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Business Ethics & Social Responsibility
‘Doing the Right Thing’
Business Ethics
Business Ethics is the way in which a business behaves when making decisions on
how to satisfy customer needs and wants.
Being ethical is when a business makes a decision not just based purely on making
profit, but considers issues such as:
Should we use products tested on animals when making our goods?
Should we use child labour to make our products as cheaply as possible?
Should we produce goods when we know it will harm the environment?
The companies on the following page are well known for considering what is right when
making decisions.
Task 1: Think, Pair, Share
Read through the information provided.
With your shoulder partner, discuss and agree why you think the following
4 companies consider themselves to be ‘ethical’.
-Copy the table provided into your jotter.
Share your reasons with the class.
Learning Intention
To understand what makes a business ethical
To understand what makes a business socially responsible and be able to
give examples
I can explore ethical issues relating to business practice eg Fairtrade,
Recycling & Packaging
When participating in an enterprise activity, I can explore ethical issues
relating to business practice and gain an understanding of how businesses help
to satisfy needs. SOC 3-20a
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The Co-op asked its customers what was important to them and they found that for over a quarter of customers their top ethical concern was animal welfare. As a result, the Co-op made several changes in their food stores. It banned the sale of eggs from caged hens and converted its entire own-brand hot beverage range to Fairtrade. The Co-op also became the first UK supermarket to ban animal testing for own-brand toiletries and cosmetics and it does not sell any products containing fur.
At our head office, stores and warehouses we are working tirelessly to reduce the amount of waste we send to landfill, and we would love you to help us by thinking about your waste too. After all, one man's trash is another man's treasure. We have joined forces with MADE-BY, a not for profit association who are helping Ted to look at our garments a bit more closely, from the fibres we use to make the products to the conditions for the people who work within our factories.
Good corporate citizenship extends across our
entire business so covers a wide range of areas and
includes many specific initiatives.
For example, in terms of vehicle innovations we've
developed new Eco technologies, such as advanced
EcoBoost petrol engines that reduce fuel
consumption and lower CO2 emissions. While our
ECOnetic range of cars are as fuel-efficient as
possible, without compromising the driving
experience.
We’re also committed to the environment, which is
why we source renewable energy wherever possible,
have developed a programme for greener vehicle
distribution and established best practice in both
product sustainability and vehicle recycling.
Of course, people are our greatest asset so human
rights are integral to our overall strategy. And a formal
Code of Basic Working Conditions is the foundation of
our operations around the world.
‘We sure aren't perfect, but we're trying to do the right thing’
It might make us sound a bit like a Miss World contestant, but we want to leave things a little bit better than we find them.
Our first and most important step in creating a sustainable business is to only use 100% natural, healthy renewable ingredients for our drinks – quite simply, we will put nothing into an Innocent Smoothie bottle unless it is made by nature. Of equal importance is that we will only ever make food that is genuinely good for people, each of our products has to have a positive health benefit, and be free of manufacturing shortcuts such as concentrates, flavourings or other weird additives that make food less wholesome.
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Company Evidence that these companies are ethical
The Co-operative
Ford Motor Co
Ted Baker
Innocent
In this topic we will look at in particular how businesses can be ethical in relation to the
environment, recycling & packaging and how they treat their suppliers (Fairtrade) but
there are many other ways a business can ensure it is ethical.
Task 1
Using Google research ‘The top 10 ethical companies in the world’. In your search box key in ‘the world's most ethical companies - Forbes ‘ and should be able to find those companies which follow ‘ethical’ principles.
Let your teacher know your findings and be prepared to share your findings with the class.
Class Discussion Point
Why do you think companies want to be considered ethical? Think of at least 3
reasons.
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One way in which a business can be ethical is caring for the environment. Businesses
can contribute to global warming and the greenhouse effect when their factories
produce air pollution; when they transport raw materials from a long distance and sell
their goods all over the world.
