In recent years a significant number of businesses have been accused of being unethical.
CAMBRIDGE
A level and AS level
Year Examined
May/June 2018
Topic
Ethics & Corporate Social Responsibility
👑Complete Model Essay
Introduction
In the contemporary business landscape, ethical considerations have taken center stage, prompting a crucial debate on the role of ethics in managerial decision-making. While some argue that ethical concerns can hinder profitability and competitiveness, this essay posits that senior managers must prioritize ethical considerations in their decisions to ensure long-term sustainability and stakeholder trust. This essay will delve into the multifaceted aspects of ethical decision-making, exploring its potential costs and benefits, the growing scrutiny on businesses, and the crucial role of senior managers in shaping ethical business practices.
The Importance of Ethical Decision-Making
Ethical decision-making involves aligning business decisions with moral principles, ensuring fair treatment of employees, customers, suppliers, and the environment. While some businesses might perceive ethical considerations as constraints on profit maximization, neglecting them can have detrimental consequences. In an era of heightened transparency and social media, unethical practices can lead to reputational damage, consumer boycotts, and legal repercussions. For instance, the emissions scandal involving Volkswagen, where the company was found to have cheated on emissions tests, severely tarnished its reputation and resulted in billions of dollars in fines and legal settlements (BBC News, 2015).
The Role of Senior Managers in Fostering Ethical Conduct
Senior managers play a pivotal role in shaping the ethical climate within organizations. Their decisions have a cascading effect on employees and business practices. Leaders who prioritize ethical conduct set a positive example, fostering a culture of integrity and accountability. Conversely, unethical behavior at the top can permeate through the organization, creating a toxic work environment and encouraging unethical practices. The Enron scandal, where senior executives engaged in accounting fraud and misled investors, exemplifies the devastating consequences of unethical leadership (The Guardian, 2002).
Balancing Profitability with Ethical Responsibility
While ethical decisions might appear to increase costs in the short term, they often lead to long-term benefits, including enhanced brand reputation, customer loyalty, and employee morale. Consumers are increasingly conscious of ethical sourcing, environmental sustainability, and fair labor practices. Businesses that align with these values are likely to attract and retain customers, gaining a competitive advantage. Moreover, ethical practices can reduce risks associated with legal sanctions, fines, and reputational damage.
The Influence of External Factors and Stakeholder Pressure
The extent to which senior managers prioritize ethical considerations can be influenced by external factors and stakeholder pressure. Advocacy groups, non-governmental organizations, and media outlets play a crucial role in holding businesses accountable for their actions. Consumers have become more empowered and vocal, leveraging social media to express their concerns and boycott businesses perceived as unethical. For instance, companies involved in unsustainable palm oil production have faced significant pressure from environmental groups and consumers, leading to changes in their sourcing practices (Greenpeace, 2018).
Conclusion
In conclusion, while ethical decision-making might present short-term challenges, it is essential for the long-term sustainability and success of businesses. Senior managers have a moral imperative to prioritize ethical considerations, fostering a culture of integrity and responsibility. By aligning business practices with ethical values, organizations can build trust with stakeholders, enhance their reputation, and gain a competitive advantage in the marketplace. Ultimately, ethical decision-making is not just a moral obligation but also a sound business strategy.
In recent years a significant number of businesses have been accused of being unethical.
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Writing an A-Level Business Studies Essay on Ethical Decision-Making
This guide will help you write a successful A-Level Business Studies essay on the question: "In recent years, a significant number of businesses have been accused of being unethical. Discuss whether senior managers should consider ethics when making business decisions."
Understanding the Essay Question
The question asks you to explore the importance of ethical considerations in business decision-making. You need to argue whether or not senior managers should prioritize ethics, even if it means potentially limiting profits or facing challenges. To do this effectively, you should:
- Define ethical decision-making and its relevance to business.
- Analyze the potential consequences of ethical and unethical decisions.
- Examine the factors that influence senior managers' ethical choices.
- Evaluate the arguments for and against considering ethics in decision-making.
Key Concepts
Here are some key concepts to incorporate into your essay:
Ethical Decision-Making
- Definition: Decisions made with a focus on moral principles and values, considering the impact on stakeholders (employees, customers, suppliers, environment, etc.).
- Examples: Fair wages, sustainable practices, ethical sourcing, honest advertising.
Stakeholder Pressure
- Pressure Groups: Organizations that advocate for ethical behavior and can exert significant pressure on businesses through campaigns, boycotts, and media attention.
