6.1 ethical considerations
- Created by: hanfa
- Created on: 27-12-20 15:47
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- 6.1
- ethical consideration: concerned with what is wrong and right or behaving in a morally correct way
- treatment of workers: not employ child labour, paying workers fairly, fair working hours, provide safe working conditions, not discriminating against workers.
- treatment of suppliers: avoid late payments as it will cause cash flow problems for the supplier, pay fair prices to the supplier.
- treatment of customers and marketing decisions: not overcharging customers, avoid making false claims in ads, avoid selling dangerous products/services.
- sourcing of materials: avoid buying from businesses that employ child labour, not buy from unsustainable suppliers.
- advantages of behaving ethically in business
- cots may be lower as well-paid workers with good working conditions mean productivity would be high, there is also increased employee retention is they enjoy the job, which means recruitment costs would fall and it would be cheaper and easier to recruit additional workers.
- sales may be higher because reputation for being ethical will lead to trust from customers. some buyers only want to buy from sustainable sources to keep their reputation
- profits may be higher because of higher sales and lower costs.
- investment may be higher because some investors only want to invest in sustainable ethical businesses
- disadvantages of behaving ethically in business
- costs may be higher as they have to pay fair wages and doesn't employ cheap child labour. there are also costs in health and safety provision and purchasing ethically produced goods.
- sales may be lower as advertising is honest and doesn't sell goods that customers wont need
- profit may be lower because the business charges lower price than its competitors or pays higher costs than its competitors. or customers prefer to buy lower prices from an unethical producer.
- investment may be lower because profits may not be high which puts investors off investing.
- ethical consideration: concerned with what is wrong and right or behaving in a morally correct way
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