Businesses can have environmental costs (e.g. from damaging the environment). Many resources used by the business are non-renewable. Some businesses make products that can be harmful to people's health. Some businesses unfairly exploit cheap labour.
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Social Benefits
Taxes on businesses profits help pay for governmental services (schools/hospitals). Businesses provide jobs. Provide essential services to the county (transport/services, electricity). Goods e.g. medicine/safer cars/holiday make people happy/safer
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Social Issues Effecting Business Decisions
Businesses are changing buying decisions to meet demands of customers. Buying raw materials from fairtrade sources/product development in ethical way(nontoxic materials)/environmentally friendly packaging/products/operating sustainably.
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Taking them seriously
Taking environmental/ethical issues seriously can give a competitive advantage. New customers can be attracted to a 'green' or 'socially responsible' image. Reputation of a brand image can be damaged by pressure groups (friends of the earth).
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Multinational firms: Why become multinational
Lower transport costs/increased knowledge of local market conditions/avoid trade barriers/reduce risks of foreign fluctuations/access to raw materials or labour/avoid paying tax/win subsidies from government (force workers to accept lower wages).
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Benefits of MNEs for the HOST COUNTRY
An MNE (multinational enterprise) is a source of foreign investment. Creates employment for locals. Gives host country access to foreign technology and working methods. Can gain tax from them. The firms exports will improve host's balance of payments
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Problems with MNEs
Workers can be unskilled/have to work for long hours with limited wage/MNEs may ask for reduced tax rates or subsidies/when MNEs benefit from economies of scale, local companies may be driven out/can exert a strong influence on gov to change laws
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Other cards in this set
Card 2
Front
Taxes on businesses profits help pay for governmental services (schools/hospitals). Businesses provide jobs. Provide essential services to the county (transport/services, electricity). Goods e.g. medicine/safer cars/holiday make people happy/safer
Back
Social Benefits
Card 3
Front
Businesses are changing buying decisions to meet demands of customers. Buying raw materials from fairtrade sources/product development in ethical way(nontoxic materials)/environmentally friendly packaging/products/operating sustainably.
Back
Card 4
Front
Taking environmental/ethical issues seriously can give a competitive advantage. New customers can be attracted to a 'green' or 'socially responsible' image. Reputation of a brand image can be damaged by pressure groups (friends of the earth).
Back
Card 5
Front
Lower transport costs/increased knowledge of local market conditions/avoid trade barriers/reduce risks of foreign fluctuations/access to raw materials or labour/avoid paying tax/win subsidies from government (force workers to accept lower wages).
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