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They consider what is morally right or wrong, which may go beyond legal requirements or profit objectives."},{"text":"legally required or prohibited","correct":false,"explanation":"This confuses ethics with law. Ethical issues concern what is morally right or wrong, even when an action is legal and could make a profit."},{"text":"financially successful or unsuccessful","correct":false,"explanation":"This focuses on commercial performance rather than ethics. The relevant judgement is whether conduct is morally right or wrong, not whether it generates profit."},{"text":"operationally efficient or inefficient","correct":false,"explanation":"Efficiency measures how well resources are used, not whether conduct is ethical. An ethical issue concerns what is morally right or wrong."}]},{"id":"c7cc62df-0374-46c6-97f2-2cff7ec7da47","cardType":"cloze","points":null,"front":"A stakeholder is any individual or group [ ] or able to affect a business.","back":"A stakeholder is any individual or group affected by or able to affect a business.","mcqOptions":[{"text":"affected by","correct":true,"explanation":"Stakeholders have an interest in a business because they are affected by its decisions or can affect its activities, performance and objectives."},{"text":"employed by","correct":false,"explanation":"This limits stakeholders to employees and overlooks customers, suppliers, shareholders and local communities. A stakeholder is anyone affected by, or able to affect, the business."},{"text":"financially linked to","correct":false,"explanation":"A financial connection is not necessary for stakeholder status; local communities may be affected without one. The definition covers any individual or group affected by the business."},{"text":"in competition with","correct":false,"explanation":"Competitors are only one possible group connected to a business. Stakeholders are defined more broadly as those affected by, or able to affect, it."}]},{"id":"deacfd7b-0ada-4d11-ba36-7c237979c064","cardType":"basic","points":1,"front":"Beyond profit, what should ethical business decisions be judged by?","back":"Their impact on stakeholders.","mcqOptions":[{"text":"Their impact on stakeholders.","correct":true,"explanation":"Ethical decision-making considers how business actions affect stakeholders such as employees, customers, suppliers, communities and the environment, rather than judging decisions solely by profit."},{"text":"Their short-term return to shareholders.","correct":false,"explanation":"Shareholder returns are a financial measure and represent only one stakeholder group. Ethical decisions should instead be judged by their impact on stakeholders more broadly."},{"text":"Their compliance with minimum legal standards.","correct":false,"explanation":"Legal compliance sets a minimum requirement, but ethical responsibilities can go further. Decisions should be judged by their impact on stakeholders, not legality alone."},{"text":"Their effect on quarterly sales revenue.","correct":false,"explanation":"Sales revenue measures commercial performance rather than ethical consequences. Beyond profit, decisions should be assessed according to their impact on all relevant stakeholders."}]},{"id":"fbe36c20-243c-44a4-b49d-e23b4513d187","cardType":"cloze","points":null,"front":"CSR means a business taking responsibility for its impact on [ ].","back":"CSR means a business taking responsibility for its impact on society and the environment.","mcqOptions":[{"text":"society and the environment","correct":true,"explanation":"Corporate social responsibility means accepting responsibility for the wider social and environmental consequences of business activities, rather than focusing solely on financial performance."},{"text":"shareholders and directors","correct":false,"explanation":"This focuses narrowly on internal financial interests. CSR concerns the business’s wider impact on society and the environment, including effects on communities and natural resources."},{"text":"sales and market share","correct":false,"explanation":"Sales and market share are measures of commercial performance, not the focus of CSR. CSR addresses a business’s impact on society and the environment."},{"text":"costs and profitability","correct":false,"explanation":"Costs and profitability are financial concerns rather than the definition of CSR. CSR involves taking responsibility for effects on society and the environment."}]},{"id":"8de76bd5-eda0-4a31-ae9a-636484e14102","cardType":"basic","points":3,"front":"What are the three parts of the Triple Bottom Line?","back":"

People
Planet
Profit

