Social Responsibility and Business Ethics

Question 1

Business Ethics

Answer 1

A set of moral principles that guide business people regarding how they should act in business situations.

Question 2

5 Reasons why a business behaves unethically

Answer 2

1. FEAR- if there is a culture of fear in the business employees may not report unethical behaviour.
2. PRESSURE FROM MANAGEMENT- staff might feel that they have to act unethically to achieve unrealistic targets set by management.
3. BUSINESS CULTURE- if employees see senior management behaving in an unethical manner they may follow their example.
4. GREED- business may place emphasis on making a profit above everything else.
5. LACK OF LEGISLATION- makes it easier for businesses to behave unethically as there are no consequences for their actions.

Question 3

4 types of unethical practices

Answer 3

1. Bribery and Corruption
2. Exploitation of Workers
3. Dumping
4. Unsafe or substandard products

Question 4

3 ways managers can improve business ethics

Answer 4

1. LEAD BY EXAMPLE- managers need to behave ethically themselves if they want others to do so. They should disapprove unethical behaviour if they see it.
2. ENCOURAGE OTHERS TO REPORT- for them to know of any unethical behaviour they need to be aware of it. They should encourage employees to report any unethical instances. This is known as whistle blowing.
3. CODE OF ETHICS- this is a formal written document that sets out rules for employees and managers to follow when making decisions. It tells them the correct way to behave and how to the right thing in different situations.

Question 5

3 Benefits of a Code of Ethics

Answer 5

1. IMPROVES REPUTATION- if a business promotes its code of ethics on a website and show how they follow it then it will create positive PR for the brand which will attract employees and consumers.
2. IMPROVES DECISION-MAKING- agreeing upon and following a code of ethics is a good foundation for all business decisions. It helps the business to consider all its stakeholders.
3. ENCOURAGES WHISTLEBLOWING- code of ethics contains information on how employees can report unethical behaviour to management.

Question 6

2 Challenges of a Code of Ethics

Answer 6

1. ENFORCEMENT- sanctioning employees might cause industrial unrest and conflict that management will have to deal with. Staff may feel that management are questioning their values.
2. TRAINING REQUIRED- staff will need to be trained on the new code. It will be built into induction training and staff will need regular training.

Question 7

Environmentally Sustainable Business

Answer 7

Sustainable development is economic development that can continue indefinitely without causing permanent harm to the environment or reducing the quality of life for future generations.

Question 8

4 main environmental issues faced by businesses

Answer 8

1. Climate Change
2. Energy
3. Waste
4. Pollution

Question 9

3 Environmental Effects on a Business

Answer 9

1. INCREASED SALES- there is a growing demand for green products so if a business can provide these products than they will increase their sales. Also an increase in carbon tax will influence the business in going green.
2. DAMAGE TO REPUTATION- a business that damages the environment may suffer from bad publicity. This will lead to boycotts and a decrease in sales.
3. INCREASED COSTS- the more waste a business generates the more it will cost them because of carbon tax. This will increase their costs and reduce their profits.

Question 10

What is CSR and explain

Answer 10

Corporate Social Responsibility- the businesses duty to respect all its stakeholders in a moral and fair way. Stakeholders include: employees, investors, suppliers, customers, government, local communities, society and planet.

Question 11

3 Advantages of being Socially Responsible

Answer 11

1. INCREASED SALES- customers like businesses that behave in a socially responsible way so are more likely to purchase their goods.
2. REDUCED COSTS- in the long run the business will safe money if they behave ethically from the start.
3. EASIER TO ATTRACT AND KEEP EMPLOYEES- they will prefer to work for a company that pays a decent wage and offers good conditions.

Question 12

3 Characteristics of an Environmentally Conscious Business

Answer 12

1. SENSITIVE TO THE ENVIRONMENT- they will try to minimise waste and pollution by reducing, reusing and recycling
2. OPEN TO NEW IDEAS- they will educate themselves on environmental issues and seek advice when needed.
3. HONEST ABOUT ENVIRONMENTAL ISSUES- a business should not hide its mistakes. e.g. Coca-Cola are the worlds largest polluter and have addressed that by putting measures in place.

Question 13

3 Effects on Costs of being Ethically, Socially and Environmentally Responsible.

Answer 13

1. POSSIBLE INCREASED WAGES FOR EMPLOYEES- they may have to offer increased wages if they want to be socially responsible.
2. INCREASED MANUFACTURING COSTS- a business will buy recycled materials to reduce their impact on the environment. This will cost more.
3. LOWER ENERGY COSTS- it will cost the business less in the long run to use reusable energy sources like wind and solar power.

Question 14

2 Effects on Revenue of being Ethically, Socially and Environmentally Responsible.

Answer 14

1. INCREASED SALES- customers like businesses that behave ethically and therefor are more likely to buy from them.
2. ATTRACTS CAPITAL- investors know there is an increasing demand for green products so they are more likely to put their money in those businesses.