Sustainability And Ethics: Ethics: Ethics And Ethical Issues In Commerce (Copy)
6.2 Ethics
6.2.1 Ethics And Ethical Issues In Commerce
Introduction
- Ethics refers to principles of right and wrong that guide business behaviour.
- In commerce, ethics ensures that business activities are honest, fair, socially responsible, and environmentally safe.
- Ethical issues often arise in advertising, employment, environmental protection, and trade.
- Key areas include:
- Meaning of ethics
- Role of fair trade in commerce
- Common ethical issues: misleading advertising and harmful product disposal
Meaning Of Ethics In Commerce
- Ethics in commerce means conducting business in a way that respects consumers, employees, society, and the environment.
- It goes beyond legal compliance — some actions may be legal but still considered unethical.
- Examples:
- Selling expired goods at discount is legal in some places but unethical.
- Avoiding taxes through loopholes may be legal but not ethical.
- Importance: Builds trust, improves reputation, and ensures long-term sustainability of commerce.
Role Of Fair Trade In Commerce
Meaning
- Fair trade is a movement that ensures producers in developing countries receive fair prices, decent working conditions, and sustainable livelihoods.
Features
- Fair wages for workers and farmers.
- No exploitation of child labour.
- Environmentally sustainable farming practices.
- Transparency in trade relationships.
Example
- Coffee farmers under the Fairtrade label receive higher prices than in conventional markets.
- Supermarkets sell fair trade bananas, tea, and cocoa to support ethical sourcing.
Importance
- Encourages ethical consumption among customers.
- Provides small producers with access to global markets.
- Promotes sustainability and social justice in global trade.
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 Commerce Full Scale Course
Ethical Issues In Commerce
1. Misleading Advertising
Explanation
- Misrepresenting a product’s features, price, or benefits in order to boost sales.
- Examples include:
- False health claims in food and medicine advertising.
- Manipulative “before and after” photos in beauty product ads.
Impact
- Customers lose trust in businesses.
- Can lead to legal action and fines.
- Damages reputation of entire industries.
Example
- A weight-loss product advertises “Lose 10kg in a week” without scientific evidence — unethical and misleading.
2. Harmful Disposal Of Products
Explanation
- Some businesses dispose of waste and products irresponsibly, causing environmental harm and health risks.
- Examples include:
- Factories dumping toxic waste into rivers.
- Retailers burning unsold clothing instead of recycling.
Impact
- Pollutes the environment.
- Damages community health.
- Reduces sustainability of commerce.
Example
- In 2018, Burberry faced criticism for destroying unsold luxury goods worth millions to protect brand exclusivity.
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 Commerce Full Scale Course
Case Studies
Case Study 1: Fairtrade Coffee
- Farmers in Ethiopia and Colombia receive fair wages under the Fairtrade system.
- Builds trust between consumers and producers.
Case Study 2: Volkswagen Emissions Scandal
- Misleading advertising and false emission claims damaged trust in the car industry.
Case Study 3: Plastic Waste Disposal
- Coca-Cola and Pepsi criticised for excessive plastic waste; forced to adopt recycling initiatives.
Balanced Evaluation
- Ethical practices improve brand image, build loyalty, and ensure sustainability.
- However, being ethical may increase costs (e.g., paying higher wages, using eco-friendly materials).
- Short-term profits may be lower, but long-term benefits (trust, stability, customer retention) outweigh the costs.
Conclusion
- Ethics in commerce ensures fairness, transparency, and responsibility in business operations.
- The role of fair trade highlights the importance of supporting producers and promoting sustainability.
- Common ethical issues like misleading advertising and harmful disposal of products show why businesses must balance profitability with responsibility.
- Commerce that follows ethical principles creates long-term value for both businesses and society.
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 Commerce Full Scale Course