Rising Ethical Concerns in Business
TITLE
In recent years a significant number of businesses have been accused of being unethical.
ESSAY
Title: The Importance of Ethics in Business Decision💥Making
Introduction:
Ethics in business decision💥making refers to making choices that are morally right with a consideration of stakeholders' interests. In recent years, there has been a growing concern surrounding unethical behavior in businesses, raising questions about the role of senior managers in considering ethics when making decisions.
Ethical Decision💥Making in Business:
Ethical decision💥making involves making choices that are in line with moral principles, considering the impact on employees, customers, suppliers, and the environment. Senior managers should prioritize ethical considerations to ensure that their actions are aligned with societal values and norms.
Cost and Limitation of Business Activities:
One argument against considering ethics in business decisions is that it may increase costs and limit certain activities. However, short💥term financial gains should not outweigh the long💥term benefits of maintaining a good reputation through ethical practices.
External Scrutiny and Stakeholder Expectations:
Businesses are increasingly under scrutiny by external agencies and pressure groups, emphasizing the need for senior managers to consider ethics when making decisions. Moreover, stakeholders, including customers and investors, have higher expectations of ethical behavior, which can impact the company's reputation and bottom line.
Impact of Unethical Decisions by Senior Managers:
Senior managers often make decisions that can significantly impact others, such as engaging in exploitation, bribery, or supporting child labor. The consequences of such unethical decisions can lead to reputational damage and legal consequences, highlighting the importance of ethical considerations.
Competitive Advantage and Stakeholder Values:
Ethical behavior can provide a competitive advantage for businesses, as consumers prefer to support companies with values aligned with their own. Senior managers should take into account the values of stakeholders and consider ethical practices as a way to differentiate themselves from competitors.
Conclusion:
In conclusion, senior managers should consider ethics when making business decisions to maintain a good reputation, mitigate risks, and build trust with stakeholders. While there may be short💥term challenges associated with ethical decision💥making, the long💥term benefits outweigh the costs. It is essential for businesses to prioritize ethics in decision💥making to ensure sustainable success in today's competitive and transparent business environment.
SUBJECT
BUSINESS STUDIES
LEVEL
A level and AS level
NOTES
In recent years a significant number of businesses have been accused of being unethical. Discuss whether senior managers should consider ethics when making business decisions. [20]Answers may include the following: • Ethical decision💥making – decisions taken with a reference point of morality – the ‘right’ (rather than ‘wrong’) decisions in relation to employees, customers, suppliers, the environment. • Ethical decisions may increase costs and limit business activities. • There is increasing scrutiny of business behaviour and activities by outside agencies/pressure groups. • Senior managers likely to take decisions that can have a significant impact on others (examples – exploitation, bribery, child labour). • Senior managers becoming more aware of consequences of unethical decisions – reputational damage (examples). • Senior managers may see a competitive advantage in being ethical and stakeholders may have a greater expectation of ethical behaviour. Its importance may depend on a number of factors: – Extent of stakeholder pressure. – Values of senior managers and/or owners. – What are other businesses doing? • Senior managers may make a risk assessment of ethical / unethical decisions and will need to take account of external factors and the unique situations experienced. Answers might demonstrate evaluation by asking questions such as: • Does the need to avoid pressure group activity / government action (taxes and grants) put pressure on the senior manager? • Also answers may propose that internal concerns about reputation and brand image suggest that the extra short term costs of becoming more ethical can be outweighed by the likelihood of future long term benefits. 20 9609/12 Cambridge International AS/A Level – Mark Scheme PUBLISHED May/June 2018 © UCLES 2018 Page 11 of 12 Question Answer Marks 6 Please note that an answer may not specifically mention the term senior managers but may well refer to important business decisions such as relocation, changing suppliers, CSR, supply chains, code of conduct, brand reputation, purchase of fixed assets, production/output, HRM decision such as the difficulty /ease of attracting employees to the business. These need to be credited within Levels 3, 4 and 5.