Chapter 4: The relationship between businesses and the social environment

Question 1

What are demographic factors?

Answer 1

Demographic factors include the characteristics of human populations and population groups, including elements such as age, ethnicity, gender, religion and sexual orientation.

Question 2

What are the opportunities provided when a firm assumes environmental responsibility?

Answer 2

Marketing Opportunities
Financial Opportunities
Human Resource Opportunities

Question 3

How would a businesses gain a marketing opportunity through environmental responsibility?

Answer 3

A good reputation in relation to environmental issues can act as a positive marketing tool that encourages consumers to choose one brand over another.

Question 4

How would a businesses gain a Financial opportunity through environmental responsibility?

Answer 4

Firms may find it easier to gain finance if they are able to point to a solid record of helping rather than damaging the environment

Question 5

How would a businesses gain a HR opportunity through environmental responsibility?

Answer 5

A reputation for protecting the environment can have positive effects on potential employee’s perception of a firm.

Question 6

What is business ethics?

Answer 6

Business ethics are the moral principles that should underpin decision making. Ethical behaviour involves actions and decisions that are seen to be morally correct.

Question 7

What is an ethical code?

Answer 7

An ethical code is an instruction from an organisation to its employees to indicate how they should react to situations relating to moral values.

Question 8

What is an ethical investment?

Answer 8

Ethical investment refers to stock market investment only in firms that are seen as ethically sound.

Question 9

Name the advantages of ethical behaviour

Answer 9

Ethical behaviour can give companies a clear competitive adavntage
Firms that adopt ethical practices may expect to recruit staff who are better qualified and motivated
Obtaining funds for investment purposes may be easier for a firm that behaves ethically

Question 10

Name the disadvantages of ethical behaviour

Answer 10

• An ethical choice can incur extra cost
• People have different views about what is ethical
• In large organisations, it may be difficult to ensure that all staff follow the ethical code

Question 11

What is a corporate social responsibility?

Answer 11

Corporate social responsibility involves the duties of an organisation towards employees, customers, society and the environment.