3.4.4 Business Ethics 🌎 Flashcards
What are ethics?
Considerations of the rights and wrongs of the business - the principle of norms that govern business behaviour
What’s may unethical business decisions do?
damage the brand and result in a loss of profitability
Why are unethical decisions pursued?
What are customers pressuring businesses to do?
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
What are the four ethical considerations businesses have to consider?
Marketing considerations
supply chain considerations
Stakeholder conflicts
Environmental considerations
What are the three stakeholder conflicts?
What made management sacrifice to be ethical?
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
How many MNCs exploit pay and working conditions?
What may they argue?
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
What are the two issues that MNCs do to lower economically developed countries?
For working conditions
Child labour
What has become a priority for governments?
Climate change and minimising global warming
What are the two environmental considerations?
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
What have MNC‘s reduced as a part of corporate social responsibility?
Unethical labour under supply chain considerations
What are supply chains ?
The supply chain consists of all the suppliers involved in the manufacturing of a product/service
What is the main issue with the supply chain consideration?
Child labour - MNC is moved to LEDCs where children generate income for the family - can easily exploit with bad working conditions
What are MNCs under extreme pressure for under their supply chain considerations?
Government and institutions to ensure that their products are not made from child labour
they may receive backlash and boycotts
What should MNCs consider under marketing considerations?
The social and cultural differences in the country they operate in
What is the main marketing consideration for MNCs?
Examples ?
Misleading labelling -
must comply with countries regulations and info may not have force advertising or be incorrect - ⬆️ sales
Size
content
feature
Functionality
What are the seven things that need to implement on ethics for strategic decisions?
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
What is the ethical codes of practice?
A statement on how an employee should act when ethical issues arise
How many pay and reward be ethical?
What is it used to maximise?
Use remuneration - reward staff and motivate them through pay - intros they work at their best ability
Maximise productivity levels
What is the trade-off between profit and ethics?
increase cost - higher pain wages
reduce revenues- rejecting bribes can reduce the amount of contact you have within the market - making it more hostile
What are the 4 benefits and 3 drawbacks of ethical behaviour?
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
What is corporate social responsibility? (CSR)
When the business takes responsibility over its impact on the environment and social welfare
What are the two types of indicators that indicate corporate social responsibility?
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
What are the four things that the business needs to look over CSR?
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
What’s the negatives of businesses having corporate social responsibility?
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
What are the six positives of CSR?
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
