Ethics (4.4.2) Flashcards
What is business ethics?
Refers to the principles and norms that govern business behaviour
What does the ethics of a business determine?
How they operate and their decision making process
What can unethical actions do to the brand?
Damage the brand and result in loss of profitability
What are the four groups of ethical considerations MNC’s need to consider?
- Marketing Considerations
- Supply chain considerations
- Environmental considerations
- Stakeholder conflicts
What are the Key ethical isssues examples from these 4 groups??
-Pay +Working Conditions
-Emissions (3)
-Waste Disposal (3)
-Exploitation of labour (2)
-Child labour (2)
-Misleading product labelling (1)
-Inappropriate promotional activities (1)
What do MNC’s have to think about when developing their marketing strategy?
Cultural and social differences in which they operate in
What are the examples of marketing considerations for MNC’s and what do they mean?
- Misleading labelling- Labelling must comply with the regulation of the country and it must be correct information and not include false information aimed at generating higher sales. Examples of this are false info about size, content, features, functionality
- Inappropriate Promotional activities-Should not be offensive or illegal
What does a supply chain of a business involve?
Consists of all the suppliers involved in the manufacturing of a product/service
What is Corporate Social Responsibility (CSR)?
When companies integrates social and environmental concerns into their business operations
What are the examples of supply chain considerations for MNC’s and what do they mean?
1.Child labour- Some MNC’s have manufacturing facilities in countries where child labour is common. This can damage their brand and affect sales.
2. Exploitation of labour- Can take the form of low wages and poor working conditions. Under pressures from governments, customers and institutions to take action to ensure their products and services do not involve exploited labour
What are governments encouraging businesses to do?
To improve their environmental impact of their business activity
What does LEDC stand for?
Less economically developed countries
What are the examples of environmental considerations for MNC’s and what do they mean?
1.Waste management- Many developed countries have regulations about how businesses should dispose of their waste. LEDCs usually have less regulation and so MNC’s dispose of waste in LEDCs at a cheaper cost which allows them to maintain their high profits
2. Emissions- Often released from factories or from products made by MNC’s. Emissions MNC’s produce have a negative impact on local communities, causing health issues such as asthma, cancer and skin irritations
What is a stakeholder?
An individual or group that has an interest of can be affected by a business. Different stakeholders have different levels of power and different priorities which inevitably creates the potential for conflict.
What are the examples of stakeholder conflicts?
1.Management v Workers-Management more focused on output or reducing costs rather than workers safety or creating a positive working environment whereas workers want to be safe and have comfortable environment in which to work.
2. Management V owners- Owners want management to maxamise the business profits and less interested in mental well-being of employees
3. Company Profits Vs Resource Depletion-Owners aim to maxamise output so generate increasing levels of profit while higher output require more rapid resource depletion of natural resources and generates more environmental damage
