U2-1 Ethical practice

U2-1 Ethical practice

1. Corporate Social Responsibility (CSR)

   • C - Business wide, whole corporation
   • S - Society
   • R - Taking ownership of actions

2. Why be ethical?

   • Laws on environmental protection are stronger
     • Fine and loss of reputation
   • Widespread public support against waste/ climate change
     • Good publicity
   • Consumers putting pressure on firms, how?
     • Not buying products
     • Complaining
     • Writing to newspapers/ telling journalists
     • Protesting

3. Ethical Practise

   • - Recycling waste - Using recycled materials - Donating to charity - Supporting/ sponsoring charity events - Fair wages for staff - Fair working hours - Safe working conditions - Not polluting the air/river

4. Unethical practise

   • - Using sweatshop conditions - Low or no pay - Forced labour - Unsafe working conditions - Polluting environment - Sponsoring wrong/ inappropriate organisations - Underage workers  - Wasting materials - inefficiency - Animal testing - Blatant extortion - Broken/ dangerous/ low quality products

5. Advantages

   • Can increase long term profits
   • Other ethical firms will want to do business with you
   • Workers more motivated
   • Government more likely to give contracts
   • Consumers might prefer your business
   • Develop a good relationship with suppliers

6. Disadvantages

   • Reduces short-term profits - dearer materials etc
   • Paying wages above NMW is expensive
   • Not bribing to win contracts - lost sales
   • End up paying more for supplies

7. Examples

   • McDonalds in Europe aimed to achieve 100% sustainable packaging by 2010
   • Nestle were found to be causing mass deforestation, after protest by greenpeace now using environmentally friendly oil