Explains ethical codes of practice and ethical objectives, the advantages/disadvantages of ethical behaviour, corporate social responsibility (CSR), pay and rewards, and the trade off between profit and ethics
Ethics – consideration of the moral right and wrong of a decision at an often strategic level.
Ethics of Strategic Decisions:
The Environment
Corruption
Animal Rights
Workers in Developing Countries
Ethical Codes of Practise and Ethical Objectives
Lay down how employees in the business should respond in situations where ethical issues arise.
Differ from one business and one industry to another, however they may contain statements about:
- Environmental responsibility
- Dealing with customers and suppliers in a fair and honest manner
- Competing fairly and not engaging in practices such as collusion or destroyer pricing
- The workforce and responding fairly to their needs
Ethical/Responsible Behaviour
Advantages Problems
Higher revenues Higher costs e.g. using Fair Trade
Improved brand & business awareness suppliers
& recognition Higher overheads e.g. training of
Better employee motivation & ethical policy
recruitment Danger of building up false
New sources of finance e.g. ethical expectations
investors
Ethical objectives
Ethical codes of practice may develop from ethical objectives of businesses. Ethical objectives can be explicit:
It will not test its products on animals
It will deal with suppliers fairly
It will not accept bribes from customers
Explicit objectives will have to be carefully thought out. The business could get bad publicity if it went against
its stated ethical objectives.
Corporate Social Responsibility (CSR)
Corporate Social Responsibility is a business’ responsibility to not just shareholders, but to all
stakeholders
Businesses may conduct social and environmental audits; they are voluntary so no rules are set about
how they should be conducted or measured
Businesses use a wide range of measures which differ from business to business
Social and environmental audits might include some of the following:
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