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Chapter 20

What are Business Ethics?

Edexcel 2BS01 Business Studies GCSE Unit 3.5
Ideas about what is morally correct t, applied in a business situation.  Many large businesses want to show they are ethically responsible on a range of issues from production to suppliers, employees, customers, competitors, their product, the environment and local communities

Chapter 20

Why are moral issues that affect a business organisation often complex?

Edexcel 2BS01 Business Studies GCSE Unit 3.5
Because the stakeholders may not all agree on the morals they should follow

Chapter 20

What are the possible trade-offs between ethics and profit?

Edexcel 2BS01 Business Studies GCSE Unit 3.5
A business may not always be able to follow it’s ideal ethical philosophy as quite often ethics will increase costs for the business

Chapter 20

What are Pressure groups?

Edexcel 2BS01 Business Studies GCSE Unit 3.5
Organisations that support causes such as workers’ rights, the environment, animal welfare and world poverty e.g. trade unions, Greenpeace, RSPCA and Oxfam

Chapter 20

How can a business respond to a pressure group?

Edexcel 2BS01 Business Studies GCSE Unit 3.5
Businesses can act in several ways when it comes to pressure groups.
  • They can ignore them
  • work against them
  • work with them

Chapter 20

What is Fair Trade?

Edexcel 2BS01 Business Studies GCSE Unit 3.5
It promotes the use of products that meet internationally agreed fair trade standards

Chapter 20

What are the reasons why a business can charge higher prices for products which are produced in a more ethically responsible way?

Edexcel 2BS01 Business Studies GCSE Unit 3.5
  • customers may feel that the extra money is worth it to ensure the workers get a fair wage
  • customers may feel that they are doing something for the environment
  • customers may feel that the extra money that the producers get allows them to be more competitive

Chapter 20

For a large business, what are the two advantages that means they can be both ethically responsible and profitable? Edexcel 2BS01 Business Studies GCSE Unit 3.5
  • If they are a large business they can benefit from economies of scale in order to offset the extra costs
  • If they are a large company with a big brand image and so a good marketing campaign can maintain or increase their sales

Chapter 20

Say why it is ethical for a business to promote themselves as a healthy product, when, in comparison to its competitors, it’s not. Edexcel 2BS01 Business Studies GCSE Unit 3.5
  • there are no laws preventing them from advertising it
  • consumers can make up their own minds by reading the information on the label / about the product

Chapter 20

Say why it is NOT ethical for a business to promote themselves as a healthy product, when, in comparison to its competitors, it’s not. Edexcel 2BS01 Business Studies GCSE Unit 3.5
  • they should not suggest that it is healthy when it is not when it is compared to other drinks available on the market
  • it seems that they are trying to make a profit by misleading consumers

Chapter 20

What are the benefits to a business of being an ethical business? Edexcel 2BS01 Business Studies GCSE Unit 3.5
  • better branding
  • that it allows them to add value
  • that is gives them a unique selling point (USP)

Chapter 20

What are the disadvantages to a business of being an ethical business? Edexcel 2BS01 Business Studies GCSE Unit 3.5
  • higher costs
  • consumers may not be willing to pay extra
  • they may find that they are no longer competitive

Chapter 20

What are the ways in which a business might become more ethical? Edexcel 2BS01 Business Studies GCSE Unit 3.5
  • Paying workers higher wages
  • Improved working conditions
  • Reducing pollution
  • Buying Fairtrade supplies
  • Donations to the community
  • Reducing packaging

Chapter 20

What are the drawbacks a business could face as a result of pressure group activity? Edexcel 2BS01 Business Studies GCSE Unit 3.5
  • Damage to brand
  • Increased costs
  • Forced to change decision making
Chapter 21

Which of the following is an environmental problem resulting from the activities of a business? Select one answer. □ A lower profit □ B higher costs □ C pollution □ D poor communication Edexcel 2BS01 Business Studies GCSE Unit 3.5
C

Chapter 21

What is the Supply chain? Edexcel 2BS01 Business Studies GCSE Unit 3.5
The processes that are involved in the route taken by a product from the raw materials needed to create it right through to the final customer.

