Section How are People Influenced at Work Topics: Environmental Issues Social Ethical Issues Legal and Self Regulation Issues Relevant Case Studies Objectives: Understand the impact of pollution, recycling and global warming on businesses Identify relevant codes of practice, stakeholders and pressure groups concerned with business ethics Be able to evaluate ‘Cause related marketing’

What are Business Ethics? ‘’A code of behaviour considered morally correct’’ ‘’Rules or standards governing the conduct of a business’’ ‘’Moral code – what is ‘right’ and what is ‘wrong’?’’ What do businesses use to demonstrate their business ethics? -Aims and objectives -Mission statements -Corporate social responsibility reports (CSR) -Business culture

Environmental Issues Every business is obliged to meet legal requirements designed to protect the environment. Urban blight – excessive development, inappropriate development, use of greenbelt land Waste – land-fill? re-cycling? burning? Energy use – renewable energy, non-renewable resources Global Warming – fact or fiction? Pollution: Noise, Air, Land, Sea, Water

Reasons for business to protect the environment Why would businesses protect the environment?

Environmental Issues – Global Warming International Protocol First agreed change was the Rio Protocol in countries signed up to the agreement to reduce greenhouse gas emissions to 1990 levels by 2000 Kyoto protocol was agreed in Developed countries agreed to lower their emission levels by 5.2% lower than 1990 levels over the period Europe The EU met Kyoto agreements by sharing out their emission targets between member states to reflect national circumstances. The UK agreed to lower current emissions by 12.5%, Germany 21% and Denmark 6%

Social and Ethical Issues Ethics in business and CSR are fast moving up the agenda – 89% of marketing directors believe social issues of the day must be addressed by businesses Reasons for this: Consumers are becoming increasingly restless and can lead to protests, eg. Human rights, global warming, third world debt Consumers are becoming increasingly powerful and vocal which has led to the focus on the way brands operate ethically

Which brands do you as a stakeholder/ consumer perceive to be ethical?

Social and Ethical Issues Legislation is developing to maintain ethical standards – The Turnball Report (1999 for listed companies on stock exchange) and recent pensions act Consumers however have the most power. They have the option to: -Purchase -Boycott -Protest

Social and Ethical Issues – Pressure Groups Pressure groups can affect all types of business and most aspects of their behaviour Usually use the media to demonstrate a company’s unethical behaviour High profile pressure groups are multi-cause and operate internationally Examples: Greenpeace lobbies to restrict business behaviour that might adversely affect the environment Action on Smoking and Health (ASH) oppose the production of tobacco Compassion in World Farming is a UK based group that campaigns to stop animal suffering in intensive farms

Social and Ethical Issues – What can businesses do? Cause Related Marketing – ‘’Who cares wins’’ ‘’ A commercial activity by which businesses and charities or causes form a partnership with each other to market an image, product or service for mutual benefit’’ Benefits: Financial, CSR, Consumer engagement, Health of wider community If price and quality of a product are equal, 81% would switch brands if they were trying to benefit society Cause related marketing appeals to consumers emotional engagement as well as the rational Example – Tesco’s Computers for schools, Ford’s drive towards a cure

Legal and Self Regulation Constraint/ Issues Competition Law Good for businesses and consumers If market shares of less than 25% in EU and 10% in England, rules do not apply Risks of not complying with competition law can be fines (up to 10% of turnover) 2 Forms of anti-competitive behaviour Between business (price fixing, limiting controlling production) Abuse of Market position (Price fixing

Legal and Self Regulation Constraint/ Issues Consumer Protection Relevant acts: - Trade Descriptions Act Prevents retailers or service industry providers from misleading consumers as to what they are spending their money on - Sale of Goods Act Regulates contracts in which goods are bought

Trade Unions ‘’An organization run by and for workers who have banded together to achieve common goals in key areas and working conditions’’ Negotiates labour contracts (wages, work rules, complaint procedures, rules governing hiring, firing and promotion of workers, benefits, workplace safety and policies) Aims to improve working conditions Collective bargaining and strike power

Employment Legislation – In groups identify how these acts affect: i)the business and ii) the employee There are 9 affecting the operations of the Human Resources department: 1.The employment relations bill, The employment rights act, The public interest disclosure act, The health and safety at work act, The national minimum wage act, The equal pay act, The sex discrimination act, The race relations act, The disability discrimination act, 1995

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