETB.
The owners of this furniture design and production business plan have devoted their time,
knowledge, money and resource to prepare this business plan. For this reason, the owner has to
have the patent right in order to protect the business plan which is the output of members of the
partnership not to be copied or transferred to another individuals or companies, “All rights
reserved”. This business plan report is acknowledged by several readers that information to be
furnished by this business plan is in all respects confidential in nature.

2. Executive summary
Furniture Brands design and production will be established in 2023, will be one of the
leading residential furniture manufacturers in the Ethiopia. They distribute and market their
products through a network of independent retailers, interior designers, and mass merchant
stores. Over the life of the company, it will be one of the leading residential furniture
manufacturers in the Ethiopia, yet it will be seen face financial decline for the future. In
order to overcome liquidity and inventory issues, we recommend that Furniture Brands
International focus on the high-end furniture line. It will have forced to markdown large
amounts of old inventory that has not been sold, the majority of which consists of low-end
products. The subsidiaries that produce luxurious furniture, such as Thomasville, have had
positive profit margins, while the company has been unable to sell its low-end inventory.
Another struggle will have to deal with has been inefficient manufacturing, and high storage
costs. They have been forced to markdown large amounts of old inventory that the company
will have been unable to sell. In response to this, we recommend outsourcing the
manufacturing process through contract manufacturing in to solve expensive manufacturing
costs. They could be exposed to new growth markets while cutting costs and streamlining
production. We believe that a combination of concentration of investments and outsourcing
of production should solve Furniture Brands International’s company issues.
We will be formed as a specialized grow company specializing in custom cabinets for the high-
end residential, resort, and commercial market. Its founders have extensive experience in the
construction and industry. It will operate under the umbrella of different company and a
construction company sharing staff, office space, and administration costs. However, for the
purpose of business planning, we are treating Trestle Creek Cabinets as a separate company.

Over some years of being involved with the construction of luxury homes, the company owners
have seen a need for a cabinet line with a broad selection of design choices, high-end finishes,
along with top-of-the-line organization, customer service, and quality. We will meet those
customer’s needs. Building a strong market position in the high-end residential, resort, and
commercial development segments, the company projects revenues to grow substantially. By
maintaining an average gross margin of over 25%, the company estimates handsome net profits.

The company owners have provided the capital to cover the start-up expenses. The company
currently seeks a 3-year commercial loan to cover the operating expenses.

The company objectives are:

 To be a top cabinet supplier to luxury homes in the regional market.

 Revenues to more than double Year1 levels by the end of Year2.
 Aim to have 70% of sales in high-end residential customer segment.
 20% of sales in mid-range residential customer segment.
 10% of sales in commercial development segment.
 To have a showroom within 3 months in a prominent retail space.

Mission
 To deliver a high-quality product, on time and within budget while also providing a fast,
 error free ordering system.
 3.  Industry Analysis
There are two main types of cabinet suppliers in the industry.

1. Resellers of complete cabinet sets using stock items where the cabinets turn up
completely built. Usually have no shop facilities but do have shown rooms.
2. Custom shops with full, in-house fabrication facilities. They are usually very product
orientated and under-perform with customer support.

Trestle Creek Cabinets can provide high volume work, superior project management, and
excellent quality while maintaining a low overhead.

Competition and Buying Patterns

The high-end cabinet market understands the concept of service and support, and is more likely
to pay for it when the offering is clearly stated.

There are many competitors in the local market. Although each of them delivers a quality
product, we feel they fail to deliver a full turnkey package. There are four factors that govern the
cost of all kitchen projects: Scope, Product, Design, and Services. Most people mistakenly think
that the size of the project and the choice of brand name products will make for the best results.
But it is the design and a company’s services that will have the greatest impact on the quality and
value of the customers investment.

Target Market Segment Strategy

Trestle Creek Cabinets will be focusing on contacting contractors and architects that deal with
the luxury home market. Making ourselves known to these entities will generate some strong
leads, along with getting personal recommendations to the home owners.