Chapter 21

What are the ways that the Supply chain can impact on the environment? Edexcel 2BS01 Business Studies GCSE Unit 3.5
Things that must be considered are traffic congestion, air, noise, smell and water pollution, climate change, waste and resource depletion

Chapter 21

What are short-term effects? Edexcel 2BS01 Business Studies GCSE Unit 3.5
Short-term effects occur on a day-to-day basis such as traffic congestion and pollution of the air or water.

Chapter 21

What are long-term effects? Edexcel 2BS01 Business Studies GCSE Unit 3.5
Long-term effects are things that need addressing now otherwise they will cause significant damage in the future such as climate change and resource depletion.

Chapter 21

What are Non-renewable resources? Edexcel 2BS01 Business Studies GCSE Unit 3.5
Non-renewable resources are those that cannot be replaced once used such as oil, gas and coal

Chapter 21

What are renewable resources? Edexcel 2BS01 Business Studies GCSE Unit 3.5
Renewable resources are those in abundance and can be replaced or reused easily, such as wind or tidal power

Chapter 21

How are businesses responsible for recycling? Edexcel 2BS01 Business Studies GCSE Unit 3.5
Recycling is a positive step in reducing the impact on the environment but can be expensive and time consuming. Customers are putting pressure on businesses to become more environmentally aware. Environmental issues can be seen as a business opportunity for some companies.

Chapter 22

What are Developed countries? Edexcel 2BS01 Business Studies GCSE Unit 3.5
Countries with a relatively high income per person (per person includes everyone in the country from babies to people aged 100+) Businesses in developed countries often sell high priced, high quality products to developing countries.

Chapter 22

What are Developing countries? Edexcel 2BS01 Business Studies GCSE Unit 3.5
Countries with a lower income per person than developed countries (per person includes everyone in the country from babies to people aged 100+). Businesses often take advantage of low wages in developing nations by relocating or outsourcing work. Many products made in developing nations lack high levels of quality or technological advances and do not sell well in developed countries. Businesses in developing countries often sell lower quality, less technologically advanced but cheaper products to developed countries.

Chapter 22

What are Exports? Edexcel 2BS01 Business Studies GCSE Unit 3.5
An export is the sale of a good or service to a foreign buyer (a customer in another country) that leads to a flow of money into the UK.  The foreign buyer will have to change their currency into pounds to complete the purchase

Chapter 22

What are Export subsidies? Edexcel 2BS01 Business Studies GCSE Unit 3.5
Measures that reduce the price of goods sold abroad.  Export subsidies are amounts of money a government might give firms that export products which helps to reduce the cost of production and potentially lower the selling price to the overseas consumer.

Chapter 22

What are Imports? Edexcel 2BS01 Business Studies GCSE Unit 3.5
An import is the purchase of a good or service from a foreign business (a customer in another country) that leads to a flow of money out of the UK.  The UK buyer will have to change pounds into the seller’s currency to make the transaction.  High income countries spend more on imports than low income countries Import protection is designed to reduce imports being bought from abroad. It uses measures such as tariffs and quotas.

Chapter 22

What are Protectionist policies? Edexcel 2BS01 Business Studies GCSE Unit 3.5
Measures designed to reduce foreign products coming into a country but give an advantage to domestic firms to sell products at home or export products

Chapter 22

What are Quotas? Edexcel 2BS01 Business Studies GCSE Unit 3.5
Limits on the physical number of goods that can be imported over a period.  This is decided by the European Union, and there are no tariffs or quotas between EU members

Chapter 22

What are Tariffs or customs duties? Edexcel 2BS01 Business Studies GCSE Unit 3.5
Taxes put on goods imported into a country which make them more expensive for buyers.  These are methods of import protection.  This is decided by the European Union, and there are no tariffs or quotas between EU members