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People
Planet
Profit

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People
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Publicity
Planet
Profit

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People
Planet
Performance

","correct":false,"explanation":"Performance is too broad and does not identify the economic component. The established Triple Bottom Line is People, Planet and Profit."}]},{"id":"85592885-e272-4a5a-857f-05871989579d","cardType":"basic","points":2,"front":"Why can ethical behaviour increase costs?","back":"Higher wages or sustainable materials raise business costs.","mcqOptions":[{"text":"Higher wages or sustainable materials raise business costs.","correct":true,"explanation":"Paying fairer wages or purchasing responsibly sourced materials can increase expenditure because these ethical inputs are often more expensive than less responsible alternatives."},{"text":"Lower staff turnover or reduced waste raise business costs.","correct":false,"explanation":"Lower turnover and reduced waste normally decrease recruitment, training and material costs. Ethical behaviour can increase costs through higher wages or more expensive sustainable materials."},{"text":"Premium prices or stronger demand raise business costs.","correct":false,"explanation":"Premium prices and stronger demand mainly increase revenue rather than directly causing ethical costs. Higher wages or sustainable materials are the relevant sources of increased expenditure."},{"text":"Tax incentives or government grants raise business costs.","correct":false,"explanation":"Incentives and grants provide financial support and usually reduce net costs. Ethical behaviour may instead increase costs through higher wages or sustainably sourced materials."}]},{"id":"b01d0a62-e8ea-41ee-9a16-f58a81ff800f","cardType":"basic","points":2,"front":"How can ethical behaviour increase revenue over time?","back":"Customers may become more loyal to businesses they trust.","mcqOptions":[{"text":"Customers may become more loyal to businesses they trust.","correct":true,"explanation":"Trust can encourage repeat purchases and reduce customer switching. Greater loyalty therefore supports sales over time and can increase the business’s long-term revenue."},{"text":"Customers may become more price-sensitive to businesses they trust.","correct":false,"explanation":"Greater price sensitivity makes customers more likely to switch when prices rise, so it does not explain higher revenue. Ethical trust can instead build customer loyalty."},{"text":"Suppliers may offer more discounts to businesses they trust.","correct":false,"explanation":"Supplier discounts reduce purchasing costs and may increase profit, but they do not directly increase revenue. Revenue can rise when customer trust creates greater loyalty."},{"text":"Regulators may impose fewer fines on businesses they trust.","correct":false,"explanation":"Avoiding fines reduces costs rather than increasing sales revenue. Ethical behaviour can raise revenue over time by creating trust and stronger customer loyalty."}]},{"id":"7f6bf950-9009-4043-a37b-613296fc6172","cardType":"cloze","points":null,"front":"A pay gap is the difference in [ ] between different groups of employees.","back":"A pay gap is the difference in average pay between different groups of employees.","mcqOptions":[{"text":"average pay","correct":true,"explanation":"A pay gap compares the average earnings of different employee groups, such as the gender pay gap, rather than comparing selected individuals’ salaries."},{"text":"individual salaries","correct":false,"explanation":"Comparing individual salaries does not establish a group-level pay gap because roles and circumstances may differ. The measure compares average pay between employee groups."},{"text":"total payroll","correct":false,"explanation":"Total payroll is strongly affected by the number of employees in each group. A pay gap instead compares average pay, allowing meaningful comparison between groups of different sizes."},{"text":"minimum pay","correct":false,"explanation":"Minimum pay only identifies the lowest wage in each group and may not represent typical earnings. A pay gap compares the groups’ average pay."}]},{"id":"bc961e66-2a17-4669-bc3a-8fa38e31419c","cardType":"basic","points":2,"front":"Why can a large executive-shop-floor pay gap reduce motivation?","back":"Workers may feel undervalued and unfairly rewarded.","mcqOptions":[{"text":"Workers may feel undervalued and unfairly rewarded.","correct":true,"explanation":"A large pay disparity can create a sense of organisational injustice. Shop-floor workers may believe their contribution is undervalued, reducing morale, effort and commitment."