Chapter 2 - Home-grown Business

Question 1

Home Grown Benefits

Answer 1

• a business can use a strong domestic foundation to expand overseas
• marketing strategies can be tested, products developed and distribution channels established

Question 2

Global Business Ethics

Answer 2

1. offshore labour
2. environmental responsibility
3. Outsourcing
4. Dumping
5. Fair Trade

Question 3

Offshore Labour

Answer 3

• a sweatshop is a workplace where people work long hours for little pay in unhealthy conditions, usually making consumer items sold for high prices in developed nations
• used to reduce costs and increase profit because workers are paid little for their work
• forced to work overtime, with no breaks, punished for slow work and mistakes
• arguments against offshoring include:
  1. the decrease in employment in AUS as jobs are exported
  2. customers perhaps resenting having to deal with offshore customer service staff and overseas call centres
  3. it being more difficult for Australian businesses to manage offshore labour

Question 4

Environmental Responsibility

Answer 4

• sustainability aims to meet the needs of corporate stakeholders today while seeking to protect and preserve resources and the environment for the future
• reducing use and waste, and recycling or resources such as water, energy and paper
• can benefit from being sustainable in the following way s
  1. reduced costs
  2. staff loyalty
  3. public relations and public image
  4. carbon trading

Question 5

Reduced Costs

Answer 5

being more efficient with resources, recycling supplies and reducing waste results in a reduction in costs

Question 6

Staff Loyalty

Answer 6

‘green’ building that uses more natural methods of lighting, heating and cooling is a healthier environment

Question 7

Public Relations and Public Image

Answer 7

Sustainable practices can differentiate a business in the market and be used to promote the business in a positive light

Question 8

Carbon Trading

Answer 8

An ethical dilemma for business owners and managers exists because of different environmental regulations in different countries

Question 9

Outsourcing

Answer 9

• involves an organisation identifying activities that can be given to another organisation to perform on their behalf
• other reasons to outsource functions are:
  1. lowering costs
  2. management being able to focus on core business activities
  3. avoiding costly investments in technology
  4. improving customer focus
• costs are easier to manage

Question 10

Dumping

Answer 10

• selling products that are considered unsafe and unhealthy in countries that do not have the same product safety laws as the home country

Question 11

Fair Trade

Answer 11

• businesses in the developed world are able to lower costs and increase profits by using cheap labour and sourcing materials and products at low prices
• this benefit them but does not provide the means for the poorer country to improve their standard of living

Question 12

Other Ethical Dilemmas

Answer 12

• managing across borders (doing what is best for the company and its profits and doing what is best for the community, both local and global)
• bribes (corrupt politicians and government officials may request amounts of money in order for an AUS business to operate in their country)