ethics in operations

Question 1

what is ethical operations?

Answer 1

• Working ethically means doing the right thing and acting in a way that is both fair and honest to all stakeholders.

• Behaving ethically is about what is morally right and wrong

• Law is about what is lawful and unlawful

Question 2

name 4 unethical practises

Answer 2

• the use of child labour

• the use of sweatshops for production, for example hot conditions, long working hours

• the violation of workers rights

• the violation of health and safety standards.

Question 3

name 2 advantages of ethical operations

Answer 3

• Customer Loyaty - Increased sales revenue as demand from ethically motivated consumers grows - More and more consumers take an interest in how businesses act towards their stakeholders, and are willing to withdraw their custom if they don’t like what they are doing.

• Improved employee motivation - Staff morale will be higher if they are treated well, and so they are likely to be more motivated. This should lead to higher productivity/better customer service/ higher quality.

Question 4

name 3 disadvantages of ethical operations

Answer 4

• Costlier products - Due to the costs of paying more to suppliers, or awarding staff with above minimum wages, the end product can become more expensive.

• Less competitive - Applying ethical principles can result in a higher cost base for the business. This could result in having to charge customers more for their products than their competitors, and therefore their market share could fall.

• Additionally, ethical standards vary between countries, which can be problematic for multinational corporations