},{"text":"Workers may feel more secure and fairly rewarded.","correct":false,"explanation":"Executive pay does not directly improve the job security or perceived rewards of shop-floor employees. The large gap instead risks making workers feel undervalued and unfairly rewarded."},{"text":"Workers may feel overqualified and insufficiently trained.","correct":false,"explanation":"A pay gap concerns perceived fairness rather than workers’ qualifications or training. Motivation may fall because employees feel undervalued and believe rewards are distributed unfairly."},{"text":"Workers may feel more productive and highly respected.","correct":false,"explanation":"A large disparity does not automatically raise productivity or communicate respect. It can signal that shop-floor contributions are undervalued, creating perceived unfairness and reducing motivation."}]},{"id":"1e0acaec-e174-458f-8b26-a566936d5c56","cardType":"basic","points":2,"front":"Why can poor working conditions create long-term costs?","back":"They can increase stress, absenteeism and labour turnover.","mcqOptions":[{"text":"They can increase stress, absenteeism and labour turnover.","correct":true,"explanation":"Unsafe, uncomfortable or demanding conditions can damage employee wellbeing. This raises stress-related absence and encourages workers to leave, creating recurring recruitment, training and disruption costs."},{"text":"They can increase productivity, attendance and staff retention.","correct":false,"explanation":"These are more likely benefits of good working conditions. Poor conditions tend to increase stress, absenteeism and labour turnover, generating continuing recruitment and operational costs."},{"text":"They can reduce training, recruitment and supervision.","correct":false,"explanation":"Poor conditions are unlikely to reduce these requirements. Higher labour turnover means replacements must be recruited and trained, while stress and absence can increase management pressures."},{"text":"They can increase sales, market share and brand loyalty.","correct":false,"explanation":"These are potential commercial outcomes, not the usual direct consequences of poor working conditions. The long-term costs arise through greater stress, absenteeism and labour turnover."}]},{"id":"47a76616-5595-450a-b78a-add83fd3f34c","cardType":"cloze","points":null,"front":"In DEI, equity means recognising different people may need [ ].","back":"In DEI, equity means recognising different people may need different support to achieve fair outcomes.","mcqOptions":[{"text":"different support to achieve fair outcomes","correct":true,"explanation":"Equity recognises that people begin with different circumstances and barriers. Providing support according to need helps create genuinely fair opportunities and outcomes."},{"text":"the same support regardless of circumstances","correct":false,"explanation":"Providing identical support reflects equality rather than equity and may preserve existing disadvantages. Equity means offering different support where necessary to achieve fair outcomes."},{"text":"equal representation in every job role","correct":false,"explanation":"Representation relates more closely to diversity and does not define equity. Equity recognises differing needs and provides different support so that outcomes can be fair."},{"text":"identical treatment to achieve equal outcomes","correct":false,"explanation":"Identical treatment can overlook unequal starting points and barriers. Equity instead allows different support to be provided according to need in pursuit of fair outcomes."}]},{"id":"89d583cf-05da-4e73-b813-6da5fc5574a7","cardType":"basic","points":2,"front":"Why can DEI as a slogan without action backfire?","back":"Employees may see it as tokenistic.","mcqOptions":[{"text":"Employees may see it as tokenistic.","correct":true,"explanation":"Promoting DEI without changing policies, behaviour or opportunities can appear symbolic rather than genuine. Employees may therefore distrust the business and view its commitment as tokenistic."},{"text":"Employees may see it as legally compulsory.","correct":false,"explanation":"Some equality duties are legal, but lack of action does not mainly make DEI appear compulsory. It makes the organisation’s public commitment seem tokenistic and insincere."},{"text":"Employees may see it as financially efficient.","correct":false,"explanation":"A slogan unsupported by action does not demonstrate financial efficiency. Employees are more likely to notice the gap between claims and practice and regard DEI as tokenistic."