3.5.1 Ethics in business Is it ethical to sell fake goods? Is it ethical to knowingly buy fake goods? Is it ethical to copy a friends CD into your iTunes? Is it ethical to charge £2.00 for a can of Coke at a concert or sport venue? Is it ethical to tell a customer a dress looks great when it doesn’t fit just to make the sale? Is it ethical to buy tickets for a concert and then sell them on at a much higher price once they have all sold out? 3.5.1 Ethics in business 3.5.1. Ethics in business

Supporting the community 3.5.1. Ethics in business Ethical Trends Ethics looks at morality in decision making i.e. what is thought to be right and wrong Destroying resources Child labour Ethical Trends Supporting the community Carbon footprint Animal welfare

Business ethics Business Ethics looks at morality in decision-making. This infers doing what is ‘right’. Of course, peoples’ views can differ on what is right or wrong. There will also be conflict between stakeholders. Whenever a firm makes a decision there will be conflicts between stakeholders. Remember, every decision made has an opportunity cost. Profits for a firm or higher wages for staff Cheaper production or less pollution Supplier benefits or lower consumer prices Survival of the business versus needs of other stakeholders 3.5.1. Ethics in business 3

Business ethics Most large firms will produce an ethical code of practice. This will detail the steps that a firm will take to be ethical and to uphold the firm’s social responsibilities. This might include: To take responsibility for the stakeholders of the business To be environmentally friendly wherever possible To promote products with integrity, honesty and accuracy To compete within legal and moral guidelines The Press Complaints Commission have a Code of Practice that all members should adhere to. Do you think that they do? ACTIVITY The problem with Ethics is that it is subjective. This means that it is based on people’s values – and values are based on different people’s judgements. Read this article. Do you think that TESCO was right to sell this product? 3.5.1. Ethics in business 4

Do you recognise these logos? 3.5.1. Ethics in business Do you recognise these logos? Should ALL businesses have an objective of behaving in an environmentally friendly and ethical way? How might this impact on their ability to achieve other objectives?

3.5.1. Ethics in business Business ethics Is ethical behaviour simply a form of Public Relations (PR)? There are a number of reasons for a firm to have an ethical business culture. These range from the profit motive to wanting to ‘do the right thing’. Why be ethical? Build loyal customer base through USP Attract best workers who want to work for a company with high standards Lower costs through recycling and less waste Motivation across the company Why not be ethical? More expensive to source raw materials More expensive capital goods to cut pollution Training workers to be ethical costs money Losing custom to unethical practices from more ruthless competitors Providing better facilities for staff costs money Higher costs lead to higher prices and lower revenues Visit the Institute of Business Ethics to learn more. They even run a student essay competition 6

Pressure groups Pressure groups are people with a common cause or interest. They act collectively to create public awareness and try to change the behaviour of business, consumers and government. Examples of pressure groups in the UK include Amnesty International, Greenpeace, Shelter and trade unions. 3.5.1. Ethics in business 7

Pressure groups In small groups draw a spider diagram to show as many activities you can think of that a pressure group can do to try and influence behaviour. Think about customers, Government and businesses. Activities 3.5.1. Ethics in business

Pressure groups Have a break Orang-utans descend on Nestle HQ Have a break Do you think that Greenpeace’s behaviour is fair? How do ethics affect customer behaviour? Greenpeace attack on Nestle 3.5.1. Ethics in business 9

ACTIVITY Choose a business that attracts high profile media attention e.g. Tesco, M&S, Primark, Nike, Gap, Shell Carry out some independent research into its approaches towards its social responsibilities and/or its ethics Produce an article for a business magazine evaluating how they have responded to social and ethical factors 3.5.1. Ethics in business

3.5.1. Ethics in business Question time SuperGroup prides itself on maintaining high standards of integrity and honesty in carrying out its business activities. It expects the support of its managers, employees and business partners. The Group expects its suppliers to adopt ethical labour practices and respect the rights of their employees. What is meant by the term “ethics” in business? (2 marks) Explain one advantage to SuperGroup of being an ethical business. (3 marks) State one disadvantage to SuperGroup of being an ethical business. Explain the effect on the business. (4 marks) What is meant by the term “pressure group”? (2 marks) Explain one action a pressure group may take if SuperGroup were found to be using a supplier who exploited child labour. (3 marks)