2.2 Ethical And Environmental Considerations Flashcards
What are ethics?
Wether a businesses decisions are morally right or wrong
Which stakeholders would be concerned with ethics and profit?
Ethics: Business owner (maybe) Local community Customers Employees
Profit:
Shareholders
Suppliers
State 2 ethical considerations
Are the employees payed fairly
Are the employees treated fairly
Are the materials from an oversee child labor factory
Is the businesses advertising truthful.
What might be the effects of being ethical and enviromentaly friendly?
Positive?
You can advertise as being ethical which may lead to a better brand image which might lead to more sales which could lead to more profit
You feel more moral as the business stakeholders
Employees may be more motivated if they are being payed more
Quality may increase with more ethically made materials
Many customers are willing to pay more for a more enviromentaly friendly or fair trade product
It is a good way to distinguish from other competitors
What might be the effects of a business being ethical?
Negative
Cost per unit will increase due to buying from more expensive (and ethical) suppliers. Leading to less profit
You may have to charge higher prices to make up for the higher unit cost leading to
If you arn’t eco-friendly and you say you are it could damage your brand image leading to less sales and less profit
Name 4 areas where a business could be ethical?
Explain
Marketing:
Designing/ selling products that are good for the environment.
Not advertising harmful/bad products such as junk food
Not using your dominant market position to demand unaffordable prices for essential items.
Operations:
Buying from more ethical suppliers
Production products that can be recycled
Human Resources:
Not using zero hour contracts
Offering employees the opportunity to have training (even though it may be expensive)
Paying higher than normal wages to ensure they have a good quality of life
Finance:
Investing more in the local area to improve the area instead of an area which may make more profit.
How else may a business be ethical
Buying fair trade products
Providing employees with training - leading to them wanting a better job elsewhere
Offering low prices to older people/ police…
Acting in a socially responsible way
What sort of environmental concerns do businesses need to consider?
Traffic congestion Air pollution (transporting materials)
What is a external cost?
When business activity’s result in harmful effects on people not directly involved in the production.
How do businesses cause air pollution
4 ways
Agriculture pollution - Using special fertiliser may contain harmful substances for the environment
Industrial pollution - pollution in power stations and whilst producing a product
Transport pollution (air, noise and traffic pollution) this causes traffic as there are more traffic on roads. This leads to there being more noise on roads as there are more cars going past. There are also fossil fuels (non renewable resource) being burned in cars and lorry’s when transporting goods. This leads to more climate change
Why is using non renewable resources unethical
Using them all now means that the future generations won’t have any.
What is global warming?
The gradual heating of the earth.
What is sustainability?
Methods of production which won’t cause damage to the enviroment
What are pressure groups?
Groups that try and pressure the government and businesses to act more enviromentaly friendly.
How can businesess be more sustainable?
Using renewable like solar or wind power
Using reused/ recycled materials
Using electric veicals which don’t cause pollution
Using suppliers which use sustainable methods