- Government Regulations: Laws and policies promoting ethical practices, which businesses must comply with to avoid penalties.
- Consumers: Increasingly aware of ethical issues and willing to support businesses that demonstrate strong ethical values.
Consequences of Ethical and Unethical Decisions
- Ethical Decisions: Positive brand image, increased customer loyalty, improved employee morale, enhanced reputation, greater investment.
- Unethical Decisions: Reputational damage, legal penalties, loss of customers and employees, boycotts, fines.
Factors Influencing Ethical Decision-Making
- Senior Manager Values: Personal beliefs and moral compass shape their decision-making process.
- Business Culture: The company's values and norms influence ethical behavior among employees.
- Stakeholder Expectations: Different stakeholders have varying expectations regarding ethical behavior.
- Competitive Advantage: Ethical practices can differentiate a business in the market and attract customers.
Tips for Writing the Essay
Here are some tips to ensure your essay is strong and well-structured:
Planning and Structure
- Introduction: Define ethical decision-making and outline the arguments you will explore.
- Main Body:
- Paragraph 1: Discuss the arguments for considering ethics in decision-making, including stakeholder pressure, reputational benefits, and competitive advantage.
- Paragraph 2: Explore the arguments against considering ethics, such as potential cost increases, limitations on business activities, and conflicting stakeholder interests.
- Paragraph 3: Analyze the factors influencing senior managers' ethical choices, such as personal values, business culture, and stakeholder expectations.
- Conclusion: Summarize the main arguments and state your overall stance on whether senior managers should prioritize ethics. Provide a balanced conclusion, acknowledging the complexities of ethical decision-making.
Content and Analysis
- Use Examples: Provide real-world examples of businesses that have been praised or criticized for their ethical practices. This will illustrate your points and make your essay more engaging.
- Apply Theoretical Concepts: Link your arguments to relevant business theories, such as stakeholder theory, agency theory, and corporate social responsibility.
- Show Evaluation: Demonstrate critical thinking by examining the strengths and weaknesses of different arguments. Ask questions like, "Does the need to avoid penalties outweigh the potential benefits of ethical behavior?"
- Balance Arguments: Present both sides of the argument fairly, even if you have a strong opinion. This demonstrates a thorough understanding of the topic.
Presentation and Style
- Clear and Concise Language: Use precise language and avoid jargon. Write in a neutral, objective tone.
- Proper Structure: Use clear paragraphs with topic sentences and supporting evidence.
- Proofread Carefully: Eliminate any grammatical errors or typos.
Remember
This essay is not about picking a side. The goal is to demonstrate a comprehensive understanding of the ethical considerations involved in business decision-making, while showcasing your critical thinking and analytical skills.
Extracts from Mark Schemes
In recent years a significant number of businesses have been accused of being unethical. Discuss whether senior managers should consider ethics when making business decisions. [20]
Answers may include the following:
- Ethical decision-making – decisions taken with a reference point of morality – the ‘right’ (rather than ‘wrong’) decisions in relation to employees, customers, suppliers, the environment.
- Ethical decisions may increase costs and limit business activities.
- There is increasing scrutiny of business behaviour and activities by outside agencies/pressure groups.
- Senior managers likely to take decisions that can have a significant impact on others (examples – exploitation, bribery, child labour).
- Senior managers becoming more aware of consequences of unethical decisions – reputational damage (examples).
- Senior managers may see a competitive advantage in being ethical and stakeholders may have a greater expectation of ethical behaviour.
- Its importance may depend on a number of factors:
- Extent of stakeholder pressure.
- Values of senior managers and/or owners.
- What are other businesses doing?
- Senior managers may make a risk assessment of ethical / unethical decisions and will need to take account of external factors and the unique situations experienced.
Answers might demonstrate evaluation by asking questions such as:
- Does the need to avoid pressure group activity / government action (taxes and grants) put pressure on the senior manager?
Also answers may propose that internal concerns about reputation and brand image suggest that the extra short term costs of becoming more ethical can be outweighed by the likelihood of future long term benefits.
20 9609/12 Cambridge International AS/A Level – Mark Scheme PUBLISHED May/June 2018 © UCLES 2018 Page 11 of 12
Question Answer Marks 6
Please note that an answer may not specifically mention the term senior managers but may well refer to important business decisions such as relocation, changing suppliers, CSR, supply chains, code of conduct, brand reputation, purchase of fixed assets, production/output, HRM decision such as the difficulty /ease of attracting employees to the business. These need to be credited within Levels 3, 4 and 5.