ETHICAL (ETHICS, LEGAL AND ENVIRONMENTAL FACTORS)

What are business ethics?

Business ethics are the moral principles and values that guide how a business behaves towards stakeholders and society.

Why are business ethics important?

They affect a business’s reputation, customer loyalty, employee motivation, and long-term profitability.

What is the difference between ethics and the law?

Ethical behaviour goes beyond legal requirements; actions can be legal but still considered unethical.

What ethical issues related to the environment do businesses face?

Issues include pollution, carbon emissions, waste disposal, use of non-renewable resources, and climate change impact.

How can businesses behave ethically towards the environment?

By reducing emissions, using renewable energy, recycling waste, and adopting sustainable production methods.

What are animal rights ethical issues in business?

Concerns about animal testing, factory farming, use of animal products, and animal welfare standards.

How can businesses address animal rights issues ethically?

By avoiding animal testing, sourcing cruelty-free materials, and using certified ethical suppliers.

What ethical issues exist in the treatment of workers?

Issues include low pay, unsafe working conditions, discrimination, excessive working hours, and lack of workers’ rights.

How can businesses treat workers ethically?

By paying fair wages, ensuring safe conditions, promoting equality, and respecting workers’ rights.

What ethical issues arise in relationships with suppliers?

Issues include unfair pricing, late payments, exploitation, and use of suppliers with poor labour standards.

How can businesses behave ethically towards suppliers?

By paying fair prices, paying on time, using ethical sourcing, and building long-term relationships.

What ethical issues affect customers?

Issues include misleading advertising, unsafe products, poor data protection, and unfair pricing.

How can businesses behave ethically towards customers?

By offering safe, good-quality products, honest marketing, fair pricing, and protecting customer data.

What is corporate social responsibility (CSR)?

CSR is when a business takes responsibility for its social, ethical, and environmental impacts, beyond profit maximisation.

What are examples of CSR activities?

• Charity donations\n- Reducing environmental impact\n- Ethical sourcing\n- Supporting local communities

Why do businesses adopt CSR?

To improve reputation, attract customers and employees, reduce risk, and achieve long-term sustainability.

What is meant by conflict between ethics and profitability?

Ethical actions often increase costs, which may reduce short-term profits.

Why might ethical behaviour reduce profitability?

• Higher wages\n- Sustainable materials cost more\n- Ethical suppliers may charge higher prices

How can ethical behaviour increase profitability?

It can improve brand image, customer loyalty, employee motivation, and long-term sales.

Why is the impact of ethics on profit often long term?

Benefits such as reputation and trust take time to develop, while costs are often immediate.

How does business size affect the impact of ethical objectives on profitability?

Large firms can absorb costs more easily, while small firms may struggle financially.

How does industry type affect ethical profitability?

Industries with high public scrutiny (e.g. food, fashion) gain more from ethical behaviour.

Why may ethical objectives be a competitive advantage?

Consumers increasingly prefer ethical brands, increasing market share and profits.

Why might ethical objectives be a disadvantage?

If competitors do not act ethically, they may have lower costs and lower prices.

How do customers view ethical businesses?

Customers often value ethical behaviour and may pay higher prices for ethical products.

How do employees view ethical businesses?

Employees benefit from fair treatment, leading to higher motivation and lower labour turnover.

How do shareholders view ethical objectives?

Some support ethics for long-term profit, while others prioritise short-term returns.

How do local communities view ethical businesses?

Communities benefit from reduced pollution, job creation, and community support.

How do suppliers view ethical businesses?

Ethical businesses offer fair contracts and long-term stability, benefiting suppliers.

Why may stakeholder views on ethics conflict?

Different stakeholders have different priorities, such as profit versus social responsibility.

How should businesses balance stakeholder ethical expectations?

By considering trade-offs and aiming for sustainable long-term value creation.

What is a strong evaluative conclusion on business ethics?

Ethical behaviour may reduce short-term profits but often leads to long-term sustainability and stakeholder trust.