3.5 Business Ethics

Business ethics -

Ideas about what is morally correct or not, applied in a business situation.

• Production, suppliers, workers, customers, competitors, the product, the environment and local communties.

Trade off - is where something is given up in order to gain or achive something else.

• Profit for ethical behaviour

Pressure groups -

Is an organised group that seeks to influence goverment policy or to protect or advance a particular cause or interest. e.g. animal rights or the enviroment

Ways they achive their aimsPublic meetings, distributing leaflets and posters, petitions, boycotting products, lobbying.

Why are ethics important?

• Prevent pressure groups from damaging your business.
• Allow a firm to attract ethically motivated customers.
• Enhance a firms brand.
• Reduce the likelyhood of any cost regulation

Why might ethics not be important?

• It is a budget firm so may not be interest in ethics.
• At times of lo consumer confidece ethics are less important.
• It can increase costs.
• Other factors could casue profits to rise and may be more important.

Supply Chain - The processes that are involved in the route taken by a product from raw materials needed to create it right through to the final customer.

Environmental Effects

Short term

• Trafic congestion through thransport and deliveries.
• Air, noise and water pollution through manufacturing and industry.

Long Term

• Climate change
• Depletion of resources

BRIC Countries - Who income has changed the most

• Brazil
• Russia
• India
• China

MINT Countries - Which are going to show the most growth

• Mexico
• Indonesia
• Nigeria
• Turkey

Average income - High income countries spend more on imports. Whereas low income countries spend less on imports.

Wages - Developing countries are a source of cheap imports for rich developed countries.

Quality and technology - Businesses in developed countries sell high quality goods to devoloping countries. Whereas businesses in developing countries sell low quality goods to devloped countries.

Import Protection

• Tariffs - Is a tax put on imported goods which makes them more expensive for buyers
• Quota - A limit on the physical number of goods that can be imported over a period of time.

Export Subsidies

• Where the goverment gives moeny to businesses to reduce the cost of exporting thus making their products more competitive.

Goverment and EU regulations

• Accounting Regulations
• Trade Descption Act
• Health and Safety Laws
• Minimum Wage
• Maternity and Paternity Rights

Avoiding Goverment Regulations

• Moving to another counrty to avoid tax
• Producing products in a country with a lower minimum wage.
• Selling products in countrues ith relaxed health and safety laws.

Goverment regulations can also been know as red tape.