6.1 Ethical & Environmental Considerations Flashcards

Any two of: good working conditions for employees; donating funds to local communities; paying suppliers on time; using fair trade resources; fair advertising; not testing on animals.

Buying from producers in developing countries at a price that covers their costs and gives them a fair income.

By setting a code of conduct the factories must follow, e.g. safe working conditions and no child labour, and inspecting them regularly to check it is kept.

Any one of: improved brand image; less likely to pay fines for pollution; can charge a premium price.

By reducing the greenhouse gas emissions from its operations, e.g. using electric vehicles and renewable energy instead of fossil fuels.

Doing what is morally right in business decisions, e.g. paying suppliers fair prices.

Acting ethically usually raises costs, so short-term profit may fall even though it can attract customers and raise revenue later.

Ethically-minded consumers may pay a premium price for the products, increasing revenue and improving brand image.

Operating in a way that meets present needs without damaging the environment or using up resources for the future.

Any two of: reduce packaging used; make greater use of renewable energy; recycle waste; reduce emissions from transport.

Costs rise, e.g. more expensive packaging or materials, which may force prices up and reduce competitiveness.

Any two of: pollution of the air or water; noise; extra traffic from lorries and deliveries; greenhouse gas emissions that add to climate change; using up land and natural resources.

Treatment of workers, treatment of suppliers, treatment of customers, how materials are sourced, and marketing decisions.

Suppliers want to keep working with it, so its supplies are more reliable and it may get better terms.

Customers lose trust and the brand image suffers, so customers are lost.

Improved motivation, because staff want to work for a business with ethical standards.

Sustainability, waste disposal, pollution and climate change.

Any one of: extreme weather disrupts supplies of raw materials; insurance costs rise, e.g. because of flooding risk.

Demand for new or more sustainable products, e.g. electric vehicles or flood insurance.

Any two of: paying unfairly low wages; forcing staff to work excessive hours; unsafe working conditions; employing children; treating some workers unfairly because of who they are.

It damages the supplier's cash flow, so a small supplier may be unable to pay its own bills and could even be forced to close.

Any one of: charging an unfairly high price, e.g. not passing on a fall in its own costs; selling fake or unsafe goods; making false claims about a product.

Marketing that is honest and does not mislead, harm or offend, so customers have accurate information to make good choices.

A legal requirement is something the law forces a business to do. An ethical decision goes beyond the law because the business believes it is right, e.g. paying staff more than the minimum wage.

Workers trust an ethical employer, so fewer leave, and its reputation attracts job applicants, which cuts recruitment costs.

A resource that is replaced naturally, so it need not run out if used carefully, e.g. wind, solar power or wood from managed forests.

A resource that is not replaced naturally within a human lifetime, so it will eventually run out, e.g. oil, coal or gas.

It can use waste as a cheap raw material to make products to sell, or earn money by collecting and recycling other businesses' waste.

A long-term change in the Earth's climate, such as rising average temperatures and sea levels, caused mainly by greenhouse gases from burning fossil fuels and cutting down forests.

Using less energy, raw materials and packaging, and recycling waste, lowers its bills.

Resources become more expensive as they become scarcer, and non-renewable ones may eventually run out.

Business Activity

Marketing

People

Operations

Finance

Influences on Business

The Interdependent Nature of Business