Environment and ethics

• Ethical issues faced by businesses

  • Should firms use child labour?
  • Is animal beating needed in products?
  • What wage should firms pay in poor countries?
  • Should firms get involved in certain activities?
• Ethical decisions


  Decisions made by businesses that consider moral principles and values
• Unethical business practices


  • Financial intimidation
  • Ridicule
  • Coercion
  • Discrimination
  • Psychological
  • Misrepresentation/fraud
  • Deception
  • Theft
  • Stealing
  • Misinterpreting one's own work
  • Taking someone's idea or work
• Whistle blowing


  A person who raises concerns about wrongdoing in an organisation
• Code of conduct


  A set of rules outlining the responsibilities or proper practices for an individual or organisation
• External influences on business

  • Economic
  • Political
  • Technological
  • Competition
  • Environmental
• Constraints


  Something that limits or controls actions
• Types of constraints


  • External constraints (limits the business has no direct control over)
  • Internal constraints (limits the business has direct control over)
• Ethical issue


  An issue that involves moral principles and values
• Sustainability


  Development that doesn't risk the living standards of future generations
• Social responsibility


  Business decisions that benefit stakeholders other than shareholders (e.g. workers, community, suppliers, banks)
• Businesses want to be environmentally friendly

  To demonstrate social responsibility and avoid using non-renewable sources which will raise prices in the future
• Private cost


  Cost paid by the business for an activity (e.g. building a factory)
• Private benefit


  Gain for the business resulting from an activity
• External cost


  Cost paid by the rest of society as a result of a business's activity
• External benefit


  Benefit reaped by the rest of society as a result of business activity
• Pressure groups


  Organisations of people who try to change business and government decisions
• Pressure groups can carry out boycotts and protests