There are plans to upgrade office space to a showroom in a high visibility location. This will give
us exposure to new home builders that are looking for our product.
 4. Description of ventures
Products

Our product is essentially made with two main components.

1. The boxes and shelves will be ordered from two different suppliers (Cab Parts, Scheers),
and will be delivered in kitset form. They can be finished with custom veneers.
2. The doors, panels, and drawer fronts will come from four different suppliers: Bergmeyer
Manufacturing, Homestead Woods, Decore, and Southwest Door Company. We will
have 4-6 custom designs, with unlimited different custom finishes, available from
Bergmeyer Manufacturing. The other suppliers will provide their stock products.
 5. Production plan
Manufacturing process
A basic preliminary in all furniture production is the provision of working drawings. In a firm
of any size there is invariably a special department where full-size drawings are prepared from
small-scale drawings provided by the designer. In some cases, the designer may make his own
full-size, detailed drawings; but in a large firm it is more usual for a draftsman to work out the
practical details, though usually in consultation with the designer, who advises on proportions
and decorative details. The hand craftsman, in contrast, usually does the whole thing himself.
In the small-scale drawing the general form.
Machinery and equipment
Stationary machines
 Bandsaw.
 Combination machine.
 Double side planer.
 Four-sided planer or timber sizer.
 Drill press.
 Drum sander.
 Bench grinder.
 Jointer
5.1. Strategy and Implementation Summary
Teton County, Wyoming and Idaho are experiencing steady growth in the high-end residential
markets and there is a general consensus of continued growth in the area. Taking part in this
growth, while providing attention to the design development, ordering process, project
management, and installation will put us on the road to success.

5.1.1 Competitive Edge

Our competitive edge is our ability to provide high volumes and flexibility in style, while
maintaining a quality product backed by excellent service.
 5.1.2 Sales Strategy
Our sales strategy is to make ourselves known through mailings, print advertising, and personal
contact to architects and contractors who are primarily involved with the design/construction of
commercial development and luxury homes.

Having a showroom will be a sales tool in itself. A showroom will give us exposure to the
general public, new arrivals to the area, and construction professionals.

5.1.3 Sales Forecast

The following table shows projected cabinet sales. As the company gets established in the
market, we anticipate strong sales growth over the next three years.
 6. Organizational plan
Martin Kribs, President, has 20 years of construction experience, from general contracting,
construction management, and having his own cabinet business.

Brent Palmer, V. President, has three years of construction experience and spent the last six years
in management within the hospitality industry. As the company grows, we will take on an
administration/showroom assistant.

Personnel Plan

This table shows salaries for the whole company. Salary increases are kept to a minimum to help
the growth of the company. An administrative assistant will be hired later in the year.

Personnel Plan

Martin Kribs $24,000 $38,000 $45,000

Brent Palmer $24,000 $35,000 $40,000

Carpenters $18,000 $60,000 $85,000

Administration Assistant $12,000 $24,000 $25,000

Total People 4 6 7

Total Payroll $78,000 $157,000 $195,000

 7. Financial Plan 
Below are the initial financial goals for the company:

 Obtain an operating line of credit from a financial institution.

 Finance growth through retained earnings.
 Operate on a 25-30% gross margin.

The financial plan for Trestle Creek Cabinets is outlined in the following sections.

8. Assessment of risk
Different types of risks and challenges are expected during establishment and operation of the
enterprise. Most of these challenges are common to aquaculture systems in general, whereas a
few appear specific to the case of Ethiopia.

9. Financial plan
The financial plan depends on important assumptions, most of which are shown in the following
table as annual assumptions.

