2.2 Ethical And Environmental Considerations Flashcards
What are ethics?
Where a business makes decisions based on what is morally right rather than what is more profitable
What are the benefits of behaving ethically?
- Higher revenue
- Improved brand/business awareness and recognition
- Easier to attract and recruit staff
- Increased employee motivation and staff retention
- New sources of finance are possible
What are the drawbacks of behaving ethically?
- Higher costs
- Higher overheads
(All the expenses a company makes that don’t directly contribute to the production of goods or services.)
- Danger of building false expectations amongst consumers
- Bad publicity if business is found to be acting unethically
How can poor ethical behaviour effect different stakeholder groups?
- Customers; Charging high prices when customers have no choice
- Suppliers; paying low prices and delaying payments
- Employees; paying low wages and using child labour
- Local community; creating pollution and inconvenience
How can a business behave ethically in marketing?
- Designing products to reduce the damage they do to the environment
- Avoiding targeting children with advertisements for products with potentially harmful side effects
- Not using a dominant marketing position to set unacceptable high prices
How can a business behave ethically in business operations?
- Buying resources from suppliers that are involved in ethical practices
- Manufacturing products that can be recycled and can be continued in the long term without damaging the environment
How can a business act ethically in human resources?
- Not using zero hour contracts
- Offering employees the opportunity of high quality training
- Paying sufficient wages to allow a decent standard of living
How can a business act ethically in finance?
- Spending money on community facilities
- Pay employees to undertake charitable work during working hours
- Paying correct taxes
What ethical actions can lead to lower profits?
- Using environmentally friendly resources or fair trade products which are more costly
- Providing employees with high quality training
- Offering lower priced products to certain groups
- Acting in a socially responsible way by taking into account the needs of all stakeholders when making decisions
What are fair trade products?
( Supplier - business)
Fair trade products are goods produced under ethical standards, ensuring fair wages and working conditions.
eg Coffee, chocolate, tea, bananas, sugar
What is social responsibility?
An approach to managing business in which the interests of all groups in society are taken into account when making decisions
What are external costs?
When a business’ activities result in harmful effects on other people not directly involved in production (e.g air pollution)
What are the environmental considerations of a business?
- Impact on traffic congestion
- Recycling
- Disposing of waste
- Noise and air pollution
What are the effects of traffic congestion?
- Air pollution
- External costs
What business activities cause air pollution?
- Agriculture
- Manufacturing industries
- Transport
- Power stations
What are scarce resources?
Inputs into the production process that are insufficient to meet needs
What are non renewable resources?
Resources which are finite (only a limited amount exist)
What is global warming?
Gradual heating of Earth’s surface, oceans, and atmosphere
What are ethical objectives?
Targets set by a business with the intention of encouraging the business to behave in a morally correct way which may improve its reputation
What is a pressure group?
A group of people with a common interest who influence public opinion and decisions by business and governments
What is environmental responsibility?
Taking of decisions by businesses, consumers, governments and other groups with the intention of protecting the environment
What is sustainability?
Methods of production which can be continued in the long term without damage to the environment
What are some examples of sustainable production methods?
- Use of renewable sources of energy such as solar and wind power
- Using transport that cause less pollution
- Making products from recycled or renewable materials
- Producing goods and services without the use of chemicals and other products that damage the environment
What is the disposal of waste?
The removal or dumping of unwanted raw materials, the byproduct of manufacturing or finished goods
What is recycling?
The reuse of raw materials used in making products, often for many times. Examples include the reuse of glass, paper, and metals
What decisions can consumers take to help protect the environment?
- Recycle products to reduce waste
- Buy environmentally friendly products
- Complain to businesses when they are seen to cause damage to the environment
What are the advantages of environmentally friendly and ethical policies?
- Environmental reports can result in positive publicity for a business
- Ethical businesses can charge higher prices as customers place greater value on products which do less damage to the environment and stakeholder groups
- Introducing ethical and environmentally friendly methods of production can help a business win new customers by being different to its competitors
What are the disadvantages of environmentally friendly and ethical policies?
- Increase costs
- If the business is found to be lying about their values, it will result in bad publicity