Governments want businesses to reduce their impact on the environment. Some
examples of how they can do this are given below.
Task 2
Access https://climatekids.nasa.gov/
Select ‘or go to the menu’
Read the information contained in
o What is global climate change?'
o What is the greenhouse effect?
o And others you may find interesting
Recycling
Recycling is when a business (or consumer) reuses waste products. For example
Nike have a ‘reuse a shoe campaign’ where consumers are asked to take their
worn out shoes to a Nike store and they will be ground up to make Nike Grind, a
material used to make athletic surfaces such as tennis courts and playgrounds.
Amazon requests customers return broken or unused kindles so they can reuse
the parts in new products.
Reducing their carbon footprint
by buying locally sourced products
Minimising wastage by having
efficient machinery, using good
quality raw materials
Recycling waste in the production
process and using packaging which
encourages customers to recycle
Using renewable energy – you
may have learned about this in
science. Renewable energy
sources such as sun, wind and
waves can be used again and
again. Renewable sources are
either carbon neutral or do not
produce as much greenhouse
gases and so are less harmful to
the environment.
Business Education and Science
Link!
You may have already learned
about these terms in Science!
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Shops such as Marks and Spencer’s offer customers a place to recycle their
clothes and often motivate customers to do so by giving discounts to customers
who do so.
Many businesses use recycle bins within their organisation where waste is
recycled and reused in the production process.
Packaging
Some of the most common household packages – including crisp bags, pizza boxes and
toothpaste tubes – often aren’t recyclable. Packaging can present an environmental
issue if not properly disposed of or collected for reuse.
For companies hoping to attract sustainability-minded customers, this can be a real
problem.
Did you know!
Marks & Spencer offer a ‘shwopping’ scheme
where customers can recycle their old clothes.
That shwopped items are resold or reused to
allow Oxfam to fund all sorts of vital projects
around the world. Since 2008 the M&S and
Oxfam shwopping partnership has collected over
20 million items, worth an estimated £16 million
for Oxfam’s work.
Although the purpose of packaging may be to protect the product from
damage how the product looks may be what attracts the consumers to
purchase the product. For this reason, many companies conduct extensive
research on colour schemes, designs and types of product packaging that is
the most appealing to its intended consumer.
Packaging may also contain ingredients and nutritional information about the
product. This information can help to sell the product because it allows
potential customers to obtain the necessary information they need to make a
purchase decision.
Packaging can also differentiate one brand of product from another brand.
Because the product packaging can contain company names, logos and the
colour scheme of the company, it helps consumers to identify the product as
it sits among the competition’s products on store shelves.
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Task 3
Choose one of the organisations below and using their company website give
examples what they do to show customers that they care about the environment
and recycling.
Access www.recycleforscotland.com to find out more about what you can do to help
the environment by reducing, reusing and recycling.
Task 4
Big brands are engaging with ethical and environmental ideals to create zero-waste
packaging, rethink their manufacturing processes, and reinvent products entirely.
Access https://www.dandad.org/en/d-ad-sustainable-packaging-examples-social-
good/ (or use google – simply key in the question)
Read the article and answer the following questions:
o Original Unverpackt will be Germany’s first zero-waste supermarket. How
will this help the environment?
o What do Viktor & Rolf and Thierry Mugler offer in an attempt to be
environmentally friendly?
o What does ‘Good to Go’ encourage its customers to do that can be seen as
being environmentally friendly?
o Give examples of what how Coca Cola bottles have been upcycled by Oglivy &
Mather China.
Extension Task
Access http://www.coca-colacompany.com/stories/sustainable-packaging-overview
Watch the videos on Coca Cola’s vision for packaging – packaging vision, marine litter,
packaging innovation and recovery and recyclability
After watching the videos write a paragraph (in your jotter) to summarise Coca Cola’s
vision for packaging.
Your teacher will give you headphones
if you need them.
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Social Responsibility
Social Responsibilities are the duties that a business has towards the people who are
affected by it, for example, customers, employees and the local community.
