3.4.4 Business Ethics 🌎

Question 1

What are ethics?

Answer 1

Considerations of the rights and wrongs of the business - the principle of norms that govern business behaviour

Question 2

What’s may unethical business decisions do?

Answer 2

damage the brand and result in a loss of profitability

Question 3

Why are unethical decisions pursued?
What are customers pressuring businesses to do?

Answer 3

result in higher levels of profit for the business (or its owners)

Customers around the world are putting more and more pressure on brands to behave ethically

Question 4

What are the four ethical considerations businesses have to consider?

Answer 4

Marketing considerations

supply chain considerations

Stakeholder conflicts

Environmental considerations

Question 5

What are the three stakeholder conflicts?

What made management sacrifice to be ethical?

Answer 5

Management vs. workers - Management - be focused on output or reducing costs

worker safety - creating a positive working environment

Management vs . owners - The owners (shareholders) want management to maximise profits -

workers- assets , be less interested in the mental well-being of the employees

The management- will often sacrifice some profit in the interest of looking after their workers health and mental well-being

Company profit vs. resource depletion -
aim to maximise output so as to generate increasing levels of profit

Higher output - more rapid usage of natural resources and generates more environmental damage

Question 6

How many MNCs exploit pay and working conditions?

What may they argue?

Answer 6

May move to a country with different employment regulations and working conditions

MNCs demonstrate unethical behaviour by exploiting workers in LEDCs by paying them lower wages
- argue that the wages they pay provide a decent standard of living within that country

Question 7

What are the two issues that MNCs do to lower economically developed countries?

Answer 7

For working conditions

Child labour

Question 8

What has become a priority for governments?

Answer 8

Climate change and minimising global warming

Question 9

What are the two environmental considerations?

Answer 9

Waste management - developed countries have regulations about how businesses should dispose of their waste

LEDCs usually have less regulation -
MNCs can also dispose of waste in LEDCs at a cheaper cost, which allows them to maintain their high profits

emissions - Emissions are often released from factories or from products made by MNCs -

can cause health issues within local LEDC’s communities

Question 10

What have MNC‘s reduced as a part of corporate social responsibility?

Answer 10

Unethical labour under supply chain considerations

Question 11

What are supply chains ?

Answer 11

The supply chain consists of all the suppliers involved in the manufacturing of a product/service

Question 12

What is the main issue with the supply chain consideration?

Answer 12

Child labour - MNC is moved to LEDCs where children generate income for the family - can easily exploit with bad working conditions

Question 13

What are MNCs under extreme pressure for under their supply chain considerations?

Answer 13

Government and institutions to ensure that their products are not made from child labour

they may receive backlash and boycotts

Question 14

What should MNCs consider under marketing considerations?

Answer 14

The social and cultural differences in the country they operate in

Question 15

What is the main marketing consideration for MNCs?

Examples ?

Answer 15

Misleading labelling -

must comply with countries regulations and info may not have force advertising or be incorrect - ⬆️ sales

Size
content
feature
Functionality

Question 16

What are the seven things that need to implement on ethics for strategic decisions?

Answer 16

The environment - use registration

animal rights - make sure you don’t test unethical or dump waste that affect the environment- wildlife

Workers in developing- countries lower cost easier exploiting

Corruption - big MNC’s may bribe governments to turn away from unethical practices

new technologies - cleaning and also the loss of jobs of the vulnerable - redundant- way of life ?

Product availability - charging a higher price for a necessity such as drugs

Trading issues - condemned from training with other governments due to an ethical issues causing actions or trade embargo’s

Question 17

What is the ethical codes of practice?

Answer 17

A statement on how an employee should act when ethical issues arise

Question 18

How many pay and reward be ethical?

What is it used to maximise?

Answer 18

Use remuneration - reward staff and motivate them through pay - intros they work at their best ability

Maximise productivity levels

Question 19

What is the trade-off between profit and ethics?

Answer 19

increase cost - higher pain wages

reduce revenues- rejecting bribes can reduce the amount of contact you have within the market - making it more hostile

Question 20

What are the 4 benefits and 3 drawbacks of ethical behaviour?

Answer 20

higher revenue - positive consumer support

Improve brand awareness recognition

Higher recruitment and employee motivation better

sources of finance of finance from ethical investors

Negatives

Building up for false expectations

higher costs

higher overheads

Question 21

What is corporate social responsibility? (CSR)

Answer 21

When the business takes responsibility over its impact on the environment and social welfare

Question 22

What are the two types of indicators that indicate corporate social responsibility?

Answer 22

Employment indicators- does a business treat staff Well?

good working conditions
training
equal opportunities

human rights indicators - does it allow employees to join trade unions

Question 23

What are the four things that the business needs to look over CSR?

Answer 23

Community - with your economically given back to your community through jobs, charities, funding local schools

ethics - Responsible marketing -not marketing anything that may be harmful

product responsibility

The environment - Sustainable sourcing of raw materials and components - Protecting the environment

Philanthropic - customer services - checking competitor prices regularly - ensure that the price its customers pay is the lowest available in the local area at that time

Economically - giving back to the community through jobs helping them raise their physical income and GDP to lead to economic growth

Question 24

What’s the negatives of businesses having corporate social responsibility?

Answer 24

Maybe additional costs like preserving the environment - having an environmentally friendly waste disposal - more expensive

Philanthropic- providing good social customer services and well-being of employees is expensive has to be reflected back in price

Extra costs are involved in operating in a socially responsible way and these costs must be passed on to consumers

Question 25

What are the six positives of CSR?

Answer 25

Enhances business image and reputation

attracts stakeholders

can be very profitable as it adds value for many stakeholders

improve employee motivation and productivity

Can help recruit strong candidates

help resolve social problems like resource depletion