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EFFECT OF ENVIRONMENTAL POLICIES ON COSTS AND PROFITABILITY OF COMPANY IN PURCHASING DECISIONS OF HEALTHCARE INSTITUTIONS

AUTHOR/S: A. TUKEL, O. YARAR, O. OZYARAL
Sunday 1 August 2010 by Libadmin2009

9th International Multidisciplinary Scientific GeoConference - SGEM2009, www.sgem.org, SGEM2009 Conference Proceedings/ ISBN 10: 954-91818-1-2, June 14-19, 2009, Vol. 2, 729-736 pp

ABSTRACT

The theory of corporate social responsibility promotes, without regarding sector
differences, all corporations not to consider only economic and financial issue, but also
stakeholders as well as social and environmental burdens born to community where the
company operates.

The Neo-classic model of corporate social responsibility recommends companies to
obey moral minimum while seeking maximum profits and within this context, the
model advises particularly to integrate corporate social responsibility into purchasing
strategies1.

Healthcare institutions, which are required to be a role model, should have a duty which
encompasses creating profit in one side and behaving more carefully in terms of social
and environmental responsibility and those institutions should follow particular
implementations to balance financial performance with social responsibility.

Superior model of sustainable development emphasizes the necessity that businesses
should have rational behavior and ethical responsibility for use of resources in
acceptable rates and compensating resultant losses. A company is strictly subject to the
duty that it has to ensure company operations are ecologically sustainable. Primary
requisite of this implementation is that healthcare institutions should be subjected to
legal, financial and reputation risks due to their anti-environmental acts. When many
financial factor related to corporatre social responsibility are summed, they have
qualifications to ensure rational decision makers voluntarily accept said factor set.

Environmentally preferable purchasing is a product/service purchasing activity whereby
environmental impacts are considered and found to cause less damage on environment
and human health when compared with competitor products/services. It also includes a
gradual and continuous process where a hospital continually reviews and expands scope
of efforts for selecting environmentally substantial, healthy and safe products.

Environmentally preferable purchasing provides significant cost savings in economical
aspects for healthcare institutions such as reducing overheads, avoiding waste and
decreasing responsibility and professional health costs and thus, it creates positive effect
on profitability.

In this study, economic benefits provided due to integration of social values into
purchasing activities by healthcare institutions, which should be a model in terms of
social responsibility and environmental conscience, are investigated and modest
recommendations on this issue are developed.

Keywords: health, environment, finance, cost, purchasing

PAPER 2009/s22.3: EFFECT OF ENVIRONMENTAL POLICIES ON COSTS AND PROFITABILITY OF COMPANY IN PURCHASING DECISIONS OF HEALTHCARE INSTITUTIONS

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