Ethics

Question 1

What are ethics?

Answer 1

Moral guidelines which govern acceptable behaviour

Question 2

What is ethical behaviour?

Answer 2

About doing what is morally right

Question 3

Why are ethics crucial in decision making?

Answer 3

• used by individuals to make choices how to behave
• they define acceptable conduct of business
• an ethical decision is one that is both legal and meet the shed ethical standards of the relevant business community community

Question 4

Ethical issues raised by activities of MNCs: pay and working conditions

Answer 4

• the way that employees and management are rewarded can create significant ethical issues
• the strong “bonus culture” in financial services is a good e.g of this

Question 5

Ethical issues raised by activities of MNCs: environmental impact

Answer 5

MNCs operate across the globe, so perhaps they have a particularly important role to play to ensure they do not deplete the world’s natural resources
- BP and Volkswagen have suffered significant financial damage front
Bird association with environmental damage

Question 6

Ethical issues raised by activities of MNCs: supply chain and management

Answer 6

A multinational business cannot claim to be ethical if it ignores unethical practices by its suppliers e.g:
- use of child labour and forced labour
- production is sweatshops
- violation of basic rights of workers
- ignoring health, safety and environmental standards
An ethical business has to be concerned with the behaviour of all businesses that operate in supply chain

Question 7

Ethical issues raised by activities of MNCs: marketing

Answer 7

Marketing is an ethical minefield for most businesses

Several MNCs have been damaged after been caught marketing in an apparently unethical way- particularly around pricing

Question 8

Strengths of behaving ethically

Answer 8

• higher revenues- demand from positive consumer support
• improved brand and business awareness and recognition
• better employee motivation and recruitment
• new sources of finance e.g ethical investors

Question 9

Weaknesses of behaving ethically

Answer 9

• higher costs e.g sourcing from fair-trade suppliers rather than lowest price
• higher overheads e.g training and communication of ethical policy
• danger of building up false expectations