Chapter 20 Ethics in business Flashcards
(14 cards)
Chapter 20
What are Business Ethics?
Edexcel 2BS01 Business Studies GCSE Unit 3.5
Ideas about what is morally correct t, applied in a business situation. Many large businesses want to show they are ethically responsible on a range of issues from production to suppliers, employees, customers, competitors, their product, the environment and local communities
Chapter 20
Why are moral (ethical) issues that affect a business organisation often complex?
Edexcel 2BS01 Business Studies GCSE Unit 3.5
Because the stakeholders may not all agree on the morals they should follow
You may have to give up some of your profit to have good morals (ethics)
Chapter 20
What are the possible trade-offs between ethics and profit?
Edexcel 2BS01 Business Studies GCSE Unit 3.5
A business may not always be able to follow it’s ideal ethical philosophy as quite often ethics will increase costs for the business
Being ethical will increase costs, reducing profit if consumers are not willing to pay extra for the products.
If prices are increased to cover the extra cost, then you may no longer have competitive prices so may reduce profit.
You may not have enough customers with an ethical stance therefore you will sell fewer products, reducing profits.
Chapter 20
What are Pressure groups?
Edexcel 2BS01 Business Studies GCSE Unit 3.5
Organisations that support causes such as workers’ rights, the environment, animal welfare and world poverty e.g. trade unions, Greenpeace, RSPCA and Oxfam
Chapter 20
How can a business respond to a pressure group?
Edexcel 2BS01 Business Studies GCSE Unit 3.5
Businesses can act in several ways when it comes to pressure groups.
• They can ignore them
• work against them
• work with them
Chapter 20
What is Fair Trade?
Edexcel 2BS01 Business Studies GCSE Unit 3.5
• It promotes the use of products that meet internationally agreed fair trade standards
Chapter 20
What are the reasons why a business can charge higher prices for products which are produced in a more ethically responsible way?
Edexcel 2BS01 Business Studies GCSE Unit 3.5
- customers may feel that the extra money is worth it to ensure the workers get a fair wage
- customers may feel that they are doing something for the environment
- customers may feel that the extra money that the producers get allows them to be more competitive
Chapter 20
For a large business, what are the two advantages that means they can be both ethically responsible and profitable?
Edexcel 2BS01 Business Studies GCSE Unit 3.5
- If they are a large business they can benefit from economies of scale in order to offset the extra costs
- If they are a large company with a big brand image and so a good marketing campaign can maintain or increase their sales
Chapter 20
Say why it is ethical for a business to promote themselves as a healthy product, when, in comparison to its competitors, it’s not.
Edexcel 2BS01 Business Studies GCSE Unit 3.5
- there are no laws preventing them from advertising it
* consumers can make up their own minds by reading the information on the label / about the product
Chapter 20
Say why it is NOT ethical for a business to promote themselves as a healthy product, when, in comparison to its competitors, it’s not.
Edexcel 2BS01 Business Studies GCSE Unit 3.5
- they should not suggest that it is healthy when it is not when it is compared to other drinks available on the market
- it seems that they are trying to make a profit by misleading consumers
Chapter 20
What are the benefits to a business of being an ethical business?
Edexcel 2BS01 Business Studies GCSE Unit 3.5
- better branding
- that it allows them to add value
- that is gives them a unique selling point (USP)
Chapter 20
What are the disadvantages to a business of being an ethical business?
Edexcel 2BS01 Business Studies GCSE Unit 3.5
- higher costs
- consumers may not be willing to pay extra
- they may find that they are no longer competitive
Chapter 20
What are the ways in which a business might become more ethical?
Edexcel 2BS01 Business Studies GCSE Unit 3.5
e
- Paying workers higher wages
- Improved working conditions
- Reducing pollution
- Buying Fairtrade supplies
- Donations to the community
- Reducing packaging
Chapter 20
What are the drawbacks a business could face as a result of pressure group activity?
Edexcel 2BS01 Business Studies GCSE Unit 3.5
- Damage to brand
- Increased costs
- Forced to change decision making
