3.4.4 - BUSINES ETHICS

Question 1

Define Ethics

Answer 1

Moral Principles that Govern a Person’s Behaviour or Conducting Of an Activity

Question 2

Explain Ethics on Strategic Decisions

Answer 2

• Businesses Want to Appear to be Doing “the Right Thing” But this Isn’t Always Possible If they Wish to Make a Profit
• often there Is a Trade-Off Between Ethics and Profitability

Question 3

Explain the Negative Impact on Profits Caused By Tradeoff with Ethics

Answer 3

• can Raise Costs -> e.g. Paying Higher Wages than Necessary
  Adopting an Ethical Code of Practise can Raise Costs -> Staff have to be Made Aware of Code and Trained to Implement it
• can Reduce Revenues

Question 4

Explain the Positive Impact on Profits Caused By Tradeoff with Ethics

Answer 4

• Some Companies have Used their Ethical Stance for Marketing Purposes -> can Increase Sales, Drawing In Customers who are Attracted by this
• Most that Take CSR can Act as the Equivalent of Insurance Pollicy -> Firms Don’t Want to be Seen as Behaving Unethically and Face Serious Penalties for Breaking the Law, or See Sales Fall as Customers Protest Against Behaviour

Question 5

What are the Different Ways Businesses Use Pay and Rewards

Answer 5

• to Attract Employees with the Right Skills , Experience and Knowledge. where Skills are Rare, Pay Needs to be Very High
• to Reward and Motivate Existing Staff -> firms need to Ensure that Staff are Motivated to Work to Best Ability to make Profit
• Maximise Productvity

Question 6

What is Corporate Social Responsibility?

Answer 6

a Business Approach that Contributes to Sustainable Development by Delivering Economic, Social and Environmental Benefits for All Stakeholders

Question 7

Explain CSR and us

Answer 7

• CSR means Business Considers Impact Decisions Have on Citizens
• Considers Responsibilities they Have Towards Society as Stakeholders
• CR Principles are Incompatible with Profit Maximisation Objective
• CSR Credentials Used As a Selling Point/Feature of Products

Question 8

State 4 Ways of CSR

Answer 8

• Reduce Climate Change + Negative Environmental Impact
• Positive Links with Community + Regard for Human Rights in Employment
• Ethical Trading Policies
• Using Sustainable Resources

Question 9

Explain CSR for Shareholders

Answer 9

• Interested in Profit Performance of Business and Any Potential Dividend Payout from It
• Less Concerned with Costly Ethical Issues and May Even and May even Discourage Ethical Initituates or Finanical Grounds

Question 10

Explain CSR for Stakeholders

Answer 10

• Interested in the Way that Suppliers of Materials and Components to the Business are Treated - e.g. ; Fair Wages and Good Working Conditions
• Pressure Groups are Interested in Use of Child Labour and Sweatshops in Production Process