7.6c The Social Environment: Ethics

Question 1

Ethics definition

Answer 1

A set of moral values held by an individual or group

Question 2

Internal pressures to be ethical:

Answer 2

• Business leaders
• Shareholders
• Employees

Question 3

External pressures to be ethical:

Answer 3

• Government
• Competitive pressure
• Pressure groups

Question 4

List of ethical stances in which the further down a business operates, the more ethical they are said to be

Answer 4

1. Shareholders are only responsibility
2. Good relationships with all stakeholders
3. Interests and obligations included in aims and mission statement
4. An ideological approach over financial considerations

Question 5

What is an ethical decision based on?

Answer 5

• Individuals
• Culture
• Society’s views
• Competitors - ethical actions of one business may force its rivals to change its practices

Question 6

Where will a business display its policy?

Answer 6

In its ethical code

Question 7

Opportunities of ethical positions:

Answer 7

• Competitive advantage can be created
• Better qualified and more highly motivated staff, with higher retention as workers are happier to work for an ethical firm.

Question 8

Threats of ethical positions:

Answer 8

• May reduce profit - more expensive to operate
• Ethics are subjective
• Delegation - empowering a worker will give them the ability to make decisions which may differ from the company’s ethical position