Business Ethics and Social Responsibility

Question 1

What is an ethical business practice?

Answer 1

An ethical business practice refers to a set of moral principles that cause a person or firm to act in a certain way.
It encourages honesty and fairness, doing the right thing should always prevail over profit.

Question 2

What is an ethic?

Answer 2

An ethic involves a valued judgement on what is right and what is wrong.
Business ethics examines the firm’s activities and asks whether the activity is right or wrong and guides business people.
It involves reaching morally appropriate decisions with a focus on fairness as the guiding factor.

Question 3

What are some ethical issues for businesses?

Answer 3

Profits versus social responsibility.
Types of goods and raw materials used, e.g Lush uses animal-testing free products.
Welfare of its employees, e.g Reebok improved terms and conditions for employees.

Question 4

What does the code of ethics mean?

Answer 4

A written set of guidelines issued by an organisation to its workers and management to help them conduct their actions in accordance with its primary values and ethical standards.
It is a collection of accepted ways of behaviour- a list of policies and principles that influence the actions and behaviours of individuals.

Question 5

Outline how ethical behaviour in a business can be encouraged.

Answer 5

Establishing a code of ethics:
Setting out the modes of behaviour expected from a business in its dealings with employees, customers and the community,

Encourage “whistle-blowing”:
Encouraging staff to report unethical behaviour by creating a climate where whistleblowing is rewarded.

Modelling ethical behaviour:
When senior staff is highly ethical and model ethical behaviour, it will encourage subordinates to behave in a similar manner.

Staff training:
A code of ethics should be presented to staff at induction training and reminder training should include modules on ethical behaviour.

Discipline procedures:
Should be in place for staff found guilty of behaving unethically.

Question 6

What are the benefits of introducing a code of ethics?

Answer 6

s

Question 7

What are the drawbacks of introducing a code of ethics?

Answer 7

s

Question 8

What are social responsibilities?

Answer 8

The theory that recognises that business has obligations to society and profit maximisation must incorporate the fair treatment of stakeholders.

Question 9

What are the social responsibilities of a business to investors?

Answer 9

Provide a fair return on the investment by shareholders.
Avoid excessive payments to senior management.
Present a true and fair view of the financial performance and standing of the business and maintain a proper set of accounts.

Question 10

What are the social responsibilities of a business to employees?

Answer 10

Adhere to all employment law, health and safety regulations.
Pay a fair wage to all employees.
Provide a safe working environment.
Treat employees with dignity and respect, no discrimination.
Provide equal opportunities for promotion, pay, etc. to all employees.

Question 11

What are the social responsibilities of a business to customers?

Answer 11

Fair and honest advertising of its product.
Abide by health and safety regulations; products must be safe.
Goods must be of merchantable quality, match their description and be fit for purpose.
They must have a good after-sales service.
They must charge a fair price.

Question 12

What are the social responsibilities of a business to suppliers?

Answer 12

Always pay them on time.
Always give adequate notice when placing an order- lead time.
Use a fair tendering system going for the best quality based on the price charged.

Question 13

What are the social responsibilities of a business to society?

Answer 13

To be environmentally conscious.
To implement environmentally friendly business practices.
To cooperate with government offices.
To be open and transparent.
To use recyclable packaging, clean manufacturing and sustainable development.

Question 14

What are the social responsibilities of a business to the government?

Answer 14

They should abide by the laws of the state which are put in place to regulate the economy
Abide by:
Labour laws
Consumer laws
Planning laws
Taxation laws

Question 15

Name 5 different environmental issues that businesses may potentially influence.

Answer 15

Emissions from factories.
Climate change.
Noise and dust pollution.
Rainforests being cut down.
Water pollution by industry.

Question 16

What is environmentally sustainable development?

Answer 16

Meeting the needs and the wants of the present generation without wrecking the legacy, which would’ve been enjoyed by future generations.

Question 17

How can businesses tackle environmental issues?

Answer 17

Raise awareness by including an environmental polivy statement in the mission statement of the business.
Educate the enterprise’s employees in environmental awareness.
Invest in machinery that reduces discharges into the environment.
Reduce pollution by burning fewer fossil fuels.
Encourage transport sharing schemes.

Question 18

Provide examples of companies being more environmentally sustainable.

Answer 18

Ford:
Plans to reduce their greenhouse gas emissions using their EcoBoost engine to increase fuel efficiency.
It plans to introduce 40 electrified vehicles by 2022 in an investment of 11 million dollars.

Bosch:
50% of Bosch’s research and development budget is invested in creating environmental protection technology.

Lego:
Will invest 150 million dollars over the next 15 years with a focus on addressing climate change and reducing waste.

Disney:
Is committed to reducing their carbon footprint with goals for zero net greenhouse gas emissions, zero waste, and a commitment to conserve water.

Question 19

What are the characteristics of an environmentally conscious business enterprise?

Answer 19

Consultation:
Honesty:
Awareness of environmental issues:
Openness:
Sensitive:

Question 20

What are the costs for businesses that are associated with good ethical behaviour?

Answer 20

s

Question 21

What are the opportunities for businesses that are associated with good ethical behaviour?

Answer 21

s