3.4.4 Business Ethics

Question 1

ethics

Answer 1

• (ethics) Moral principles that govern a person’s behaviour or the conducting of an activity

Question 2

morals

Answer 2

• (morals) Standards of behaviour; principles of right and wrong

Question 3

Shareholders

Answer 3

• Shareholders are interested in the profit performance of the business and any potential dividend payout from it
• They are less concerned with costly ethical issues and may even discourage ethical initiatives on financial grounds

Question 4

Stakeholders

Answer 4

• Stakeholders are interested in the way that suppliers of materials and components to the business are treated – for example; fair wages and good working conditions
• Pressure groups are interested in the use of child labour and sweatshops in the production process

Question 5

CSR defined?

Answer 5

Corporate Social Responsibility is a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders

Question 6

Corporate social responsibility ?

Answer 6

• Reduce negative environmental impact
• Positive regard for Human rights in
  employment
• Ethical trading policies
  -Using sustainable resources
• Positive links with community
• Reduce climate change

Question 7

Advantages of a CSR approach

Answer 7

• Happy customers; more loyal to a CSR business
• Happy staff; more motivated and productive workers who are proud of the business
that they work for
• Happy investors; more funding and investment will become available, many investors seek CSR businesses
• New products new markets; working in a CSR way will stimulate innovation (in ways to save energy for example)
• Good PR; public relations which show the business in a positive light
• Happy community; trusted relationships built with the local communities
• Happy suppliers; who may choose a CSR business because of their ethical stance
• Cost reductions; in not having to re-hire staff, in energy saving in reducing waste, in keeping loyal customers

Question 8

Disadvantages of a CSR approach

Answer 8

• Fad?; Many business writers speculate that CSR is the latest fad and soon consumers will tire of it and move on to something else
• Motive?; Some businesses may have a CSR policy specifically for the good PR that it creates, the evidence for this is a CSR job would be working inside a PR department of a large organisation
• Cost?; Is the cost larger than the benefits for a business? If the competition are not bothering with CSR that does not necessarily give completive advantage it could just make for a more expensive product
• Care?; Do consumers care that the farmer that grew the coffee beans was paid a fair wage, or will they buy the coffee based on price or a nice looking jar?

Question 9

Ethics of strategic decisions?

Answer 9

• the environment
• animal right
• working in developing countries
• corruption
• trade issue

Question 10

What do ethical codes of practice contain ?

Answer 10

• environmental responsibility
• dealing with customers and suppliers in a fair and honest manager
• competing fairly and not engaging in practices such as collusion or destroyer pricing

Question 11

Ethical objectives

Answer 11

• it will not these it’s products on animals
• it will deal with suppliers fairly
• it will not accept bribes from customers.

Question 12

Issues with acting ethically

Answer 12

• it can raise cost
• reduce revenue

Question 13

Benefits of acting ethically

Answer 13

• ## good for marketing

Question 14

Ethical codes of practice

Answer 14

Statement about how employees In a business should behave in particular employees in a business should behave in particular circumstances where ethical issue arise

Question 15

Living wage

Answer 15

An hourly rate of pay based on the basic cost of living set independently of government and updated annually

Question 16

Remuneration

Answer 16

The reward for work in the form of pay, wages or salary including benefits such as company cars and pensions

Question 17

Sanctions

Answer 17

Sanctions are restrictions imposed on trade or investment with the aim of influencing a policy change in another country.

Question 18

Trade embargoes

Answer 18

Can be included in sanctions where commercial shipments are banned in and out of particular country or where an embargo is placed on a particular product

Question 19

Remuneration

Answer 19

The reward for work in the form of pay,salary or wages, including allowances and benefits such as company cars, health insurance, pension , bonuses and non cash incentives.