Summary: (2.2) Business Objectives And Business Decisions

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• 1 (2.2) Business Objectives and Business Decisions

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• What role do pressure groups play in business ethics?

  • Pressure groups act as external stakeholders.
  • Focus on ethical practice of multinationals/industries.
  • Use direct and indirect actions to influence change.
  • Challenge businesses considered unethical (e.g., animal furs).
  • Support businesses with strong ethical stances like Fairtrade.

• What are common areas where ethics are tested in business?

  • Advertising
  • Personal Selling
  • Suppliers
  • Contracts
  • Pricing

• How does consumer action influence business ethics?

  • Consumers act against businesses behaving irresponsibly.
  • Target businesses with unacceptable practices.
  • Positive actions support businesses with ethical stances.
  • Example: Fairtrade encourages ethical sourcing.

• What are the benefits of behaving ethically for a business?

  • Higher revenues from positive consumer support
  • Improved brand awareness and recognition
  • Better employee motivation and recruitment
  • New sources of finance, e.g., ethical investors

• Why is ethical consideration important for businesses in their supply chain?

  • Avoids unethical practices like:
    • Child labor
    • Sweatshops
    • Rights violation
    • Health and safety standards

• What are the advantages of adopting ethical business behavior?

  • Higher revenues from positive consumer support.
  • Improved brand and business awareness.
  • Better employee motivation and recruitment.
  • New finance sources from ethical investors.

• What must ethical businesses be concerned with in the supply chain?

  • Ethical businesses must be concerned with the behavior of businesses in their supply chain.
  • Key entities: suppliers, contractors, distributors, sales agents.

• What are the possible drawbacks of behaving ethically?

  • Higher costs due to buying from Fairtrade suppliers rather than lower price alternatives
  • Increased overheads, e.g., training & communication of ethical policy
  • Risk of creating false expectations

• How does consumer activism impact business ethics?

  • Increases scrutiny of business activities
  • Consumers:
    • Interested in sourcing of products
    • Influence businesses to improve ethical practices

• What are the disadvantages of ethical business practices?

  • Higher costs, e.g., sourcing from Fairtrade suppliers.
  • Increased overheads for training and communication.
  • Risk of creating false expectations among stakeholders.