Unit 37 Business Ethics
BTEC Business Level 3, Unit 37: Understanding Business Ethics
Businesses are limited in what they do. Sometimes by laws and sometimes by the conventions and social codes we live by. Gathered together these are what we refer to as ethics and they can apply to every aspect of business behaviour. Whereas it could be argued that most laws have there origins in ethics, ethical behaviour, by individuals and business go beyond legal requirement and are discretionary, that is to say we can choose to follow them or not.
Businesses have not always behaved ethically and many still do not. This unit examines what pressures there are on businesses to behave in an ethical manner.
Learning outcomes
On completion of this unit you should:
1 Understand the meaning and importance of ethics in the business world
2 Understand the implications of businesses operating ethically
3 Know the social implications of business ethics
4 Understand ethical concerns facing different communities.
Context:
You have been asked to research and draw up a report explaining business ethics for an organisation that is about to be floated on the stock exchange. The report will demonstrate an understanding of ethical business behaviour; the implications of it and why it is increasingly seen as such a serious issue for more and more businesses.
P1 explain the ethical issues a business needs to consider in its operational activities.
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Begin by explaining your own understanding of the term “ethical issues” explaining the examples given below:
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Corporate Governance
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Corporate Social Responsibility (CSR)
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Environment - Greenfacts
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Sustainability Andrex Sustainability
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Human Rights - Apple manufacturing in China
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Corruption / Working Conditions
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You must explain how these influence an increasing range of business activities.
M1 (links with P1) assess how a selected business could improve the ethics of their operations - (BP, Co-op, Tesco or any other)
Operational activities: definitions of business ethics; ethical activities; values of businesses; professional ethics; individual ethical behaviour
Ethical issues: corporate governance; corporate social responsibility; environment; sustainability; human rights; corruption; trading fairly; legal and regulatory compliance; business practices; working conditions; individual ethical responsibilities
P2 explain the implications for the business and stakeholders of a business operating ethically.
Business
Stakeholders
What conflicts of interest can arise among stakeholders if a business responds to ethical pressures?
How might these influences affect a business’ performance?
Give examples of laws that may have an ethical basis that businesses must comply with.
Explain the implications of these laws on businesses. How has business behaviour been altered by these laws? Give examples to illustrate your point.
How can stakeholders influence their own ethical pressures on a business
P3 describe the social implications of business ethics facing a selected business in its different areas of activity.
M2 assess the social implications of business ethics facing a selected business in its different areas of activity.
Assess = impact / Adv v Disad / Positive v Negative
Use BP as your case study Discuss the Gulf of Mexico problem. Brief introduction only, followed by:
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find indicators of the ethical values of the company.
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Explore ethical issues relevant to the company
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Think about:
Areas of activity: ethics in finance, e.g. bribery, executive pay, insider trading, lobbying; ethics in human resource management, e.g. discrimination, worker surveillance; ethics in production, e.g. animal testing, genetically modified (GM) foodstuffs, planned obsolescence; ethics in sales and marketing, e.g. spamming, shills, product placement, green washing; ethics in intellectual property e.g. software piracy, counterfeiting, peer-to-peer file sharing.
Implications: global, e.g. environment; corporate, e.g. legal and regulatory compliance, policies and practices; individual (employee, consumer).
P4 examine the ethical concerns of the communities in which a selected business operates.
M3 explain the ethical concerns of the communities in which a selected business operates and suggest measures that could be taken to improve corporate responsibility.
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Following on from the previous section you must look at the communities in which your chosen company operates. This could be local, regional, national or global. BP - USA, or Tesco (UK)
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Identify any pressure groups that might seek to influence the activities of the company. Tesco, Greenpeace
For the Merit - what measures could any of the businesses take to improve their corporate responsibility.
Issues: corporate social responsibility; globalisation; cultural imperialism; ecology; environment; fair trade; corruption; child labour; outsourcing; personal attitudes; whistle blowing.
D1 evaluate the impact of a selected business’s ethical behaviour on stakeholders and the business.
Websites
http://en.wikipedia.org/wiki/Business_ethics Business ethics from Wikipedia, the free encyclopaedia
www.bbc.co.uk/news BBC News
www.benjerry.co.uk Ben & Jerry’s Ice Cream
www.business-ethics.com Business Ethics online magazine
www.business-ethics.com/100best.htm Business Ethics online – 100 Best Corporate Citizens
www.ethicalconsumer.org Ethical Consumer
www.ethicalconsumer.org Ethical Consumer
www.ethical-junction.org Ethical businesses directory for the UK and Ireland
www.ethicalthreads.co.uk Ethical clothing and merchandise
www.uk.oneworld.net/guides Guides on wide range of ethical issues
www.ft.com Financial Times
www.hm-treasury.gov.uk HM Treasury
www.ibe.org.uk/faq.htm Institute of Business Ethics
www.loreal.com L’Oreal
www.nike.com Nike
www.nologo.org Official No Logo site
www.redbox.gov.uk The Red Box, an interactive resource to teach learners about tax and public spending
www.tax.org.uk The Chartered Institute of Taxation
www.tes.co.uk The Times Educational Supplement
www.uk.thebodyshop.com The Body Shop
www.unilever.com Unilever