4.4.2

Ethics of Global Business

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Ethics in Global Business

Ethics refers to the moral principles which inform business decisions above and beyond the requirement to do so by law.

Stakeholder conflicts

Stakeholder conflicts

  • A stakeholder is any individual or group of individuals involved in or affected by the actions of a business.
  • The objectives of different stakeholder groups can conflict, and this is called stakeholder conflict.
  • Stakeholder conflict can occur in different ways:
    • Shareholders can demand dividend payments and shareholder value, but this may mean compromising the pay and working conditions of employees.
Environmental impact

Environmental impact

  • Being ethical can involve considering your impact on the environment and taking steps to reduce the emissions and waste produced by the business.
  • If MNCs use cheap labour to extract non-renewable resources in some countries, many consumers may use this as unethical.
The supply chain

The supply chain

  • When operating globally, a business must consider its supply chain:
    • Global businesses may need to ensure they do not exploit labour in countries where working conditions may be poorer than home markets.
    • Global businesses may need to ensure they do not support child labour in countries where regulations may be poorer than home markets.
    • For example, Zara was accused of exploiting child labour through its supply chain in Turkey though claimed it did not realise its suppliers were using children to manufacture clothing items.
Misleading consumers

Misleading consumers

  • When carrying out marketing activities, businesses must ensure they comply with laws and regulations to ensure they do not use misleading product labelling or inappropriate promotional activities.
    • For example, food producers from across Europe were found to be using misleading labelling to sell meat products in 2015. Some meat products were found to contain horsemeat.
Opportunity cost

Opportunity cost

  • Although a worker earning £1/day working for an MNC sounds awful. If the alternative jobs available in that nation pay 50p/day, then the MNC is doubling that person's earning power and standard of living.
  • The impact of MNCs should not be judged by your standards, but by the opportunity cost for that individual worker.
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1

Exploring Business

1.1

Features of Business Organisations

1.1.1Sole Traders & Partnerships1.1.2Private & Public Limited Companies1.1.3Types of Liability & Not-For-Profits1.1.4Purposes of Businesses1.1.5Purposes of Businesses 21.1.6The Different Economic Sectors1.1.7Multinational Companies1.1.8Stakeholders1.1.9Influence of Stakeholders
1.2

Organisation of Businesses

1.2.1Organisational Structure1.2.2Types of Organisational Structures1.2.3Business Aims & Objectives1.2.4Business Aims1.2.5Business Objectives
1.3

Business Environment

1.3.1External Influences1.3.2Political & Legal Change1.3.3Economic Environment1.3.4Social & Technological Environment1.3.5Lifestyle & Technological Environment1.3.6Corporate Social Responsibility1.3.7The Competitive Environment1.3.8Innovation1.3.9Risk & Uncertainty1.3.10Porter's Five Forces1.3.11SWOT Analysis
2

Marketing Campaigns

2.1

Marketing

2.1.1Setting Marketing Objectives2.1.2Customer Needs2.1.3The Market2.1.4Competition & The Market2.1.5Consumer Behaviour2.1.6Market Research2.1.7Forms of Market Research2.1.8Market Segmentation2.1.9Cultural & Social Factors in Marketing2.1.10Promotional Decisions 32.1.11Pricing Strategies
2.2

Marketing Mix

2.2.1Marketing Mix2.2.2Product Life Cycle2.2.3Pricing Decisions & Price Skimming2.2.4Pricing Decisions & Price Penetration2.2.5Promotional Decisions2.2.6Promotional Decisions 22.2.7Promotional Decisions 32.2.8Market Mapping
3

Business Finance

3.1

Sources of Finance

3.1.1Internal Finance3.1.2External Finance3.1.3External Finance 23.1.4Sources of Business Finance
3.2

Financial Planning

3.2.1Revenue3.2.2Costs3.2.3Cash & Cash Flow3.2.4Cash & Cash Flow 23.2.5Break-Even Analysis3.2.6Profits
3.3

Financial Statements

3.3.1Balance Sheets3.3.2Income Statements3.3.3Liquidity
4

International Business

4.1

Globalisation

4.1.1Growing Economies4.1.2Specialisation & Trade
4.2

International Business

4.2.1Internationalisation4.2.2International Trade4.2.3MNCS4.2.4Conditions that Prompt Trade4.2.5Assessment of a Country
4.3

International Economic Environment

4.3.1Globalisation4.3.2Factors Contributing to Globalisation4.3.3Protectionism4.3.4The EU & the WTO4.3.5Trading Blocs
4.4

Factors Affecting International Business

4.4.1Global Competitiveness4.4.2Ethics of Global Business4.4.3Controlling MNCs4.4.4Cultural & Social Factors in Marketing
5

Principles of Management

5.1

Management & Leadership

5.1.1Managers5.1.2Management Theories5.1.3Managing Organisational Culture5.1.4Management Style
5.2

Theories of Motivation

5.2.1Motivating & Engaging Employees5.2.2Taylor's Theory5.2.3Mayo's Theory5.2.4Maslow's Theory5.2.5Herzberg's Theory
5.3

Managing Change

5.3.1Change5.3.2Key Factors in Change5.3.3Scenario Planning5.3.4Managing Change5.3.5Managing Strategic Implementation
6

Business Decision Making

6.1

Business Principles & Practices

6.1.1Influences in External Environments6.1.2Product Decisions6.1.3Competitive Environment6.1.4Corporate Strategy6.1.5Quantitative Sales Forecasting6.1.6Legislation
6.2

Quality Management

6.2.1Importance of Quality6.2.2Measuring Quality6.2.3Total Quality Management6.2.4Evaluating TQM
6.3

Human Resources

6.3.1Contracts6.3.2Recruitment6.3.3Training a Workforce
6.4

Documents & Business Decisions

6.4.1Sales Forecasts6.4.2Managing Strategic Implementation6.4.3Problems with Strategy

Practice questions on Ethics of Global Business

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  1. 1
    If a shareholder is demanding higher dividend payments, what could be compromised?Multiple choice
  2. 2
    How businesses can ensure its supply chain is ethical:True / false
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Global Competitiveness

Controlling MNCs