General Assumptions

Plan Month 1 2 3

Current Interest Rate 10.00% 10.00% 10.00%

Long-term Interest Rate 10.00% 10.00% 10.00%

Tax Rate 16.25% 15.00% 16.25%

Other 0 0 0
Break-even Analysis
As the business settles in and start-up/showroom costs are met, average monthly operating costs
will increase and then stabilize. The average per unit price is for a 24″ base unit. This table
shows we need to sell 16 units or 32 lineal feet of cabinets a month to break even.
Projected Profit and Loss
Our projected profit and loss is shown in the following table.
Projected Cash Flow

We do not expect to have major problems with cash flow as most of our contracts will require a
50% deposit upon signing.
 Projected Balance Sheet

The balance sheet shows a healthy growth of net worth and a strong financial position.
10.Appendix
B. BASIC QUESTIONS

2. read in detail and write about

 meaning of Ansoff – matrix growth strategy?

 Types of marketing strategy?

The Ansoff Matrix, often called the Product/Market Expansion Grid, is a two-by-two framework
used by management teams and the analyst community to help plan and evaluate growth
initiatives. In particular, the tool helps stakeholders conceptualize the level of risk associated
with different growth strategies. The Ansoff Matrix, often called the Product/Market Expansion
Grid, is a two-by-two framework used by management teams and the analyst community to help
plan and evaluate growth initiatives. In particular, the tool helps stakeholders conceptualize the
level of risk associated with different growth strategies.
The Ansoff Matrix is a fundamental framework taught by business schools worldwide. It is a
simple and intuitive way to visualize the levers a management team can pull when considering
growth opportunities. It features Products on the X-axis and Markets on the Y-axis.
The concept of markets within the Ansoff framework can mean different things. For example, it
could be a jurisdiction or geography (i.e., the North American market); it could also mean
customer segments (i.e., target market/demographic).
The Matrix is used to evaluate the relative attractiveness of growth strategies that leverage
both existing products and markets vs. new ones, as well as the level of risk associated with
each.
Four strategies of Ansoff matrix 
Ansoff divides the matrix into four strategies based on new products, existing products, new
markets, and existing markets. The four strategies are:

 Market penetration

 Market development

 Product development

 Diversification
 Market penetration

 The company sells existing products to existing markets.

 The market penetration strategy is the least risky compared to the other three options. The
company has the historical experience to know the risks, opportunities, and areas for
improvement from the previous approach.
 Under the penetration strategy, the company seeks to increase its market share for its
current products. They can evaluate past approaches to design more effective marketing
strategies and tactics.
 Companies can increase market share in several ways. First, they can stimulate existing
customers to buy more. More effective advertising campaigns, sales promotions, loyalty
schemes, and cutting prices are some options.

Second, the company encourages customers to move away from competing products. Therefore,
companies must ensure their products are more satisfying than competitors, such as quality
improvements, added features, and superior after-sales service. It usually also requires a more
aggressive advertising and promotion strategy.
Third, the company stimulates potential customers to buy and use the product. Some people may
still not buy the company’s products or competitors’ products. It usually occurs during the
beginning of the product life cycle, when some people are not aware of or interested in trying the
product. In other words, the market is still growing.
Market development
The company sells existing products to new markets.
The new market may be a foreign market. Or it is another region within a country. Or, companies
target different segments for their products. To find new potential markets, companies must carry
out systematic market research. Then, they individually target clearly identified market
segments. New markets may require firms to develop new marketing and distribution channels
for each market.
Sometimes, a new market also requires an entirely new approach or business model. When
entering new markets, companies need more detailed information from market analysis,
including about:
  Macro environment: using the PESTEL analytical approach

 Market segment: identify the most profitable segment using several market segmentation
techniques

 Consumer profile: preferences, purchasing power, and tastes.

 Market size: current vs. potential size, trends, and growth

 Market profitability: how profitable is the new market to exploit

 Competition intensity: through Porter’s Five Forces approach, for example.