Some examples of companies demonstrating social responsibility are:
Sponsorship of local events ie giving money to the local youth club so it can hold eg a
coffee and cakes morning to raise funds for new equipment such as pool/table
tennis tables for the club
Financial support for education programmes
Financial, food and clothing donations to those in need/charities
Below is an example of social responsibility demonstrated by a company.
A 'good' business is one which is socially responsible and takes ethical decisions and
actions at all times.
This means that a ‘good’ business minimises waste, treats its employees and suppliers
well, respects the environment, and returns some of its profit to the community in
which the sales are made.
There are also many advantages that businesses can gain from being ethical and
socially responsible:
1. It helps them keep high quality employees
2. It attracts good publicity and new customers
3. It attracts ethically-minded investors (more money!)
Working with and for the Community
Coca Cola invest in programmes at all of their sites for the benefit of local communities.
They focus on helping young people achieve their best in two main ways – supporting them through education and encouraging them to take part in physical activity.
Examples of how East Kilbride Coca Cola helps our local area include:
Sponsors of the EK half marathon Operate an education centre in East Kilbride
You can now watch a short video clip showing the impact of
‘Corporate Social Responsibility (CRS)’ on the Water Industry. It is
found in BBC – National 5 Business Management>Understanding
Business>Objectives.
http://www.bbc.co.uk/education/clips/z88k2hv
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Unethical businesses
Business ethics is about doing the ‘right thing’ to satisfy customers need and wants at
all times. Sometimes businesses do not always do the correct thing and can sometimes
be unethical in their decision making.
Examples of behaving in an unethical manner could be:
Using child labour
Not providing your staff with good working conditions such as a clean and safe
working area
Not providing enough hours of work for your
workers to earn enough money to live well or not
provide them with wages when they are off sick.
This can happen when staff are given a “zero-hour
contract” which a lot of people do not think is
ethical
Task 5
1. What do you think happens to businesses when their customers find out they are
unethical?
2. Why is it important that businesses ensure their staff are giving enough hours to
work and good working conditions?
Your teacher may now show you a video about a young girl from Bangladesh who works 12 hour shifts at only 9 years old.
Access the website: http://www.playfair2012.org.uk/game/. This game will let you see the problems faced by underage workers around the world.
A zero-hour contract is a type of
contract between an employer and
a worker, where the employer is
not obliged to provide any minimum
working hours, while the worker is
not obliged to accept any work
offered. In the UK, zero-hour
contracts are controversial.
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Fairtrade is a trading partnership between growers/producers and customers.
Fairtrade does this by providing fair trading conditions and by raising awareness of
the issues.
Class Exercise
Consider what buying Fairtrade
means to people in the UK and
what responsibilities a citizen of
a wealthy country has.
Did you know? The Co-op was the first UK Supermarket to launch an own brand Fairtrade product back in 2000. AND The Co-op sells Fairtrade products in more outlets than any other retailer (over 2,200), and provides over 180 grocery product lines – the widest range of Fairtrade products of any retailer.
Task 6: Think, Pair, Share
You have been sent shopping and
have been told to buy ‘Fairtrade’
bananas and chocolate. What does
this mean to you?
Task 7: Discussion
Do you agree or disagree with the following statements?
‘I am prepared to buy a Fairtrade product even if it is more expensive than a
similar non-Fairtrade product.’
‘In the UK we should only buy Fairtrade products’.
‘People shopping in the UK only care about price, not where their food comes from’.
Write down your answers in your jotter and then be prepared to share with the
class – answer as honestly as possible!
Class Exercise
Your teacher is going to
show you a PowerPoint
called ‘The Banana Split’ as
an introduction to the
topic.
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Task 8
Click on the website www.fairtrade.org.uk > What is Fairtrade?
Answer the following questions in your jotter.
a. What does the Fairtrade Mark mean?
b. What makes Fairtrade different?
c. What is meant by the Fairtrade minimum price?
d. What is meant by a Fairtrade premium?
