Environmental And Ethical Issues (Copy)
6.2 Environmental and Ethical Issues
6.2.1 Environmental Concerns
- Business impact on the environment:
- Air pollution from factories and transport.
- Water pollution from chemicals and waste.
- Deforestation from farming or construction.
- Global warming from greenhouse gas emissions.
- Resource depletion from overuse of raw materials.
- Externalities (Spillover effects):
- External costs (negative externalities): costs on society not paid by the business (e.g. pollution, health problems, traffic congestion).
- External benefits (positive externalities): benefits to society not paid for by the business (e.g. job creation, new infrastructure, improved technology).
- Sustainable development:
- Meeting present needs without harming future generations.
- Businesses can contribute by using renewable energy, recycling, reducing waste, adopting eco-friendly production.
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Business Studies Full Scale Course
Responses to Environmental Pressure
- Why businesses respond:
- To meet legal requirements (avoid fines, shutdowns).
- To maintain good reputation and brand image.
- To gain competitive advantage (eco-friendly products appeal to consumers).
- To reduce long-term costs through energy saving and efficiency.
- Pressure from pressure groups, media, and customer demand.
- How businesses respond:
- Reducing emissions and waste.
- Using cleaner technology.
- Eco-labelling and green marketing.
- Recycling schemes.
- Partnering with environmental NGOs.
- Legal controls:
- Pollution control laws.
- Waste management regulations.
- Carbon emission limits.
- Bans on harmful substances.
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Business Studies Full Scale Course
Ethical Issues
- Definition: Moral principles that guide business decisions beyond profit-making.
- Common ethical issues:
- Child labour and exploitation of workers.
- Paying unfair prices to suppliers (especially in developing countries).
- Unsafe working conditions.
- Misleading advertising.
- Testing products on animals.
- Bribery and corruption.
- Conflicts between profit and ethics:
- Being ethical may increase costs (e.g. higher wages, eco-friendly production).
- Can reduce competitiveness against unethical rivals.
- May lower short-term profits but improve long-term sustainability and reputation.
- Business responses to ethics:
- Fair trade sourcing.
- Paying fair wages and ensuring safe working conditions.
- Avoiding exploitative practices.
- Transparent advertising.
- Corporate Social Responsibility (CSR) initiatives.
Quick Recap Keywords
- External costs = negative impacts (pollution).
- External benefits = positive impacts (jobs).
- Sustainable development = present needs without harming the future.
- Pressure groups = force businesses to act responsibly.
- Legal controls = pollution laws, waste regulations.
- Ethical issues = child labour, fair prices, worker rights.
- CSR = business responsibility to society and environment.
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Business Studies Full Scale Course