Ethics, environment

Question 1

Business ethics -

Answer 1

-is concerned as to whether businesses have morally correct behaviour. This can be applied to its relationship with suppliers, employees, customers, but will also be relevant to its relationship with the wider community. An ethical decision will be one that is based on what is morally right, rather than the most profitable option. Ethics should not be confused with the law. A decision might be unethical but legal, or ethical and illegal.

Question 2

Ethical decision might result…

Answer 2

…increased costs, good publicity, more positive relationships with stakeholders

Question 3

Fair trade-

Answer 3

-is a scheme that some businesses agree to. This shows that producers and retailers are being ethical in the way they purchase goods and raw materials from developing countries. They pay higher prices, so that the workers in the developing countries can receive higher wages and experience a better standard of living.

Question 4

Benefits of fair trade (4)

Answer 4

1. Higher revenues – customers are increasingly making purchasing choices based on ethics, with the actual selling price charged being less important in their decision-making
   Improved brand/business awareness and recognition
2. Easier to attract and recruit staff
3. Increased employee motivation and staff retention
4. New sources of finance are possible, for example from ethical investors

Question 5

Drawbacks of fair trade (4)

Answer 5

1. Higher costs, for example sourcing from Fairtrade suppliers rather than from suppliers offering the lowest prices
2. Higher overheads, such as training and communication of ethical policy
3. A danger of building up false expectations amongst customers
4. Bad publicity if business is found to be acting “unethically”

Question 6

Types of pollution (5)

Answer 6

1. Air
2. Noise
3. Light
4. Water
5. Noise

Question 7

Environmental policies advantages (3)

Answer 7

1. Good publicity
2. Meets the requirements of environmental laws
3. Customers willing to pay higher prices

Question 8

Environmental policies disadvantages (2)

Answer 8

1. Increased costs
2. Not all countries will have similar laws

Question 9

Sustainability -

Answer 9

-it must be able to maintain the current levels of production in the future. As many resources are non-renewable, this causes problems for both businesses and consumers.

Question 10

Product (marketing mix and pressure groups)

Answer 10

-there may be objections to products produced by labour that has been exploited or that has involved product testing on animals. Products could be made more ethically, based on environmentally friendly processes. Supply chains might be changed to ensure there are no issues with suppliers.

Question 11

Price (marketing mix and pressure groups)

Answer 11

-if too high a price is charged for basic or essential goods, there may be pressure group protests. This has happened with petrol and train fares. There have also been successful pressure group campaigns to reduce the price of some medicinal drugs.

Question 12

Promotion (marketing mix and pressure groups)

Answer 12

-pressure groups may object to persuasive promotional campaigns. Bulk offer promotions by businesses are seen by some pressure groups as encouraging waste. There have also been protests against adverts for addictive products or payday loan companies. Greenpeace uses professional advertising campaigns against governments and businesses that are not in favour or protecting the environment or preventing climate change.

Question 13

Place (marketing mix and pressure groups)

Answer 13

-with the growth of e-sales, there has been widespread closures of retail and financial outlets such as shops, banks and post offices. There have been various local and national pressure group campaigns against these measures, claiming that they will hurt the most vulnerable members of our society.

Question 14

Marketing mix and pressure groups:

Answer 14

A business’s marketing policy is often the target for consumer pressure groups. They can see marketing as a way to exploit the consumer in favour of excessive business profits.

Question 15

Traffic congestion: effects on producers (3)

Answer 15

1. Transport might be retimed to avoid rush hour
2. Distribution might be moved from road to rail
3. Might relocate to benefit from better transport links

Question 16

Traffic congestion: effects on consumers (3)

Answer 16

1. Service might be slower
2. Prices might go up because of the changes
3. Consumers may but cheaper goods from less environmentally friendly sources

Question 17

Recycling requirements: effects on producers (4)

Answer 17

1. All businesses must try to reduce waste
2. Packaging should be minimised and be capable of recycling
3. Any waste that can be recycled must be separated, this service might vary depending on the area where the business is based
4. Recycling collections must be arranged and paid for

Question 18

Recycling requirements: effects on consumers (3)

Answer 18

1. Will pay more for goods and services
2. The society in which people love should be more pleasant, as there will be less rubbish disposal sites in the future
3. Resources will last longer, so future costs will not increase as much

Question 19

Waste disposal: effects on producers (3)

Answer 19

1. Businesses must have all waste collected and disposed of properly
2. Can be combined with recycling arrangements
3. Some products have strict disposal arrangements

Question 20

Waste disposal: effects on consumers (2)

Answer 20

1. Consumers will pay more for goods and services
2. The society in which people love should be more pleasant, as there will be less rubbish disposal sites in the future

Question 21

Pollution: effects on producers (3)

Answer 21

1. Businesses will need an environmental permit if they produce significant air pollution
2. All businesses must not be a nuisance to their neighbours: smoke, dusts, smells or noise
3. Must have permission to discharge industrial waste into water supply and are responsible for cleaning up any land contaminated

Question 22

Pollution: effects on consumers (3)

Answer 22

1. Pollution will be reduced
2. Business costs will increase => prices will go up
3. Less need in future for government to increase taxes to clean up

Question 23

Pressure groups -

Answer 23

-is an organisation with shared aims which seeks to influence government policy, business activity and legislation