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Task 10 – Global Awareness
You are going to find information using the
‘Fair Trade Certified Global Awareness layer in Google
Earth’.
Start>All Programs>Core Programs>Google Earth
Go to ‘Layers: Global Awareness’
Go to ‘Fair Trade Certified’
Your teacher will demonstrate how to access this facility.
There you will be able to find, and read information about,
many different Fair Trade co-operatives; from cocoa
farmers in Ghana and the Ivory Coast to coffee farmers
in South America and tea farmers in India.
In your jotter (or Word document) find and write down
information about the following:
2 co-operatives producing Coffee
2 co-operatives producing Cocoa used for making
Chocolate.
2 co-operatives producing Tea
2 co-operatives producing Bananas or Fruit.
You should take your findings from different places in the
world and write down:
a. The name of the co-operative
b. One or two sentences describing the co-operative.
Task 9: Listening
You are now going to watch & listen to:
a. Video called ‘Chocolate makes the world go round’ about how
social enterprises are helping to change the face of business.
(http://www.teachers.tv/videos/46581)
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Fair Trade Today
Fair Trade today is a truly global movement. Over a million small-scale producers and
workers are organised in as many as 3,000 organisations. Their products are sold in
thousands of World-shops or Fair Trade shops, supermarkets and many other sales
points. On top of that, Fair Trade has made mainstream business more aware of its
social and environmental responsibility. In short: Fair Trade is becoming more and more
successful.
How is Scotland doing?
Here is a quote from the Scottish Government:
“We are working towards our goal of making Scotland one of the world’s first Fairtrade
Nations. All six of Scotland’s cities are now Fairtrade cities and 31 towns across the
country are Fairtrade towns. We must keep this momentum going and Fairtrade
Fortnight provides an excellent platform to raise awareness amongst Scots. By
choosing to buy Fairtrade products, everyone can make a contribution”.
“Fair trade is about creating opportunities for producers in the developing world to
receive a fair price for their goods and improve their quality of life. As a responsible
nation, Scotland can help alleviate poverty in the most disadvantaged areas of the
world.”
Task 11
Answer the following questions in your jotter.
1. How many Fairtrade cities are there in Scotland?
2. How can Scots make a contribution towards Fairtrade?
3. What are 2 of the aims of Fairtrade?
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Let’s Look Locally
The East Kilbride Fair Trade Group was set up in 2005 to promote fair trade in our
local community. The group is a collection of local people from who all share a
commitment to the ethos of fair trade. They believe that the actions of consumers
locally can affect the life chances of producers globally.
They have consistently involved schools, churches, businesses and other local
organisations in their ongoing campaign to raise awareness of the Fairtrade mark and
fair trade products. Now there are more outlets than ever before offering fair and
ethical alternatives for local consumers.
Try this at home
Find out what East Kilbride had to do to achieve Fairtrade
status?
Can you name 5 businesses in East Kilbride where Fairtrade
products are sold?
Fairtrade Status
The Fairtrade Foundation is one of the major Fair Trade
organisations in the UK, and uses the Fairtrade mark to show what
products it has certified as fairly traded. Along with products, it also
awards cities, towns, boroughs, schools, & places of worship with
Fairtrade status.
This award is a globally recognised status showing that the group or
area is committed to the principles of fair trade, as is achieved by
meeting goals set by the Fairtrade foundation.
Task 12: Think, Pair Share Can you think of ways in which you can encourage people to buy Fairtrade?
Your Teacher can show you some of
the good films produced by the Fair
Trade Foundation.
ICT Extension Task: Cocoa Farmers
A brilliant site to look at is www.papapaa.com – here you will find some
interactive guides and some great material about cocoa farmers in Ghana.
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Fairtrade Fortnight
Fairtrade Fortnight takes place every year (usually in Feb/March).
