ethics in business
Learning Objectives:
|
Specification:
|
5.1_ethics_in_business_starter_actvity.docx | |
File Size: | 38 kb |
File Type: | docx |
ethics_mind_map.pptx | |
File Size: | 39 kb |
File Type: | pptx |
primark_10_mark_ethics_question.docx | |
File Size: | 11 kb |
File Type: | docx |
5.1_ethics_in_business_actvity.docx | |
File Size: | 17 kb |
File Type: | docx |
Businesses, like people, have to make ethical choices. They have to decide whether an activity or decision is morally right or wrong. Ethics is becoming more important to businesses today. Many large businesses want to show that they are ethically responsible on a range of issues.
Key term: BUSINESS ETHICS - The ideas about what is morally correct or not applied in a business situation.
A business must consider the following:
A business must consider the following:
- Production
- Suppliers
- Workers
- Customers
- Competitors
- Environment
- The product
- Local communities
Production
Businesses need to weigh up the choice of disposing waste in the cheapest possible way, or doing it in the most environmentally friendly way. Businesses may also look to reduce waste and recycle materials that they don't use. How does Dell benefit from this initiative? |
|
|
Suppliers
Businesses must consider how they treat their suppliers and what they buy from suppliers. Financially, they should pay the lowest prices possible, however they might not be 'fair'. The fair trade scheme pays suppliers in developing countries a fair wage for their products. Also, some businesses only use free range ingredients. How do The Body Shop benefit from this initiative? |
Workers
Businesses can treat their workers in different ways; They can pay them as little as possible and give them their minimum legal rights, or they can recognise that they are a very important resource within the business.They may decide to pay them a higher wage and help develop them through training programmes. What are the +/- to Apple of paying staff less and working them harder? |
|
|
Customers
Customers are vital as businesses won't survive without them. Some businesses listen to what their customers want try to achieve this. For example M&S developed a 5 year plan on ethical business practices after their customers said they wanted this from a retailer. Some businesses also will not sell to certain businesses on ethical grounds. What impact does this have on the energy companies' reputations? |
Competitors
Businesses have to compete to survive and some choose to do this with high standards, but others may resort to illegal tactics such as bribery and corruption. Why did Aldi use this advert? |
|
|
The Product
A business has to decide what products to make. Some businesses will choose not to sell GM products, and may sell clothes that can be washed at lower temperatures. Businesses must also make decisions on what they sell, e.g. replica guns and adult magazines in newsagents. Also they must consider cleaning up the mess their products can cause. Why do businesses use planned obsolescence? |
The Environment
Businesses must consider their impact on the environment. Power stations can have a huge effect on global warming. Some businesses will look to buy local produce which reduces energy use, or let their employees work from home. What are the +/- to Kleenex of this initiative? |
|
|
Local Communities
Some businesses will do a lot to help their local communities or charities in their areas, or even in other parts of the world. Many people feel it is the responsibility of large firms to help contribute towards the areas they are located in. Why do McDonald's participate in this scheme? |
Possible trade-offs
Many businesses would argue that there is a trade-off between ethics and profit. Acting ethically raises costs, they would argue. Fair Trade products are more expensive than normal products to buy and improving workers' conditions costs money. Supporting local charities also adds to costs.
However, some businesses can raise their sales by using their ethical policies as a marketing tool. Companies like M&S, Co-op and The Body Shop openly advertise their ethical practices. It can increase a businesses's reputation. This brings in more customers and can increase revenue. Acting ethically can also increase the motivation of workers. They may be willing to work harder if they feel they are part of an ethical business. This can mean a decrease in costs if they become more productive, which can increase profit as well. However, if every business was to become 'ethical', these advantages would disappear.
However, some businesses can raise their sales by using their ethical policies as a marketing tool. Companies like M&S, Co-op and The Body Shop openly advertise their ethical practices. It can increase a businesses's reputation. This brings in more customers and can increase revenue. Acting ethically can also increase the motivation of workers. They may be willing to work harder if they feel they are part of an ethical business. This can mean a decrease in costs if they become more productive, which can increase profit as well. However, if every business was to become 'ethical', these advantages would disappear.
Pressure groups
Key term: PRESSURE GROUPS - organisations that support causes such as workers' rights, the environment, animal welfare and world poverty. Examples are trade unions, Greenpeace, RSPCA and Oxfam.
Pressure groups try to get businesses to change what they are doing. Trade unions want higher wages for workers, Greenpeace want more environmentally friendly policies and Oxfam campaign for better working conditions for workers in developing countries who may be making products for sale in the UK.
Most businesses are not directly affected by pressure groups e.g. they don't employ workers that belong to trade unions. Very few businesses are subject to campaigns against them by environmental pressure groups or pressure groups working to reduce poverty. However, when businesses are affected, they need to make a decision about how to respond.
Most businesses are not directly affected by pressure groups e.g. they don't employ workers that belong to trade unions. Very few businesses are subject to campaigns against them by environmental pressure groups or pressure groups working to reduce poverty. However, when businesses are affected, they need to make a decision about how to respond.
- do nothing and hope the issue will cease to be important and the pressure group will go away
- work against the pressure group e.g. Walmart has a policy of not working with pressure groups in its US stores. Oil companies in the past have opposed the activities of environmental pressure groups like Greenpeace - sometimes they are successful but sometimes they get such negative publicity that they are forced to give in to some of their demands
- work with pressure groups - M&S for example, work with the WWF, Oxfam and Fairtrade