4.4.2 - Ethics

Question 1

What does the term business ethics mean?

Answer 1

Business ethics refers to the principles and norms that govern business behaviour

Question 2

What are some ethical considerations businesses should take?

Answer 2

• Marketing considerations: inappropriate promotional activities, misleading product labelling
• Stakeholder conflicts
• Environmental considerations: waste disposal, emissions
• Supply chain considerations: child labour, labour exploitation

Question 3

What are some stakeholder conflicts that businesses should put into consideration?

Answer 3

• Management vs workers
  Management are more focused on output or
  reducing costs, workers want to be safe and
  comfortable
• Management vs owners
  Owners want management to maximise profits,
  but managers will often sacrifice some profits in
  the interest of the workers
• Company profits vs resource depletion
  Owners aim to maximise output but, higher
  output requires more rapid usage of natural
  resources and more environmental damage

Question 4

Why should MNCs consider pay and working conditions when looking at being ethical?

Answer 4

• MNCs may demonstrate unethical behaviour by exploiting workers in less economically developed countries by paying them lower wages
• Some MNCs also behave unethically by providing poor working conditions in order to cut costs
• Some MNCs have issues with child labour

Question 5

What are some environmental considerations that MNCs should make?

Answer 5

• Waste management
• Emissions: often released from factories, can have a negative impact on local communities, causing health issues