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Summary Unit 37 - Understanding Business Ethics (21021c)
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Summary of 6 pages for the course Unit 37 - Understanding Business Ethics at PEARSON (unit 37)
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L3 Btec National ExtendedDiploma in Business
Unit 37: Business Ethics Subject
Teacher: Anthony Johnson
Klein Luyindula
Explain the implications for the business and stakeholders of a business
operating ethically- P2.
Starbucks have a number of stakeholders groups, each with different interests in what
the business does. The Starbucks owners are perhaps the first keys stakeholders and
want good financial results from their investments which is why Starbucks managers
responsibility to ensure good financial results are delivered.
Other stakeholders we can cover are the shareholders for Starbucks as the shareholders
can refer to private individuals or institutions who hold a percentage of shares as
investments within the organization as pension funds or mortgage endowments.
More stakeholders I can outline are the organizations employees as they are vital to the
business’s activity whilst at the same time providing a labor force work for business
owners to create wealth and benefit from (e.g. businesses owners forcing child to work
in mines and factories).
The last stakeholders I will be outlining is the customers as they are classed as natural
stakeholders towards an organization because of service they receive from the business
which either satisfies there needs and the customers continues to be satisfied and they
begin to develop the relationship between business and customer.
, L3 Btec National Extended
Diploma in Business
Unit 37: Business Ethics Subject
Teacher: Anthony Johnson
Klein Luyindula
The owners of Starbucks will be affected due to their individual actions and lack of
morals. They own multiple factories and plantations which are located in third world
countries. These places often employ children from the age of 11. They work for the
company in extreme and sickening conditions for as little 20p for a full day's work
without any benefits such as free healthcare or food allowances. This is child Labor, it
deprives children of their childhood, potential and dignity. It's extremely harmful to
their physical and mental development. The owners of Starbucks can be affected by this
as it portrays them in a negative light and labels them as disreputable, which has led to
pressure groups getting involved by creating, advertising and participating in boycotts
and protests.
Due to this, many consumers have boycotted and refused to support and buy from
Starbucks stores. This has led to their sales rapidly decreasing, leading to their revenues
and profits to drastically diminish. This means that the owners' pocket less and make a
reduced profit from the business income accounts. Furthermore, resulting in the
business being unable to pay for expenditure costs such as rent, taxes, maintenance and
equipment.
In addition to this, members of staff are affected by the vile illegal actions of Starbucks.
Their wages may be cut due to Starbucks losing money, due to the boycotts. As the
employees will earn less money means that they have less to spend on essentials which
they need to provide for their families and themselves. On top of this, many staff will be
made redundant, meaning that they will have no form of stable income, this could
possibly result in the former workers having to live a lower quality of life and even live-
in complete poverty.
Members of staff who work in these illegally run factories are affected by this as well as
they are forced to work long shifts every day without breaks for very low amounts of
money. Due to them not having free healthcare or workplace insurance if they become
ill, they will not be willing to spend unruly amounts of money that they don’t have on a
doctor.
The environment is also deeply affected, both negatively and positively. The negative
environmental factors include having poor-built factories producing excessive amount
of carbon dioxide which breaks away the o-zone layer, they also have no way of ridding
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