ethical and environmental considerations Flashcards
define ethics
Ethics relate to principles, standards of behaviour and ‘doing the right thing’. An ethical business will act in a socially responsible way, doing what is right, even if it is not required to do so by legislation or in order to maximise profit.
examples of treating workers ethically
paying a fair wage
providing good working conditions
allowing flexible working
examples of treating suppliers ethically
paying fair prices
having reasonable expectations
paying bills on time
examples of treating customers ethically
Exceeding customers’ expectations
- this can include offering excellent customer service, quality products or services, and making the customer feel valued and appreciated.
Only providing what customers want
– ensuring that the business meets the needs of the customer rather than selling extra products or services just to meet profit targets. For example, not selling a customer a mobile phone contract that they will not use.
Giving clear and accurate product and service information to allow customers to make informed decisions.
sourcing of materials
Ethically sourced supplies are often more expensive, so buying them is usually a deliberate business decision because it could make a business less competitive, leading to lower sales and reduced profit margins. In addition, businesses will usually need to put in place checks to ensure that their suppliers are themselves acting ethically. This will also incur additional costs.
Marketing decisions affecting business
Businesses that behave ethically can benefit from good publicity, which is likely to attract customers and increase sales. For example, businesses that have signed up to the Ethical Trading Initiative can show that they have taken steps to address the use of child labour in the production of the goods they sell.
Those businesses that do not behave in an ethical way are more likely to receive bad publicity and get a poor reputation. For example, retailers that buy from suppliers that use child labour to produce goods may be targeted by negative articles in the media, undoing much of their own marketing activity.
define sustainability
Working in a sustainable way means that business activity does not use up or destroy natural resources. To achieve this, a business may use renewable energy, recycle materials such as paper and ink cartridges, or use devices that save energy and water.
define waste disposal
Traditionally, waste has either been incinerated or sent to landfill sites. However, these are not environmentally friendly ways of dealing with waste. Instead, businesses can reduce the amount of waste that they produce, which reduces costs and means that there is less waste to dispose of. Many businesses also look for ways in which waste materials can be reused.
define pollution
Pollution commonly refers to the contamination of air or water with harmful chemicals. Air pollution can cause a number of health-related issues, and animals and plants that live in seas and rivers are affected by water pollution. Business activity may also cause disturbance through noise pollution.
define climate change
Climate change refers to long-term changes to weather patterns. Scientists believe that business activity contributes to global warming through the burning of fossil fuels and the cutting down of trees.
How reductions in consumer income affect businesses
If consumers’ incomes fall, people will have less money to spend. They will buy fewer goods and services, as they will make do with what they already have. When they do spend money, they may buy cheaper alternatives, such as supermarket own-brand products or second-hand items. Businesses will expect to sell less when this happens, so they will plan to reduce the amount they produce, possibly making staff redundant.
Not all businesses will see demand for their products change in this way. The effect of a change in consumer income will depend on what a business sells. For example, pound shops that sell products at discounted prices often see sales increase when consumer incomes fall.
How people become unemployed
made redundant – people whose last job ended because there was no more work available or no further need for their role
dismissed – people whose last job ended because they broke their contract of employment, eg by engaging in misconduct
a school, college or university leaver – people who have completed full-time education and are seeking work for the first time
define globalisation
In business, globalisation refers to companies operating internationally or on a global scale. This involves most of the world’s economies working together to enable businesses to produce and trade goods and services. The three main elements of globalisation are imports, exports and business location
ecommerce and the marketing mix
product - styles, fashion trends, sizing, cultural beliefs (eg colours that are considered lucky in one country may be associated with danger in another), dietary requirements, eg some places may require halal or kosher foods and infrastructure, eg right- or left-hand-drive cars and different types of electrical plug.
price - may be affected by tariffs and trading blocs, income levels and disposable income, tax, exchange rates and level of demand
place - access to the internet in certain countries, purchasing preferences in some countries (e-commerce may not yet be popular) and distribution links in certain countries
promotion - cultural and social differences, language and translations
Advantages of e-commerce for a growing business
open 24/7
cheap to operate compared to physical stores
gives access to a huge range of potential customers
easy to sell to overseas customers
provides access to cost-effective promotional methods, such as social media and email advertisements
