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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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