Your teacher will let you know when it is happening this year and you
can find out yourself about some of the local events taking place -
perhaps you could even take ‘The Fairtrade Quiz’! Your teacher will
show you some relevant video clips produced by the Fairtrade
Foundation.
www.fairtrade.org.uk/includes/documents/
And finally … let’s discuss!
Now that we know about Fairtrade, what can we do about it?
How can we plan activities to influence others?
How can we make it easier for people to buy and sell Fairtrade products at school,
at home and in the wider community?
Task 13: What have you learned so far about
Fairtrade?
Please make up a quiz with 10 questions you could ask
your classmates to find out what they know about
Fairtrade.
Stir the class: your teacher will give you instructions
as to how you are going to test your classmates.
Skills Task: Research
Now for some work at home!
Your teacher will give you
information on a Research project
which you can work on at home.
Let’s see how well you can complete
the task.
PS: You can get together with some
friends to see if you can make it extra
special!
Remember you can log
onto ‘Glow’.
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We are now going to look at how a well-known company displays many of the ethical
values we have been discussing.
Here is a copy of an interview given by Jerry Greenfield, co-founder of Ben and Jerry’s
ice cream. More businesses are launching plans to become ethical when treating
suppliers and workers. Jerry Greenfield co-founder of the ice cream company Ben and
Jerry’s talks about his company’s ethical policy.
No. We just did it as we thought it was the right thing to do.
Ben and I are not exactly hard core business people. We
wanted to run our business the way a person on the street
would run their business.
It was mostly more expensive as we were making a higher
quality product and simply paying farmers in Vermont who are
our neighbours their cost of production. It was important to
keep them in business.
How does ethical business improve the lives of the workers in such businesses? Do
the workers in Ben and Jerrys’ get higher wages than they would do in other ice
cream firms?
In Vermont we pay what is called a liveable wage. We do studies on
what it actually costs to live where we are and people actually get paid
that wage. We pay that wage as we want people who work a full time job
to be able to buy their groceries and pay their rent. It is simple and it
is fair. The company is making plenty of money, the company is doing
fine and our workers ought to be doing fine as well
When you were doing this 25 odd years ago that would have made your product more
expensive than some of the other massed produced ice cream. You were taking a risk
with the business.
When you set your businesses up in the late 70’s you made a
deliberate decision that you would be ethical that you would
get the milk you use for the ice cream from local farmers
and you would pay the market price or pay more for the
other ingredients that go into it. It wasn’t terribly
fashionable at the time when you made this decision.
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Task 14
Read the interview and answer the following questions in your jotter.
1. Where do they get the milk they use for the ice cream?
2. How much do they pay for nuts and other ingredients?
3. Why did they decide to do this?
4. Why was it important to pay the farmers in Vermont their cost of production?
5. What is a ‘liveable wage’?
6. Why do Ben and Jerry’s pay their workers a ‘liveable wage’?
Benchmark Evidence
In order to achieve Level 3 Business (Business Ethics) you should be able to:
Identify at least two ethical issues related to business practices, for example,
Fairtrade, Credit Unions, food banks, zero hours contracts, recycling and packaging.
Your brief: Prepare a Powerpoint presentation to answer the question - Is Ben &
Jerry’s a socially responsible and ethical company?
Slide 1 – Title and your name
Slide 2 – Brief history of Ben and Jerry’s
Slide 3 – Products made by Ben and Jerry’s
Slide 4 – Is Ben and Jerry’s ethical? – use examples to support your answer.
Slide 5 - Is Ben and Jerry’s socially responsible – use examples to support your
answer.
Slide 6 – One way a business can be ethical is by recycling. Explain how Ben and
Jerry’s ensure they recycle.
Be prepared to share your findings with the class and present your PowerPoint.
Extension: Company websites can be biased – they only tell you what they want to –
after all they are trying to encourage you to buy their products. Can you find out if Ben
& Jerry’s claims are true? Use other websites to ‘back up’ or ‘discredit’ their claims.
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