4.4.2 Ethics

Question 1

ethics include

Answer 1

Stakeholder conflicts
Pay and working conditions
Environmental considerations:
Supply chain considerations:
ethical sourcing 
society and health 
Marketing considerations:

Question 2

describe pay and working conditions in relation to ethics

Answer 2

Opportunity for MNCs to exploit local workers with low pay and poor working conditions

Introduce western standards

Create jobs

Question 3

describe marketing considerations

Answer 3

Misleading product labelling

• In the UK this is governed by the Trade Descriptions Act – but not applicable in other countries
• UK legislation includes labelling such as size/quantity, price, ingredients, endorsements, how, where and when made, health claims
• Stricter in certain industries e.g. food and pharmaceuticals
• Often pursued by pressure groups and consumer organisations such as watchdogs

Inappropriate promotional activities

• Promoting directly to children
• Cultural difference e.g. the culture of gift giving in China
• Promoting a life style that goes against cultural or religious difference

Question 4

describe supply chain considerations

Answer 4

Exploitation of labour

• The International Labour Organisation (ILO) promotes fair and decent work for workers across society
• Pay, choice and working conditions – to achieve social justice
• Responsibility of MNCs throughout the whole supply chain

Child labour

• Exploitation of children who have no power
• Low wages
• Unacceptable conditions
• No education
• Kidnapping from families
• Slavery

Question 5

describe environmental considerations

Answer 5

Environmental considerations

Emissions and waste disposal

• UK legislation is strict e.g. all publically listed companies have to report their greenhouse gas emissions and abide by laws on how waste is disposed – but is this true in all countries?
• Global impact of industrialisation
• Growth of e-waste

Question 6

why do governments allow company’s to pay low tax

Answer 6

it attracts more businesses
which increases employment opportunities , less unemployment leads to less benefits , higher health and increased skills, which leads to more disposable income which can lead to more spending in local economies. and more people paying tax and corporation tax

Question 7

ethical reasons for and against tax avoidance

Answer 7

for

• company’s objective is to make money for shareholders as they invest money
• fault of government not business

against

• unfair advantage over other businesses who pay tax
• less government tax revenues to spend on services eg NHS
• money ends up in offshore tax havens

Question 8

define tax evasion

Answer 8

illegally not paying tax or declaring earnings

Question 9

define tax avoidance

Answer 9

exploit loopholes in the law