 Distribution and communication channels: how the company should reach potential

customers effectively

Product development
The company launches new products to the existing market.
Companies can take several options for new products. First, a new product may be a new variant
of an existing product. The company launched it to complement its product portfolio. This
strategy minimizes the risk of acceptance by existing consumers. Second, new products are the
result of new innovations using current core resources and competencies. Through intensive
market research and past experience, the company designs it to suit today’s market needs.
The second strategy is riskier than the first. Companies must allocate more resources and time to
develop and market products. On the other hand, such new products often generate consumer
resistance because they are reluctant to take risks to try products.
In general, the success of product development depends on:

 Ability to conduct research and understand customer and market needs

 Internal capability to drive innovation and develop new products

Diversification
The company sells new products to new markets. The diversification strategy is the most
aggressive and riskiest compared to the other three strategies. The first risk concerns the
uncertainty about the acceptance of a new product. Consumers may be unwilling to try new
products, for example, because they have no previous experience.
The second risk is about new markets. The company may not have experience with new markets.
Therefore, they need in-depth research to provide deeper insights into new markets. Analyzing
the market as in a market development strategy is one crucial step.
In carrying out a diversification strategy, companies, in general, can take two options:

 Synergistic diversification

 Conglomerate diversification

Under synergistic diversification, the company uses existing knowledge. New markets and
products are around existing products or markets. Synergic diversification is relatively low risk
because the company has the knowledge to implement strategies, be it about production,
marketing, or distribution channel development. Meanwhile, conglomerate diversification
involved an entirely new area. The company will probably develop it internally. However, it
usually consumes resources and tends to be slow to grow sales.

Types of Marketing strategy

Marketing strategy is used by different companies to collaborate with their consumers. It is also
employed to aware the customers about the features, specifications and benefits of company’s
products. It is basically focused on encouraging target population to buy those specific products
and services. Effective marketing strategies help to get ahead in the competition.
There are different types of marketing strategies available. Picking up a marketing strategy
includes analyzing the needs of your business, your target audience and specifications of your
products.
The two main types of marketing strategy are:

 1. Business to business (B2B) marketing

  2. Business to consumer (B2C) marketing

The most common form of marketing is business to consumer (B2C) marketing. Let’s explore a
bit more.
Following are the different types of marketing strategies available.

1. Paid advertising
This includes multiple approaches for marketing. It includes traditional approaches like TVCs
and print media advertising. Also, one of the most well-known marketing approach is internet
marketing. It includes various methods like PPC (Pay per click) and paid advertising.

2. Cause marketing

Cause marketing links the services and products of a company to a social cause or issue. It is also
well known as cause related marketing.

3. Relationship marketing
This type of marketing is basically focused on customer building. Enhancing existing
relationships with customers and improving customer loyalty.

4. Undercover marketing
This type of marketing strategy focuses on marketing the product while customers remain
unaware of the marketing strategy. It is also known as stealth marketing.

5. Word of mouth
It totally relies on what impression you leave on people. It is traditionally the most important
type of marketing strategy. Being heard is important in business world. When you give quality
services to customers, it is likely that they’d promote you.

6. Internet marketing
It is also known as cloud marketing. It usually happens over the internet. All the marketing items
are shared on the internet and promoted on various platforms via multiple approaches.
7. Transactional marketing

Sales is particularly the most challenging work. Even for the largest retailers, selling is always
tough especially when there are high volume targets. However, with the new marketing
strategies, selling isn’t as difficult as it was. In transactional marketing the retailers encourage
customers to buy with shopping coupons, discounts and huge events. It enhances the chances of
sales and motivates the target audience to buy the promoted products.
8. Diversity marketing
It caters diverse audience by customizing and integrating different marketing strategies. It covers
different aspects like cultural, beliefs, attitudes, views and other specific needs.

9. Offline Marketing
Offline Marketing also goes by the name of traditional marketing. It means businesses the
business and companies employ traditional channels for marketing. Like, TV, radio, print media,
billboards, pamphlets, and newspaper ads are some of the main examples of offline marketing.

3. identify and discuss at least Business expansion issues needed attention?

