Business ethics & corporate social responsibility

Which is not an example of ethical behaviour for a restaurant?

A Donating left-over food to charity

B Employing young children as waiters

C Ensuring ingredient suppliers are paid on time

D Paying the chef more than the average wage

Text 1

_{Adapted from www.drmartensplc.com/sustainability/ and www.drmartensplc.com/sustainability/product/. Item removed due to third party copyright restrictions.}Dr Martens plc

In 2023 DM’s accounts showed the data below.

Fig. 1 Selected financial data for Dr Martens plc 2023

State two production processes.

State two reasons why a business may aim to be environmentally friendly.

Calculate DM’s net profit margin for 2023 to two decimal places.

Show your workings.

........ %

Analyse one reason for DM of using the financial data in Fig. 1 to make decisions about how to meet its sustainability objectives.

Explain one way climate change may affect a business.

Analyse one disadvantage for DM of changing the supply chain for leather to meet its sustainability objectives.

Analyse one advantage for DM of changing its packaging to meet its sustainability objectives.

Recommend which of the two sustainability objectives (the supply of leather or the change in packaging) DM should prioritise.

Text 3

Primark Ltd

Primark Ltd is a fashion retailer that sells clothing and homeware at prices lower than most other retailers. The company is aware of the importance of consumer law and of having low-cost suppliers.

Primark Ltd started to sell its products online in 2022. After changes in buying habits and pressure from customers, in 2022 Primark Ltd launched an online click and collect service for shoppers.

Primark Ltd is very aware of the need to have ethical suppliers. The following ethical factors are among those important to Primark Ltd:

• giving clothes a longer life by using material from sustainable sources

• encouraging its supply chain to pay a living wage and look after the health and well-being of their workers.

Identify one factor which can affect the quality of a business’ products.

Analyse one impact of consumer law on Primark Ltd.

Analyse one benefit for Primark Ltd of having low-cost suppliers.

Analyse one advantage and one disadvantage to Primark Ltd of offering an online click and collect service for shoppers.

Recommend whether Primark Ltd should continue to offer an online click and collect service for shoppers.

(e*) Evaluate whether Primark Ltd’s use of ethical suppliers comes into conflict with its shareholders’ objectives.

A health centre wishes to improve its environmental sustainability.

Which of the following would help achieve this?

A Asking doctors to wash their hands more frequently

B Encouraging nurses to go out walking during their lunch break

C Giving out free fruit to health centre staff and patients

D Installing sensors to switch off lights when not needed

Text 2

AstraZeneca plc

AstraZeneca plc (AZ) is a multinational pharmaceutical company that operates in over 100 countries around the world. AZ develops treatments for a range of diseases. It sells its medicines and vaccines worldwide. Its headquarters are in Cambridge, England. In 2021 AZ’s sales revenue was £37 417m, from which it made £24 980m gross profit.

AZ has a code of ethics, which is at the centre of everything that it does. The company has approximately 75 000 employees worldwide; 10 000 of these work in its three research and development centres.

AZ uses technology throughout its operations to provide high quality products for its customers. These customers include doctors, hospitals and governments from around the globe.

In the UK, AZ has changed the way it sells its products. Previously, sales staff would visit medical professionals; now it uses a call centre and website where medical professionals can order products and samples. AZ says this means it can now provide a high quality service that meets the needs of its customers at a lower cost.

Identify two ethical considerations a business may have.

State two reasons why quality in the production of goods is important to a business.

Analyse one reason why it is important to AZ that its call centre employees have good product knowledge.

Calculate AZ’s gross profit margin for 2021.

Show your workings

Answer........

Explain one way technology might affect production at AZ.

Analyse one advantage and one disadvantage to AZ of operating as a multinational company.

Recommend whether AZ should continue to operate as a multinational company.

Identify two possible advantages to a business of being environmentally friendly.

Explain one way climate change might affect business activity.

Analyse how BP’s finance function may influence its ability to meet BP’s objectives.

