Business Ethics, Technology, and Analysis

Ethics are the moral principles that should underpin decision-making of people and businesses.
Ethical behavior means actions considered 'right' by society.
For businesses, this might mean:
- Operating in an environmentally-friendly manner.
- Paying a 'living wage' to workers.
- Respecting the employment rights of workers in good faith.
- Buying from overseas suppliers that have fair work practices.
- Marketing responsibly (i.e., not to children).
Businesses' and people's ethics are judged on their actions.
Ethical businesses are viewed more favorably by potential customers and stakeholders.

The Warehouse uses United Nation’s Guiding Principles on Human and Business Rights to ensure it is ethical.
Warehouse makes sure its overseas and local suppliers source raw materials ethically. E.g., Fair wages.
The Advantages of ethical behavior include:
1. Higher sales revenues generated from ethically-minded consumers.
2. Improved brand power and recognition.
3. Better employee motivation and recruitment.
4. New sources of finance, e.g., ethical investors.

The Disadvantages of ethical behavior include:
1. Higher costs (e.g., Fair Trade suppliers can have higher costs from paying ‘fair’ rates to farmers).
2. Higher overheads (e.g., More training and communication to staff, customers, and suppliers).
3. Danger of not meeting consumers’ expectations (i.e., business seen as hypocritical or “not walking the walk”).
4. Limitations on how business can operate (e.g., Certain suppliers ruled out as unethical).

Starter Activity: Think of One technological change in 20th or 21st century AND write down how it changed businesses or consumer experience.
Technological changes are one of the most powerful influences on businesses.
- Examples: Refrigeration, Internet, Mass Production (Assembly Line), Air Travel.
Technology has helped create international markets and supply chains.
- E.g., An NZ business can use the internet to sub-contract accounting to an Indian accounting firm.
Technology has helped lower costs, increase access, and improve quality and speed of production.

First-to-market businesses will have a competitive advantage (e.g., Uber).
Technology can replace the need for workers, i.e., automation, reducing management costs.
Technology can boost productivity, e.g., chainsaw and logging crews.
Delivers resources or goods to markets across the world (e.g., Refrigeration delivers NZ meat to world markets).
Improved communication between workers and management (e.g., mobile phone).
Businesses can use the internet for direct sales without incurring ‘bricks and mortars’ costs, e.g., rent.

Can lead to health concerns, e.g., eye and back issues associated with computer work.
Expensive and time-consuming to train workers to use new technology.
Staff may resent having to retrain and do a job differently (e.g., Ford’s wheelwrights).
Technology is expensive to develop, install, and maintain.
Risk that reliance on technology means that business may stop if technology issues, e.g., system update or power outage.

Invention is the creation of a new idea, product, or process.
- Invention happens before Innovation.
Innovation means bringing a new idea into being.
- Such as a new product for sale (Product Innovation) or a new way of producing something (Process Innovation).
Individuals and businesses can legally protect their innovations and inventions as intellectual property.

Copyright is the legal protection against copying the work of authors, composers, or artists.
Patent is the right to be the sole user or producer of the invention of a new process or product for up to 20 years.
Trade marks are legally protected ways businesses distinguish their product from competitors, usually a logo.
A trade mark can include words, logos, shapes, colors, sounds, smells, or any combination of these.

A business may use the PEST Analysis tool to assess both internal and external aspects of the firm.
1. Political Factors - e.g., new laws such as insulating rental properties requirements.
2. Economic Factors – e.g., change in exchange rate impacts NZ’s imports and exports.
3. Social Factors – e.g., change in demographics or trends.
4. Technological and Environmental Factors – e.g., innovation such as internet and smartphones.
Activity: Complete a PEST Analysis for Air New Zealand on p.85 of the workbook.