Effect of environmental policies on costs and profitabilityof company in purchasing decisions of healthcare institutions

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. © 2009 All Rights Reserved by the International Multidisciplinary Scientific GeoConference SGEM Printed in Sofia, Bulgaria.