4.4.2 - Business Ethics

Question 1

Define ETHICS

Answer 1

having Moral Principles that Govern How a Company Does Business

Question 2

Explain Stakeholder Conflicts

Answer 2

OWNERS - seek High Profits = Wages Low, may not be Paid Living Wage
Cost Low as Possible so Work Conditions Suffer
Work may be Subcontracted to Third Parties who use Child Labour/Forced Labour
- CONFLICT with EMPLOYEES, CUSTOMERS

Question 3

Compare SHAREHOLDER OBJECTIVES Vs ETHICAL CORPORATE OBJECTIVES

Answer 3

SHAREHOLDER - High Profits, High Dividends, Growth, ROI, Positive Corporate Image
ETHICAL CORPORATE OBJECTIVES - Low Emissions, Safe Waste Disposal, Paying for Wage Rates to Employees in Other Countries, Sourcing Sustainable Raw Materials

Question 4

Explain PAY and WORKING CONDITIONS

Answer 4

• some MNC’s Don’t pay Fair Wages that Locals Can’t Live On
• Working Coniditions - in Developing Countries - Owners want High Profits so May Cut Costs on Health & Safety Measure e.g. no Fire escapes

Question 5

Explain Environmental Considerations

Answer 5

• MNC’s Regularly Ignore “Weak” Environmental Laws in India and other Developing Countries
  Owners want to Keep Costs Down, Good Waste Management is Expensive -> so Stakeholder Conflict with Those that Live Near those Toxic Dumps

Question 6

Explain Supply Chain Considerations

Answer 6

• having part of Supply Chain in a Developing Nation is Problem for MNC’s -> many Garment Factories or Intensive Labour Production Process Outsource to Slums and Unlicensed Buck Street Businesses in Poor Working Conditions
• Mean that Labour is Intentionally or Unessentially Exploited by MNC

Question 7

Explain Marketing Considerations

Answer 7

Misleading Labelling : Businesses should Ensure the Labels on Products Aren’t Misleading, so Consumers can make Fully Informed Choice Whether to Purchase and How to Use Once Bought
- Must Contain False Info