Business Ethics Flashcards

All 7 cards in this deck

What is ethical behaviour in business?

Acting in ways stakeholders consider to be both fair and honest — doing what is right, even when the law does not require it.

Give three ways a business can behave ethically.

Paying suppliers on time; using fair trade resources; fair advertising.
(Also: good working conditions, donating funds to local communities, not testing on animals.)

What does ethical treatment of workers involve?

Paying fair wages, providing good working conditions and allowing flexible working — and never using child labour.

Give two benefits to a business of behaving ethically.

Good publicity and a positive reputation, which brings customer loyalty and higher sales; and better motivated workers.

Give two drawbacks to a business of behaving ethically.

Higher costs, as ethically sourced supplies and fair wages cost more; this can mean higher prices and lost competitiveness, lowering profit margins.

What is a trade-off between ethics and profit?

e.g. a clothing business choosing between two suppliers

Giving up one thing in favour of another — e.g. paying more for a fair trade supplier and accepting a lower profit margin.

True or false? Behaving more ethically always reduces a business's profit.

False. Higher costs may be offset by a better reputation, customer loyalty and higher sales, so profit can rise.