Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

A Level Business Theme 3 > 3.4.4 Business ethics > Flashcards

3.4.4 Business ethics Flashcards

1
Q

paying lip service

A

saying it but dont believe it

saying it to attract customers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

rise in consumerism

A

increase in how we expect a business to behave

increase in care/concern in how business behaves/operates

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

ethics

A

moral guidelines that govern acceptable behaviour
about what is right and what is wrong

  • mandatory legislations encourage right thing e.g. carbon emissions sugar tax, gender Pay gap
  • concern actions which can be assessed right/wrong by reference to morale principles
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

business ethics

A

morals and principles that underpin business behaviour

importance of : ‘business that makes nothing but money is a poor kind of business’ Henry ford

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

7 ways how do business ethics affect strategic decision making?

A 
1-manufacturing (method and location) 
2-suppliers 
3-distribution (environmental) 
4-source of raw materials 
5-marketing: pricing and advertising 
6-staff (conditions age, pay, discrimination) 
7-environment (CO2 footprint)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

5 common areas where ethics are tested:

A 
1-advertising, personal selling 
2-contracts (bribery/corruption) 
3-suppliers 
4-pricing (predatory) , super normal profit) 
5-pay and rewards
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

super normal profit

A

excessive amount of profit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

approaches to ethics

A
  1. ethical:(ethical practice at the core of businesse.g. Lush
  2. responsive:(accepts being ethical can pay off e.g Primark)
  3. legalistic: will obey the law but nothing more than that
  4. amoral: seeks to win at all costs (anything acceptable) child labour
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

ethics and pay

A
  • ways employees and management are rewarded differently = create significant ethical issues
  • strong ‘bonus culture’ in financial service is good e.g.
  • driven by large bonuses incentives (do management cut corners or break rules?)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

banker’s bonuses:

A

-putting a cap on bonus (no more than a year salary)
-in city of London = leads to higher salary = more fragile sector as not under as much pressure to get bonus
“FAT cats” is it ethical CEOs should be paid many times better than average for employees in their business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

ethics, pay and rewards (possible conflicts):

A

PAY:

  • minimum legal standards (government)
  • living wages
  • if chose to pay extra = costs (efficiency)
  • fair wage (living costs, risks involved, difficulty of work, comparable to industry average, gap (between management and subordinates and genders)

REWARDS:

  • bonuses = excessive
  • commission = corrupt practices to entice customers
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

arguments for and against rewarding CEOs with huge salaries and bonuses

A

for:
- centralised, carrying risk/significant decisions = pay
- complete responsibility all the time (stressful/pressured)
- fully accountable
- deserve bonus if correct strategic decision
- more experienced/skilled = increased salary

against:
- promoting inequality (delegate)
- demotivate subordinates (do operational work)
- already receiving a large basic salary
- sacrifice their bonus retained (long termist)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

law

A
  • about what is lawful and what is unlawful

- mandatory (financial accounting, gender pay, legislation= health and safety, environment, employment)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

legal vs ethical vs self interest

A

legal:
- equal pay for equal work
- providing equal opportunities
- selling products that do what they say they will do

ethical:
- providing safe working conditions
- 0 pollution from factory
- using organic ingredients
- running a computers for schools promotion

self interest:

  • providing company cars to staff (non financial fringe benefit)
  • ensuring high quality products
  • paying for staff on degree courses (L & E)
  • advertising company’s commitment to environment (S&E)
  • refusing to collude with rivals to fix prices (L&S)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

factors influencing the extent to which a business is ethical ?

A
  • type of objs
  • where business operates
  • type/size of business
  • finance available
  • target market (consumerism)
  • past experiences
  • stance/viewpoint of leader
  • social media/local community views/values
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

benefits and drawback of behaving ethically

A

benefits:
- higher revenue = demand from positive consumer support
- improved brand and business awareness & recognition
- better employee motivation and recruitment
- new sources of finance e.g ethical investors

drawbacks:
- higher costs - e.g. sourcing from Fair-trade suppliers rather than lowest price
- higher overheads e.g. training and communication of ethical policy
- danger of building up false expectations

17
Q

ethical trading policy

A

code of practice for a business
choose voluntarily to follow and publish

includes:
- commitment in terms of adequate budget
- checks to ensure all parts of supply chain = adhering to policy
- corrective action = make sure problems are identified and action is taken
- communication = make sure every member of staff is on board with ethical trading policy

18
Q

social costs

A

costs to society - negative externalists

19
Q

ethics and the supply chain

A
  • business cant claim to be ethical firm if ignores unethical practices by its suppliers e.g.:
  • use of child labour & forced labour (Nike, gap, CK, H&M)
  • production in sweat shops
  • violation of basic rights of workers
  • ignoring health, safety, environmental standards

-ethical business has to be concerned with behaviour aof all businesses that operates within its supply chain i.e suppliers, contractors, distributors

20
Q

exploitation of child labour

A
  • exploitation of children who have no power
  • low wages
  • unacceptable conditions
  • no education
  • kidnapping from families
  • slavery and trafficking
21
Q

ethics vs profitability

A

more ethical = costs = lower profit

22
Q

6 benefits of being ethical

A
  1. consumerism = profitable = “good” = USP/differentiate
  2. premium pricing = added value
  3. good reputation = increases customers & mkt share
  4. suppliers = easier to gain contracts
  5. env benefits = efficiency gains
  6. attract investment = grants/government
23
Q

drawbacks to being ethical

A
  1. expensive (wages/minimum wage)
  2. ethical resources (price increase)
  3. avoid cost minimum strategies e.g. sweat shops
  4. overheads increase = decrease profit margin
  5. customers price elastic - go cheaper options
  6. costs to oversea/manage logistics
24
Q

trade off

A
  • sacrifice
  • made to get a certain product/experience
  • less of one thing given up to have more of other (one option is exchanged for more of another)
25
Q

sustainability

A

future generations
key ingredient for business success
-more efficient = develop new market build customer loyalty

26
Q

bottom line

A

profitability

27
Q

Corporate social responsibility (CSR)

A
  • extent to which a business addresses the concerns and obligations to its wider stakeholders
  • about organisations obligations to all stakeholders not just shareholders

2001: moral issue
2011: strategic/profit issue

28
Q

why do firms engage in CSR

A
  1. customer related motivation (attract= brand positioning)
  2. profit = efficient = reduce long term costs
  3. brand loyalty/reputation/image (increase comp, e-commerce, globalisation)
  4. altruism
  5. attract investment (ethical investment funds)
    6 reduction in production costs (energy usage/packaging)
  6. avoid pressure group attention
  7. contract benefits (help recruit/motivate/retain employees)
  8. sustainability (right thing to do)
  9. improve access to capital
  10. risk management (address potential legal/regulatory action)
29
Q

altruism

A

being a good citizen (altruistic)

vs paying lip service

30
Q

pressure group

A

group that campaigns about specific issue

  • consumers (boycott/educate)
  • business (change policy/process)
  • government (fines/regulate/pass legislation)
31
Q

lobby

A

influence someone with lots of power

32
Q

shareholder concept

A

Milton Friedman

33
Q

against CSR

A
  1. only social responsibility of bus = to create SH wealth
  2. expensive
  3. false expectations
  4. efficient use of resources = reduced if bus restricted in how they act
  5. stifles innovation (costs)
  6. bus cant decide what is in society’s interest
  7. difficult to please all
  8. scrutiny
  9. extra costs incurred - passed on to consumers

A Level Business Theme 3 (16 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions