3.4.4 Business ethics

Question 1

What are business ethics?

Answer 1

The morals and principles that underpin business behaviour.

Question 2

When are business ethics tested?

Answer 2

During the choice of production method
During the choice of supplier
What products they offer (de-merit goods)
Pricing and marketing
Contracts with staff

Question 3

Name the 4 approaches businesses for ethics?

Answer 3

Ethical
Responsive
Legalistic
Amoral

Question 4

What is CSR?

Answer 4

Corporate social responsibility refers to a business’s sense of responsibility towards stakeholders and the environment in which it operates.

Question 5

Why can a business increase its competitiveness by managing its CSR?

Answer 5

• Increase prices due to ethical sourcing (Fairtrade)
• More customers as demand and trends
• Long-term as nits a sustainable option

Question 6

Why is it difficult to meet all the needs of stakeholders?

Answer 6

• They all have different motivations

- They all have their own opinion of what it means to be ethical

Question 7

What can unethical behaviour do to a business?

Answer 7

Unethical behaviour can damage a firm’s reputation and as a result, can make it unappealing to investors and other stakeholders. i.e. employees.

Question 8

What is the key difference between ethics and CSR?

Answer 8

Ethics is about morally correct behaviour

CSR is about responsibility to all stakeholders and not just shareholders.

Question 9

What are some reasons why a business should be socially responsible?

Answer 9

Longtermist
Appealing to customers (current trends)
Altruism
Better PR
Government legislation

Question 10

What are some reasons why a business should not be socially responsible?

Answer 10

slows growth
Limited resources
Increase prices