ethical

• Ethical business


  One that considers the needs of all stakeholders when making business decisions
• Ethical business


  • Takes into consideration its social responsibilities when setting objectives and considering strategy
  • Considers the moral rights and wrongs of any strategic decisions that are made
• Businesses today have a much wider set of social responsibilities than in the past
• The view that shareholders are the only stakeholders that need to be satisfied is long gone
• Stakeholders


  • Employees
  • Suppliers
  • Customers
  • Environmental and animal rights groups
• Treating employees as most valuable asset

  • Taking care of their health and safety
  • Ensuring high conditions of work
  • Paying a living wage
• Ethical responsibilities should not stop with own employees, those working for suppliers are equally as important
• It cannot be regarded as ethical if a business claims to pay its own employees a living wage if workers further down the supply chain, in perhaps a less developed country, earn the equivalent of 40p an hour
• Treating suppliers fairly


  • Sticking to agreed contracts
  • Not forcing renegotiation upon suppliers
  • Sharing burdens of developing, supplying products
  • Paying on time
  • Not putting pressure upon suppliers' cash flow
• Fair Trade is a well-known organization which ensures fair play to suppliers in all stages of the supply chain
• What customers want


  Quality product or service at a fair price
• Businesses which act unethically fail to fulfil this moral commitment to customers
• Environmental pressure groups have become increasingly effective in influencing business decision makers
• Examples of environmental pressure groups

  • Greenpeace
  • Friends of the Earth
• Smaller pressure groups acting on a local issue have also taken on large business organisations with varying degrees of success
• Animal welfare


  • Major issue for those retailers with claims to be ethical
  • Grocers look down the supply chain to ensure the welfare of animals
  • Retailers focus marketing on how well supplying farmers treat their livestock
• Clothing retailers have responded to animal rights issues in relation to the raw materials they use
• PETA (People for Ethical Treatment of Animals) has ensured that the argument has progressed well beyond fur skin coats, covering treatment of other animals used in the clothing supply chain