Component 3 - Ethical, legal and environmental factors Flashcards
Explain : The meaning of business ethics
The moral principles and values that guide the behaviour of organisations .
Explain : Understand the types of ethical issues a business will face including
- Environmental
- Animal rights
- Treatment of workers
- Suppliers and customers
Environmental issues - The impact of a business’s activities on environment, such as pollution and Climate Change.
Animal Rights - The ethical treatment of animals used in production processes, such as animal testing and factory farming.
Treatment of workers - The fair treatment of employees, such as workplace safety, fair wages, and anti-discrimination.
Suppliers and Customers - The ethical treatment of suppliers and customers, such as fair trade, transparency, and anti-bribery
Explain : The meaning of corporate social responsibility (CSR)
Corporate Social Responsibility (CSR) - The concept that businesses should contribute to society beyond making a profit, businesses should also consider their impact on the environment, their stakeholders, and society at large.
Explain : Understand the possible conflict between ethics and profitability + Give an Example
Ethics and profitability - Conflict occurs when when a business is faced with a decision that will benefit its financially, but at the expense of ethical behaviour. A business may mislead customers about the quality of its product in to boost sales, but this would be unethical.
Explain - The main laws that concern businesses, including
- Company law
- Employment and anti-discrimination law
- Consumer protection
- Competition policy
- Health and safety legislation
- Data protection
- Intellectual property and minimum wage
(learners are not expected to have detailed knowledge of specific Acts of Parliament)”
Company law - Laws related to the formation, governance, and dissolution of companies, including the legal structure of companies, their directors, shareholders, and company accounts.
Employment and anti-discrimination law: -These laws govern the relationship between employers and their employees, covering issues such as discrimination, health and safety, working hours, and minimum wage.
Consumer Protection - Protects consumers from unfair trading practices like, false advertising, and faulty or dangerous products.
Competition policy - To promote competition in the marketplace, preventing anti-competitive practices like abusing their market power.
Health and safety legislation - To protect workers from harm and injury while at work .
Data protection - Protect the privacy of personal data held by businesses.
Intellectual property - Protect businesses’ ownership of their intellectual property, including patents, trademarks, and copyrights.
Explain : The potential environmental costs of business activity including
- Air
- Water and Noise pollution
- Climate Change
Air and water pollution - Business activity can release pollutants into the air and water, such as chemicals and greenhouse gases, which can contribute to poor air and water quality and climate change.
Noise pollution - Business activity that generates excessive noise can harm wildlife and negatively impact the health and well-being of people living nearby.
Climate change - Business activity can contribute to climate change by releasing greenhouse gases, such as carbon dioxide and methane.
Explain : How potential environmental costs can be controlled by
- Government intervention
- The influence of pressure groups
- Education
Government intervention - The government can control environmental costs by passing laws and regulations that mandate businesses to limit their environmental impact. For instance, they can set emissions standards.
Influence of pressure groups - Pressure groups are organizations that advocate for specific issues such as environmental protection, this pressures businesses to act ethically.
Education - Educating businesses and consumers about environmental issues and how to mitigate their impact can help to control potential environmental costs.
Explain : How businesses can respond to environmental issues
Adopting Sustainable Practices - Businesses can adopt sustainable practices that minimize their environmental impact, such as adopting a recycling program.
Creating a (CSR) program - Businesses can create a CSR program that includes environmental initiatives, such as donating a percentage of profits to environmental causes.
Evaluate : The impact on the profitability of a business of having ethical objectives
Evaluate : The ethical stance of businesses from the point of
view of different stakeholders”
Evaluate : The impact of legislation on businesses and their stakeholders
Evaluate : The impact of business activity on the environment
