3.5 Business Ethics

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Ethics in business and pressure groups

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.

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Ethics Summary

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.
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Environmental Issues

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
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Economic factors affecting international trade

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
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Factors which affect the growth of a country/impor

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.
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Impacts of the goverment and EU on business

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.

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