2.1 - Growing the Business (2.1.4 Business Ethics and the environment set 4 of 4)

Question 1

2.1.4 - Define the term ‘ethics’.

Answer 1

Ethics is about what is morally right and wrong. When businesses act in a way that stakeholders consider fair and honest, they are said to be displaying ethical behaviour.

Question 2

2.1.4 - What is a trade-off?

Answer 2

• A trade-off is a compromise between one thing and another. There is often a trade-off or compromise between making a profit and being ethical as ethical behaviours often come at a higher financial cost, so businesses must often decide between being ethical or being more profitable.

Question 3

2.1.4 - What is a pressure group and what actions do they take?

Answer 3

Pressure groups are organisations with shared aims that aim to influence an organisations behaviour, policies or issues such as workers rights, products produced, the environment or animal rights for example. Pressure groups can:

• Instigate strikes
• Encourage boycotts
• Carry out media campaigns
• Organise protests

Question 4

2.1.4 Why is it important for a business to be ethical?

Answer 4

So that they produce an ethical brand image. An unethical brand image can lead to bad publicity which may cause people to boycott their business leading to a deacrease in revenue and less market share.

Question 5

2.1.4 - How can businesses ensure they act ethically?

Answer 5

• By manufacturing products in ways that don’t harm the environment. E.g. using renewable energy sources and not wasting raw materials
• Treating workers and suppliers fairly, eg paying fair prices or above the minimum wage
• Being honest with customers, eg accurate labelling and promotions
• Ethical sourcing of materials, eg fairtrade
• Meeting government requirements and legislation