Chapter 23

How many members of the Eurpoena Union (EU) are there? Edexcel 2BS01 Business Studies GCSE Unit 3.5
Set up in 1957, there are currently 27 (as at 2009) countries in the EU

Chapter 23

The EU now makes some of the laws for the UK.  True or False? Edexcel 2BS01 Business Studies GCSE Unit 3.5
True,  Being part of the EU means that some decisions that were made at national level (UK) are now made at EU level, with safety or tariffs as examples

Chapter 23

What is the main aim of the EU? Edexcel 2BS01 Business Studies GCSE Unit 3.5
The EU has helped to create a single market with goods traded freely across national borders or member countries. Reducing barriers helps to create a more competitive market. Many members of the EU have a common currency, the euro, but not all do.

Chapter 23

What are Health and Safety regulations? Edexcel 2BS01 Business Studies GCSE Unit 3.5
All countries in the EU have them in place and they are designed to prevent workers from having accidents or falling ill due to their work.  When related to the working environment, it covers such things as how long employees have to work without taking a break, protective equipment and the level of heating in the workplace

Chapter 23

What is Maternity leave? Edexcel 2BS01 Business Studies GCSE Unit 3.5
Maternity rights are those legal rights a female has before, during and after pregnancy. Currently all expectant mums can take 14 weeks off from work to have a baby.  This is paid.  This is set by the EU. Some European countries have far more comprehensive and generous maternity rights than others. In the UK employers, by law, must keep a female’s job open to her if she chooses to come back after maternity leave. This can prove disruptive to many firms.

Chapter 23

What is the Minimum wage? Edexcel 2BS01 Business Studies GCSE Unit 3.5
The lowest payment per hour, day or week that can be paid to a worker for their work.  Most countries in the EU have one, but the level in not set by the EU, but by each government as it tends to reflect the average wage levels in each country, in the UK the minimum wage is currently (as at April 2013): Year 21 and over 18 to 20 Under 18 Apprentice* 2012 (current rate) £6.19 £4.98 £3.68 £2.65 2011 £6.08 £4.98 £3.68 £2.60 2010 £5.93 £4.92 £3.64 £2.50 *This rate is for apprentices under 19 or those in their first year. If you’re 19 or over and past your first year you get the rate that applies to your age. The age groups were different before 2010. There were no National Minimum Wage rates for apprentices.

Chapter 23

What is Paternity leave? Edexcel 2BS01 Business Studies GCSE Unit 3.5
Paternity rights are those available for new fathers. The EU does not yet have their own policy, but the UK does allow up to two weeks leave (as at July 2010). Some European countries have far more comprehensive and generous paternity rights than others.
Chapter 23

What is Regulation? Edexcel 2BS01 Business Studies GCSE Unit 3.5
These are designed to protect different stakeholder groups in a business.  They are set by the government.  An example is car insurance.  This protects everyone involved in a crash to make sure those not responsible are compensated

Chapter 23

What is Taxation? Edexcel 2BS01 Business Studies GCSE Unit 3.5
This is the money that businesses and individuals have to give the government.  This is still set by individual countries Tax rates are still set by national (UK) governments. There are a whole host of different taxes in the UK, such as: Income Tax; Corporation Tax; Value Added Tax; National Insurance Contribution; and Excise Duty. Tax levels are often a determining factor of location for businesses operations.

Chapter 23

Which of the following best describes the term Minimum Wage? Select one answer. □ A A fixed payment per year but paid monthly □ B A payment made to employees for working extra hours □ C The lowest amount a business can legally pay its employees □ D A payment to an employee for reaching a sales target Edexcel 2BS01 Business Studies GCSE Unit 3.5
C

Chapter 23

What are the effects that the provision of maternity rights might have on a business? Edexcel 2BS01 Business Studies GCSE Unit 3.5
  • Better motivation amongst female staff
  • Need to employ temporary workers
  • Increased costs
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