Calculate the percentage change in BP’s revenue between 2017 and 2019.

Show your workings

Answer........ %

Identify two factors that can affect a company’s revenue.

Identify two reasons why a UK business might choose to locate in another country.

Evaluate how globalisation has influenced where BP locates its businesses.

Text 2 Quality Textiles (QT)

Quality Textiles Ltd (QT) is a medium-sized, established business that manufactures clothes from its factory in Birmingham. Its clothes are sold to retail shops around the country. A summary of its profitability is shown in Table 1.

QT wants to expand the business by using a bank loan to buy a large van to help with deliveries. It will use average rate of return (ARR) to assess which model of van it will buy. Further information is provided in Table 2, below. The new van will mean employing a driver, in addition to the five drivers already working for the business.

QT’s cash flow forecast suggests it may struggle to pay the monthly van loan repayment. QT’s closing bank balance for the last five months is shown in Fig. 1.

QT had problems earlier in the year. It found its way into the local newspaper as part of an investigation into ethical practices in its business activities and supply chain.

Identify one method of selling products to customers.

Identify two ethical considerations for a business.

Explain one reason why a business should act ethically.

Calculate the average rate of return (ARR) for the Standard Van by using the information in Table 2.

Show your workings

Answer........ %

Analyse one reason why QT should buy the Standard Van. Refer to Table 2 in your answer.

Analyse QT’s cash position considering its current expansion plans.

Analyse QT’s profit position considering its current expansion plans.

Recommend whether QT’s cash position or profit position will have the biggest impact on its expansion plans.

A business wishes to be known as an ethical employer.

Which of the following is not an example of ethical treatment of the workforce?

A Allowing flexible working

B Paying high wages

C Providing good working conditions

D Using robotics

Identify two factors that have led to increased globalisation.

Explain one possible advantage to a business of operating as a multinational.

Calculate, using the figures shown in Fig. 1, the number of Barclays plc’s UK personal banking customers who are likely to have used online banking in 2020.

Show your workings.

Answer........

Identify two impacts that e-commerce might have on business activity.

Analyse one way Barclays plc could treat its customers ethically.

Identify two factors that may influence whether a business invests in new computer technology.

Evaluate possible impacts on Barclays plc of investing in computer technology to provide

online banking services to its customers.

Text 3 Pukka Pies Ltd

Pukka Pies Ltd is a family-owned business with approximately 360 employees. It makes a range of high-quality savoury pies, including steak, chicken and mushroom, and chicken balti, in batches at its factory in Leicester, England. Pukka Pies are sold in more than 4000 food stores nationwide as well as in sports stadiums, fish and chip shops and cafés across the country.

Three of Pukka Pies Ltd’s key values are recruiting people who are ambitious, delighting customers with quality pies, and building trust with suppliers through food safety. Each of these values helps the business meet the requirements of consumer law.

The success of Pukka Pies Ltd is affected by many factors, including its logistical and supply chain decisions. Pukka Pies Ltd procures the ingredients for its pies from businesses across the UK and overseas; consequently its supply chain is long. Nevertheless, all of these ingredients need to arrive in good condition and, therefore, its logistics are time-critical. Unemployment levels also have a significant impact on Pukka Pies Ltd.

Pukka Pies Ltd considers its environmental impact across all aspects of business activity. It has already replaced some of the non-recyclable plastics used in its packaging with alternatives that can be recycled. In addition, none of the company’s waste goes to landfill.

Identify one way consumer law protects consumers.

Analyse the benefits to Pukka Pies Ltd of using a batch production process.

Analyse one way falling unemployment might influence recruitment at Pukka Pies Ltd.

Analyse the impact of each of the following on Pukka Pies Ltd:

the length of its supply chain........

the time-critical nature of its logistics........

Recommend whether the length of its supply chain or the time critical nature of its logistics has the greater impact on Pukka Pies Ltd’s success.

* Evaluate how Pukka Pies Ltd’s environmental considerations might influence its marketing

mix.