Ch 28 Env and ethical issues

Question 1

Arguments that support businesses not caring ab the env

Answer 1

Its expensive
Would have to increase product’s price - making it uncompetitive, losing sales, etc
If pollution is a problem govts shld clean it up
“not enough proof” that business activvity causes permanent damage to the env

Question 2

Arguments aggainst businesses not caring ab the env

Answer 2

Global warming affects everyone

Using scarce resources leaves less for the future generations

Pressure grps can take action to harm businesses brand image

Question 3

What can businesses do to achieve sustainable development

Answer 3

1 Use renewable energy
2 Recycle waste
3 Use fewer resources - lean production (ch 18)
4 Develop new ‘environmentally friendly’ products and production methods

Question 4

How can society make businesses care ab the env

Answer 4

» consumers
» pressure groups
» government, through legal controls

Question 5

How can consumers make businesses care ab env

Answer 5

Consumers can stop buying products of a business that doesnt care ab the env

When the businesses starts losing sales then theyd take action (changing product or production methods) in order to stop the bleeding

Question 6

What can pressure groups try to do

Answer 6

organize consumer boycott

Question 7

When are pressure groups likely to succeed

Answer 7

» it has popular public support and receives much media coverage

» consumer boycotts result in much reduced sales for the business

» the group is well organised and financed.

Question 8

When are pressure groups unlikely to succeed

Answer 8

» what the firm is doing is unpopular but not illegal, such as testing drugs on animals

» the cost to the business of changing its methods is more than the possible cost of poor image and lost sales

» the business sells to other businesses rather than to consumers – public pressure will be less effective.

Question 9

How does legal control impact the env

Answer 9

Govts can make certain things illegal eg:

» locating in environmentally sensitive areas such as national parks

» dumping waste products into rivers or the sea – though it is sometimes difficult to prove which business is responsible for this

» making products that cannot easily be recycled.

> impose financial penalties such as pollution permits. If they cross the permit then theyd have to pay a fine. Businesses want to make as much profit as they can so this discourages them from doing so.

Question 10

potential benefits of ethical decisions

Answer 10

Good for brand image - helps increase sales

Long term profit could increase

Some workers and businesses waanted to be linked with “ethical businesses” - Would be easy for them to hire and raise funds

Less risk of legal action against the company

Question 11

Potential drawbacks of ethical decisions

Answer 11

Could face higher costs - eg hiring an adult vs a child worker

The company’s prices could be set higher than competitors as a result of the ethical decision

Consumers may only be interest in low prices and not care about how products are made - sales would fall

Short term profits may fall

Question 12

A few ethical dilemmas a business may facr

Answer 12

» take or offer bribes to government officials or people working for other businesses, for example, to gain secret information

» employ child workers, even though it might not be illegal in some countries

» buy in supplies that have led to damage to the environment, for example, wood obtained from cutting down rainforests

» agree to ‘fix high prices’ with competitors

» pay directors large bonuses and owners of businesses large profit payouts at the same time as reducing the workforce