Unit 3.5 The Wider World Affecting Business Flashcards
What do ethical principles and standards do
- define acceptable conduct in business
- should underpin decision making
- an ethical decision is one that is both legal and meets the shared ethical standards of the community (stakeholders)
What is the difference between ethics and law
Ethics is about what is right and wrong but law is about what is lawful and unlawful
What are the common areas ethics are tested
Production - working environment and if the product is produced ethically
Employees - paid the right amount, conditions of working
Suppliers - from unethical suppliers or ethical ones
Customers - what they should sell to certain customers
The product - illegal to place tobacco billboard near schools. Who the product is suited for.
Advantages of ethical behaviour
Higher revenues and demand from positive customer support
Improvised brand and business awareness and recognition
Better employee motivation and recruitment
What are the disadvantages of ethical behaviour
Higher costs e.g sourcing from fair trade instead of the lowest price
Higher overhead e.g training and communication of ethical policy
A danger of building up false expectations
What is overhead
Indirect costs
What is a pressure group
A group that tries to influence public policy in the interest of a particular cause
What are some short term environmental issues
Traffic congestion leading to increased travel times so vehicles operate less efficiently using up fossil fuels.
Air, noise, smell and water pollution e,g electrical generators air pollution, deliveries noise pollution.
Ways to solve traffic congestion
- build more cycle lanes
- city entry charge
- increasing road tax
- invest more money in public transport
- new pedestrian zones
Ways to solve air and noise pollution
- encourage production of energy efficient cars
- give grants for using renewable energy resources
- increase passenger duty on flights
- remove licenses of clubs creating noise
- tax emissions from factories
- increase road tax
Ways to solve waste pollution
- charge for using shopping bag
- provide free compost bins
- taxes on excess packaging
- recycling subsidy
- tax on weight of rubbish put out
What is subsidy
A sum of money granted by the state or public body
What are long term environmental problems
Climate change
Resource depletion
Explain climate change
Caused by emission of too many greenhouse gases and by increased industrial activity across the world.
Fast growing countries = double/ triple number of power stations.
This leads to rising sea levels and change to where crops can be grown.
Explain resource depletion
Use of resources in production which reduces the amount of resources available e.g coal, oil and gas are non renewable
What are the four main environmental regulations (laws)
- store and treat waste securely and safely
- protect employees and environment from air pollution
- dont produce excessive noise, smoke, fumes and other forms of pollution
- comply with rules for storage and use of hazardous substances and waste
What are the benefits to a business for using environmentally friendly actions
- lower raw material costs and waste disposal charges
- trading opportunities with organisations that will on,y use environmentally friendly suppliers
- Improved customer good will
What is international trade
The flow of goods and services between countries
What are exports
What a country sells abroad
What are imports
What a company purchased from abroad
What are a few international trade examples
- a flight to an overseas Holiday destination
- business importing new technology
- buying a chocolate bar made from fair trade sourced cocoa
What does protectionism represent
Any attempt by a government to impose restrictions on trade in goods and services. The aim is to protect domestic businesses and industries from overseas competition.
Examples of protectionism
Quotas Tariffs Intellectual property laws Export subsidies Domestic subsides Import licensing
What is a quota
A limit on the quantities that can be imported
What is a tariff
Taxes on imports
What is an example of intellectual property laws
Patents and copyright
What is export subsidies
A payment to do courage domestic production by lowering their costs
What is domestic subsidies
Government financial help for domestic businesses
What is import licensing
Government grants importers the license to import goods
What are the issues with income equality
- pay rates in the uk and other developed economies are often much higher than elsewhere
- EU legislation provide more protection for employees (e.g holidays, minimum hours)
- workers in low labour cost economies receive low wages and poor conditions
What is The AIM of some legal/economic decisions that are made at EU level
To create a single market
What are the ‘four freedoms’
Goods, capital, services and people
What are the two types of taxes
Direct (taxes on income)
Indirect (taxes on spending)
How does tax affect businesses
The more they sell the more tax they have
How do taxes affect customers
They have to spend taxes on the things they buy
What are the regulations businesses must follow
- submit financial account
- have insurance
- products sold must comply with legislation
- buildings and expanding must comply with planning regulations
- minimum wage
- health and safety legislation
- discriminative legislation
What is the minimum wage
The lowest payment per hour, day or week that can be legally given to a worker for their work
What does health and safety regulations cover
Breaks, chemical storage, heating and ventilation
Basics of Maternity and paternity pay
EU regulations cover minimum but each country can provide more
What are ethics
Moral guidelines which govern good behaviour
What are the positive impacts of regulations
Employees get treated well so will be willing to work there.
Businesses can have insurance and look at financial accounts so they can compare.
Customers won’t be exploited.
What are the negative impacts of regulation
Costs increase as it costs for insurance and to make sure laws are followed so staff are let off and the shines has less cash so less spent to improve business so less customer.
Cost passed on to customers.
What are the positive impacts of minimum wage
Employees are guaranteed a certain amount so they have a better standard of living.
Business will be seen as fair compared to ones without MW.
More customers willing to buy from a fair business.
What are the negative impacts of minimum wage
Business hires less people so more unemployment for people.
Business spend more on employees which leads to less spent on product so unhappy customer.
People who used to earn more earn less.
What are the positives of maternity pay
Employees don’t have to work while heavily pregnant as it could be dangerous so they can look after the children.
but they can come back and still be able to work so the business can retain their trained staff instead of finding new ones.
What are the negatives of maternity and paternity pay
Less workers means lower productivity.
Paying staff that aren’t there so higher costs but less work.
Training new staff is expensive.
What are the positives of health and safety regulations
Guaranteed employee safety so they aren’t going to be hurt.
Consumers aren’t given faulty unsafe products so they are guaranteed quality and will return.
The business isn’t sued for being unsafe so they keep a good reputation.
What are the negatives of health and safety regulations
Business spends more making sure everyone is safe so less profit.
Have to train staff to follow the regulation which is expensive and time consuming.