1. Affordability
One of the first things you must consider is how much it will cost the business to expand
internationally. Conducting your operations overseas comes with a variety of costs, from office
space to travel, customs, shipping, and manufacturing. These costs vary widely across countries
and international regions as well as unique costs applying only to international expansion.
Customs, for instance, are specific to international business, while bribery, while illegal in the
US when it comes to paying government officials, is standard practice in some countries if you
want to get things done. Work with professionals who can guide you regarding costs associated
with the specific expansion area to ensure you have the budget to make expansion feasible.

2. Tax and employment regulations

Different countries and regions have different regulations when it comes to taxes and
employment. For instance, the US has strict regulations on employee safety, through OSHA,
while other countries may have lax laws governing employee safety. And, it’s not always that
straightforward. For instance, Mexico has a number of different agencies governing employee
safety, each with its own regulations that are sometimes contradictory.
3. Your marketing techniques
This might seem like an obvious one, but it’s still something you can’t ignore. When expanding
globally, you must alter your marketing techniques and messaging so they fit expectations (and
laws) in different countries. Language is an obvious consideration, but the deeper meaning of
messaging across cultures impacts success more.

In marketing, we have a rule: think globally, act locally, which translates into a single brand that
adapts messaging to fit unique aspects of the culture. Often, hiring a local marketing firm helps
position your brand in the best light to locals.
4. Hiring employees internationally
Whether you’re planning to open offices globally or simply having remote workers in different
countries, you must consider who you’ll hire for the various roles. In an international market, the
talent pool varies dramatically in terms of skills, availability, and culture. Therefore, you might
feel challenged to find the best employees for your business, determine the proper management
style with cross-cultural employees, and training employees.
5. Fulfillment
If your business revolves around creating products for customers and your planning to operate
internationally, you need to ensure you have an efficient fulfillment strategy in place from the
beginning. For instance, before Hyundai brought the first automobile to the US, the brought
boatloads of the parts necessary to customize and repair their cars. Thus, when customers bought
cars, they had no problem getting parts, which made for high customer satisfaction.

From warehousing to packaging and shipping, you need fast logistics that is high-quality and
budget-friendly for your business. You must find a company to handle worldwide fulfillment –
such as online at Fulfillment.com. Companies like this align with your plan to expand into new
markets by offering quick delivery and shopping software (among other helpful features).
6. Packaging
Following on our discussion of logistics, another thing you must consider is international
packaging. Regulations for packaging vary in different countries, so you must ensure you’re
packaging correctly. Recognize that packaging must align with sustainable practices in some
regions and is an integral part of your marketing regardless of where you go. Legal requirements
for disclaimers on the package also impact your decisions. For instance, many developed nations
require disclaimers on cigarettes while less developed nations may forgo such informative
instructions.
7. Due diligence
One of the first things you should do when making business decisions associated with
international expansion is due diligence. But how do you take into account all the possible
scenarios? Well, you or your staff might spend some significant time in the countries under
consideration to gain a more nuanced understanding of the systems in play or hire a local firm to
support expanding your business internationally.
8. Currency
Currency is a hot issue in any international endeavor. First, exchange rates fluctuate, sometimes
widely. This increases the risk faced when expanding your business internationally since you
can’t peg your prices to the international exchange rate. In times of great fluctuation, like
happened recently in Venezuela, you might find yourself selling products at a loss, which is
never good.

Further, most countries impose restrictions on taking money out of the country. Thus, your
profits might be tied up in the country earned, which limits your flexibility in employing those
profits to meet financial obligations outside the country.
9. Quality assurance
Quality is always something to consider and expanding internationally doesn’t imply more or
less emphasis on quality. It does, however, mean different standards of quality across some
cultures in concert with other differences in needs. Traveling long distances might also impact
quality at delivery from initial quality when the product left its home country. For instance, fresh
produce crossing large distances might face increased chances of spoilage or bruising. Put in
place a system of quality assurance that takes such issues into consideration.
10. Economic and political stability
The world is unpredictable – both in terms of politics and the economy. So, when you’re
planning to expand your business globally, you must ensure your business has fully considered
the level of risk associated with expansion since higher levels of risk require higher levels of
reward (profit) as compensation. Use prevailing and historical information, as well as forecasting
to limit your risk by choosing countries with less unpredictability.

