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BTEC Business Unit 37, Understanding Business Ethics P1 P2 M1 D1 (Explain the ethical issues a business needs to consider in its operational activities) (Explain the implications for the business and stakeholders of a business operating ethically) (Assess$12.02
BTEC Business Unit 37, Understanding Business Ethics P1 P2 M1 D1 (Explain the ethical issues a business needs to consider in its operational activities) (Explain the implications for the business and stakeholders of a business operating ethically) (Assess
BTEC Business Unit 37, Understanding Business Ethics P1 P2 M1 D1
BTEC Business Extended Diploma
Unit 37, Understanding Business Ethics P1 P2 M1 D1
This is the complete version of the coursework assignment, which has already been marked and approved by a teacher.
P1 P2 P3 P4 P5 P6 M1 M2 M3 D1 D2
...
Unit 37: Understanding Business Ethics P1 P2 M1 D1
P1 p2 M1 d1
Unit – 37 (Understanding Business
Ethics)
BTEC National Diploma In Business Level 3
The Date
Author: Your Name
Your Teacher
1
,Unit 37: Understanding Business Ethics P1 P2 M1 D1
Unit 37 – Understanding Business Ethics
To:
From:
Date:
Ref:
On completion of this unit I should:
1) Understand the meaning and importance of ethics in the business world.
2) Understand the implications of business operation ethically
3) Know the social implications of business ethics
4) Understand ethical concerns facing different communities.
Task 1:
a) Explain the ethical issues a business needs to consider in its operational activities.
b) Explain the implications for the business and stakeholders of a business operating
ethically.
c) Asses how a selected business could improve the ethics of their operations
d) Evaluate the impact of a selected business’s ethical behaviour on stakeholders and the
business.
1.0 Introduction
I work for a company of Independent Financial Advisers specialising in ethical investment. I
provide a service advising clients who wish to make investments that are environmentally
and socially responsible to businesses that I have researched and considered as being a viable
investment. My client needs to be sure that the money they are investing as a stakeholder is
going to a business that has a proven record of ethical trading and social responsibility.
1.1 Terms of Reference
In this report, I’m to describe the ethical issues Shell needs to consider in its operational
activities and to explain the implications for Shell and its stakeholders operating ethically. I
will also talk about how Shell could improve ethics of their operations. Afterwards I will
evaluate the impact of Shell ethical behaviour on stakeholders and the business overall.
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,Unit 37: Understanding Business Ethics P1 P2 M1 D1
2.0 Shell
Shell is a global group of energy and
petrochemicals companies with around
87,000 employees in more than 70
countries and territories.
The company focuses on exploring for
new global oil and gas reserves, and
developing major projects where its
technology and know-how add value
Shell supplies, trades and ships crude
oil worldwide, manufactures and
markets a range of products and produces petrochemicals for industry.
In the UK sector of the North Sea, Shell produces more than 12% of UK oil and gas on
behalf of Shell and its joint venture partners. Shell has interests in more than 50 fields,
operating more than 30 offshore installations, 30 subsea installations, two FPSOs (Floating
Production Storage and Offtake vessel), three onshore gas plants and a marine terminal for
distribution of Natural Gas Liquids globally.
http://www.shell.com/global/aboutshell/our-business.html
2.1 Business Ethics
Ethics at its simplest is a system of moral principles. They affect how people make
decisions and lead their lives, ethics is also concerned with what is good for individuals and
society and what is described as moral philosophy.
The Business Ethics is also referred to ‘’Corporate Ethics’’ is a form of ethics, which is the
behaviour that a business adheres to in its daily dealings with the world. The ethics applies
not only to how the business interacts with the world at large, but also to their one-on-one
dealings with a single customer.
Any successful business, which aims to protect its reputations and save important
connections inside the country and connections worldwide, must adopt sound of ethical
decision-making practices. Businesses which behave in a socially responsible manner are
much more likely to enjoy ultimate success than those whose actions are motivated solely by
profit making. Knowing the difference between right and wrong and choosing what is right is
the foundation for ethical decision making. In many cases, doing the right thing often leads to
the greatest financial, social, and personal rewards in the long run. But the problem arises
when things get to people’s culture and traditions: different people have different beliefs
about what constitutes ethical behaviour. The law defines what is and is not legal, but the
distinctions between moral right and wrong are not always so clear. In many situations lines
between right and wrong are blurred. Such situations can lead to ethical concerns and cases of
disputes. Despite that, good business ethics should be a part of every business.
Many global businesses, including most of the major brands that the public use, can be seen
not to think too highly of good business ethics. Many major brands have been fined millions
for breaking ethical business laws. Money is the major deciding factor.
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, Unit 37: Understanding Business Ethics P1 P2 M1 D1
If a company does not trade, communicate or conduct its activities in the ethical manner,
breaks the laws, they usually end up being fined. Many companies have broken anti-trust,
ethical and environmental laws and received fines worth millions. The problem is that the
amount of money these companies are making could outweigh the fines applied. Furthermore
even if a business makes billions of profits yearly, the unethical behaviour which heats the
reputation of the company, afterwards will result in decrease of the sales level and lose of
suppliers and investors, minding that these factors are crucial to any business, such a
company might end up bankrupt.
The Cost of Trading Ethically
Most of the businesses today begin to think that ethics and compliance do offer added
value to a business. But there are a lot of disputes going on between people about the
high cost of ethics compliance, addressing the question of money, time and human
resources consumption. Is it really worth it to be an ethical organisation and lose on
performance and productivity?
A lot of environmental issues analytics suggests that companies which have already
made a commitment to ethics compliance will continue to do so regardless of the
economy, but companies which have not yet done so are not likely to spend additional
money to start. Thus being ‘’Green’’ usually cost more.
Business ethics tended to reduce a company's ability to maximise its profit. For
example, a multinational company may move its manufacturing facility to a
developing country to reduce costs. Practices acceptable in that country, such as child
labour, poor health and safety, poverty-level wages, no environment pollution fees,
cheap labour and coerced employment, will not be tolerated by an ethical company
and as such it gives an advantage to those companies, which do not care about ethics.
Also ethically polite companies do miss out on human resources, time and potential
of the company, which are used to promote and follow the ethical practices, instead of
to be used for generating additional profit.
The Benefits of Trading Ethically
In the last few years it has become increasingly clear that there is a real business case
for an ethics and compliance function. Clients are starting to ‘screen’ suppliers against
their corruption policies, human rights, labour standards and environmental
performance. This is particularly evident in construction, oil, gas and public
procurement processes, in which Shell participates both: directly and indirectly. As a
result, organisations need to be able to demonstrate ethical behaviour and compliance
with regulations if they want survive the public’s pressure. We see this trend growing
strongly, particularly with anti-corruption compliance and those companies who are
recognised as the ‘’greenest’’ and the ‘’cleanest’’ are getting very powerful and
untouchable brand name and reputation, which in the long run going to attract
customers, suppliers and potential investors to trade with that business.
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