Topic Summaries

Ethical considerations in business activity

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GCSE > Business > OCR > GCSE Business Topic Summaries > Business objectives > Ethical considerations in business activity
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Formula sheet

Ethics in business is about doing what is morally right, not just what is legal or profitable.Ethical businesses consider the impact of their actions on workers, customers, communities, and the environment.

  • Ethical businesses will:
    • Avoid exploiting workers or suppliers
    • Refuse to test on animals or use unsustainable materials
    • Pay fair wages and avoid child labour
  • Being ethical can increase brand loyalty, but it may also increase costs.
  • For example, Fairtrade brands pay higher prices to farmers to ensure ethical supply chains.
  • Trade-off between ethics and profit:
Ethical choice Impact on profit
Paying fair wages Higher wage bills may reduce short-term profits
Eco-friendly packaging Sustainable materials may cost more
Avoiding cheap labour Production costs increase without outsourcing to low-cost countries

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