Ethics

Question 1

Business Ethics

Answer 1

Ethics are the moral principles that shape the way that a business behaves.​

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Ethical businesses consider their social responsibilities when devising their corporate objectives and strategies and think carefully about the ‘moral rights and wrongs’ of a particular course of action.​

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Corporate Social Responsibility (CSR) has become an increasingly important consideration for firms as they seek to become good social citizens.​

Question 2

Ethical issues facing the business

Answer 2

Environmental​

Animal Rights​

Treatment of Workers​

Treatment of Suppliers​

Treatment of Customers​

Question 3

Corporate social responsibility

Answer 3

CSR aims to ensure that firms conduct their business in a way that is ethical. ​

This means taking account of their social, economic and environmental impact, and consideration of human rights.​

It might involve:​

Working in partnership with local communities​

Socially responsible investment (SRI)​

Building relationships with staff & customers​

Environmental protection and sustainability​

Question 4

Conflict: Ethics V profit

Answer 4

Firms that wholeheartedly embrace CSR face higher costs.​

Exploiting cheaper foreign labour or using cheap supplies from less-developed countries is profitable but conflicts with an ethical stance.​

Shareholders are likely to find it less easy to embrace CSR as company profits decline from ‘doing the right thing’. ​

Revenues may decline as firms opt-out of unethical promotional campaigns e.g. encouraging young people to smoke in Africa

Question 5

Analysis of CSR

Answer 5

drawbacks :

Reduced profitability​

Unhappy shareholders​

Is CSR a genuinely held belief?​

Does a firm act consistently in all countries that they operate in?​

​Advantages of CSR

Improved brand image​

Marketing advantages​

Reduced labour turnover & absenteeism​

Improved staff motivation​

Attract top candidates for jobs​

Question 6

Carroll’s CSR Pyramid​

Answer 6

Carroll’s pyramid is very simplistic in its reasoning. Customers want an open and honest business not a firm that disguises their behaviour behind a public image of donating to good causes

Carroll states that firms firstly need to establish a sound financial base from which to act responsibly. He believed that the ultimate goal of any business was to be able to contribute towards society in a positive manner e.g. donating to good causes or sponsoring local children’s teams.