11. Distance from home country or markets

Geographical distance is a vital consideration when identifying where you can feasibly expand.
In the beginning, you might be tempted to dive headfirst by expanding into the first country that
shows interest in what you have to offer. But you need to ensure that it’s a country that’s within
easy reach so you can successfully deliver products to meet demand. For instance, China is
appealing due to low wage costs and huge numbers of prospective employees. 
12. Brand recognition
Expanding your business internationally may mean going into countries where you have little or
no brand recognition. That means significant investment in advertising to create awareness of
your brands and build favorable attitudes to support the purchase. In other cases, your branding
doesn’t work in the country you wish to enter. For instance, the Ford NOVA (which is now
retired), means no go in Spanish, which doesn’t bode well for car sales.

4. What mean by ethics and Social Responsibility?

Ethics or moral philosophy is a branch of philosophy that "involves systematizing, defending,
and recommending concepts of right and wrong behavior". The field of ethics, along
with aesthetics, concerns matters of value; these fields comprise the branch of philosophy
called axiology.

Ethics seeks to resolve questions of human morality by defining concepts such as good and evil,
right and wrong, virtue and vice, justice and crime. As a field of intellectual inquiry, moral
philosophy is related to the fields of moral psychology, descriptive ethics, and value theory.

Three major areas of study within ethics recognized today are:

1. Meta-ethics, concerning the theoretical meaning and reference of moral

propositions, and how their truth values (if any) can be determined;
2. Normative ethics, concerning the practical means of determining a moral course
of action;
 3. Applied ethics, concerning what a person is obligated (or permitted) to do in a
specific situation or a particular domain of action.

Social responsibility is an ethical theory in which individuals are accountable for fulfilling their
civic duty, and the actions of an individual must benefit the whole of society. In this way, there
must be a balance between economic growth and the welfare of society and the environment. If
this equilibrium is maintained, then social responsibility is accomplished.

5. Identify and discuss about basic approaches to corporate responsibilities?

Obstructive
Companies that take an obstructionist stance to social responsibility normally attempt to defend
their economic priorities by blocking any attempts to point out the lack of social responsibility.
Making profits is the most important aspect of their business and although they are proud of it,
they will deny any wrongdoing and use any obstacles available to them to deliberately derail or
divert investigation of their practices when faced with specific social demands.
Defensive
Companies that take the defensive approach to social responsibility aren’t socially responsible
but they do a somewhat good job of hiding it. Making profits is way more important to them than
performing socially responsible actions. They consider themselves neutral hence social
responsibility isn’t a topic you can openly take up with them.
These companies make a point of following the law to ensure that others cannot take legal action
against them. This does not mean that they do not perform actions that are detrimental to both
society and the environment, they just look for legal ways of protecting themselves from
lawsuits.
Accommodating
Companies that take this approach actually believe that social responsibility is just as important
as making a profit. They satisfy all legal requirements and normally attempt to meet ethical
standards. Such companies remain transparent about why they take specific actions and strive to
be valuable to the society and the environment instead of hiding their actions. These companies
may even decrease waste creation, do away with animal-tested products and pay their
employee’s fair wage.
Proactive
Companies that take a proactive approach to social responsibility make it a priority even if doing
so ends up cutting into their profits. They try to remain ahead of the curve in regards to social
responsibility instead of reacting to criticism of their actions. Most of them even include ethics in
their mission statement and try to avoid any harm to the environment, the society or their
employees.

Some of the actions associated with a proactive stance in companies include giving all
employees living wage and benefits, instituting new recycling programs and donation of a
portion of their profits to charity.
6. What are the basic business ethics principles people needed to fulfil in their organization
1. Honesty
2. Fairness
3. Leadership
4. Integrity
5. Compassion
6. respect
7. responsibility
8. Loyalty
9. Law-abiding
10. accountability
11. Transparency
12. Environmental consciousness