M2/P3
Ethical issues that affect society as a whole
These issues include ethics in; finance, human resources, production, sales and marketing,
and intellectual property. These ethical issues all have their own social implications as they can
affect society as a whole.
Ethics in Finance
Businesses have to deal with finance regularly and there are many ways in which an
organisation can be unethical when it comes to financial payments and dealing.
Bribery
Bribery is a form of corruption where financial muscle is used to gain an unfair advantage, for
example if a business pays someone off to cover up a scandal. Because Bribery is used to gain
an unfair advantage, a business who is using bribery could be doing things which are wrong or
unfair and this could have an effect on the society as a whole, especially as it could affect rival
companies.
Executive Pay
Excessive pay for executives is an issue as top executives are getting paid much more than
what their effort is worth. US companies now have to include a single figure for the total pay of
their executive in their annual reports, so shareholders can see exactly what the top executives
are being paid, including perks and pensions as well as their salary.
Insider Trading
This is the illegal use of privileged information in dealing on a stock exchange. It is detected in
the UK by the Securities and Investment Board (SIB) and in the US by the Securities and
Exchange Commission (SEC). Confidential, quality information from their company is traded
with another person, usually in exchange for money.
Lobbying
Lobbying is where you approach an MP or minister with requests for actions or information.
The intention is to persuade politicians to adopt a particular cause or issue to benefit it.
Lobbying can be a source of corruption, especially because sometimes bribery is used when
lobbying to persuade the politician.
Ethics in Finance in Relation to Primark and the consequences for Primark Stakeholders
Primark received Ethical Consumer's worst rating for likely use of tax avoidance strategies as
they have investment subsidiaries in Guernsey & Jersey as well as a holding company in Hong
Kong and Luxembourg, this was an unethical way for Primark to deal with financial transactions.
This bad ethical rating could lead to other potential shareholders not wanting to invest in the
business due to it having dealt with their finances unethically in the past, therefore current
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