U6 Ch. 27 Business Responsibility

Question 1

Business Ethics

Answer 1

Moral standards that help people to make ethical choices in a business. Distinguish between right and wrong. Clearly defines ethically unacceptable behaviour.

Question 2

How to encourage ethical employees

Answer 2

1. Code of Ethics (formal written statement setting out expected behaviour from business in dealings
2. Encourage “Whistle-Blowing” (report unethical behaviour)
3. Lead by example. (When senior staff are highly ethical it will encourage subordinates to behave similarly)
4. Training. (Training should include modules on ethical behaviour)
5. Rewards (Ethical behaviour should be rewarded and there should be punitive measures for those who act unethically.)
6. Ethical Audit. (Independent ethics auditor examines all aspects of business and submits a report highlighting areas that need to be improved)

Question 3

Benefits of code of ethics

Answer 3

1. Improves business reputation. Displaiyng code of ethics and acting in line with it creates good brand image leading to loyal customers
2. Encourages whistle-blowing Encourages staff to confidentially report unethical behaviour. Rewarding whistleblowing
3. Encourages ethcial behaviour at all levels. Reducing losses due to theft and fraud.

Question 4

Challenges of code of ethics

Answer 4

1. More training Required regularly to ensure employees are aware of code of ethics and properly understand it.
2. Needs to be updated regularly. To include new behaviours which are considered unethical, particularly around new technologies.
3. Industrial Relations Challenges. Employees may feel code is a critique of personal morals reducing their trust in management and leading to higher likelihood of IR issues

Question 5

Social Responsibilities of business

Answer 5

1. Avoid Excessive salaries for senior management
2. Reasonable ROI for investors
3. Fair and honest advertising
4. Follow H and S regulations
5. Deal with complaints quickly and fairly
6. Fair wages to employees
7. Provide Equal Opportunities for pay and promotion
8. Pay Taxes due
9. Adhere to government regulation

Question 6

Characteristics of Environmentally Responsible business

Answer 6

1. Honest Communication. Don’t cover environmentally damaging accidents
2. Staff awareness. Promote environmental awareness among staff with training, workshops and including environment as part of code of ethics.
3. Sustainable Product Design. Recyclable materials and environmentally friendly production process.
4. Compliance with Environmental Laws
5. Environmental Audits. Independent studies how business impacts environment and writes report highlighting areas for improvement in business to reduce negative impacts.

Question 7

Impact of meeting environmental responsibilities

Answer 7

1. Improves business reputation. Gives advantage over those who don’t and creates good brand image leading to more sales
2. Easier to access finance. Some investors will only be willing to invest in businesses that are environmentally responsible.
3. Customer Loyalty. Many customers are becoming more aware of environmental issues and boycotting companies that act unresponsibly.
4. Increase in Production Costs. Environmentally responsible production is often more costly.
5. Staff training. Money and time to ensure staff are aware of environmental responsibilities.