},{"text":"Employees may see it as operationally necessary.","correct":false,"explanation":"Repeating a slogan does not establish that DEI is operationally necessary. Without meaningful policies or changes, employees may instead perceive the commitment as tokenistic."}]},{"id":"a2cf4a07-5aa7-47ec-8320-a7cc2103323a","cardType":"cloze","points":null,"front":"Transparent procurement means choosing suppliers using [ ], not favouritism or hidden deals.","back":"Transparent procurement means choosing suppliers using clear, fair and open criteria, not favouritism or hidden deals.","mcqOptions":[{"text":"clear, fair and open criteria","correct":true,"explanation":"Transparent procurement uses criteria that suppliers can understand and that decision-makers apply consistently. Openness and fairness reduce opportunities for favouritism, corruption and hidden agreements."},{"text":"personal relationships and informal preferences","correct":false,"explanation":"Selecting suppliers through relationships or preferences is favouritism rather than transparency. 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Transparent procurement requires clear, fair and open criteria that are applied consistently across suppliers."}]},{"id":"dd8381b7-0699-4eaa-bffc-5d878e00744a","cardType":"basic","points":2,"front":"How do long payment terms benefit the buying business?","back":"They delay cash outflows, improving cash flow.","mcqOptions":[{"text":"They delay cash outflows, improving cash flow.","correct":true,"explanation":"Longer payment terms allow the buyer to retain cash for more time before paying suppliers. This improves short-term liquidity and makes cash flow easier to manage."},{"text":"They bring cash outflows forward, improving profitability.","correct":false,"explanation":"Long payment terms postpone rather than accelerate payments. They improve short-term cash flow, but do not directly increase profit because the purchasing cost remains payable."},{"text":"They delay cash inflows, improving sales revenue.","correct":false,"explanation":"Supplier payment terms concern the buyer’s cash outflows, not cash received from customers. Delaying supplier payments preserves cash temporarily and therefore improves cash flow."},{"text":"They increase cash outflows, improving working capital.","correct":false,"explanation":"Increasing cash outflows would normally weaken liquidity rather than improve it. Long payment terms benefit the buyer by delaying those outflows and supporting cash flow."}]},{"id":"e53e8988-55ed-46af-83c0-666da7dd2cc0","cardType":"basic","points":2,"front":"Why can long payment terms harm small suppliers?","back":"They may struggle to pay wages or materials.","mcqOptions":[{"text":"They may struggle to pay wages or materials.","correct":true,"explanation":"Small suppliers often have limited cash reserves, so delayed customer payments can create a liquidity shortage. They may then lack cash for wages, materials and other immediate costs."},{"text":"They may receive payment before producing or delivering.","correct":false,"explanation":"Long payment terms mean payment arrives later, usually after delivery, rather than in advance. This delay can leave small suppliers unable to fund wages or materials."},{"text":"They may gain greater power over prices or contracts.","correct":false,"explanation":"Small suppliers commonly have weaker bargaining power when large buyers impose long terms. Delayed receipts can instead leave them struggling to pay wages or purchase materials."},{"text":"They may avoid paying for labour or supplies.","correct":false,"explanation":"Payment terms do not remove the supplier’s own obligations to employees and providers. Delayed receipts make meeting those obligations harder, particularly for wages and materials."}]},{"id":"d822c62b-e289-4ed6-8934-d4a8d8bf68da","cardType":"basic","points":2,"front":"How can ethical sourcing protect a business?","back":"It reduces the risk of supply-chain scandals.","mcqOptions":[{"text":"It reduces the risk of supply-chain scandals.","correct":true,"explanation":"Checking suppliers’ labour, environmental and business practices lowers the chance of unethical conduct entering the supply chain and causing reputational damage or public criticism."},{"text":"It guarantees the lowest possible purchasing costs.","correct":false,"explanation":"Ethically produced inputs may sometimes cost more, so ethical sourcing cannot guarantee minimum prices. Its protective value comes from reducing the risk of supply-chain scandals."},{"text":"It removes the need for supplier monitoring.","correct":false,"explanation":"Ethical sourcing depends on continued checks, audits and traceability rather than eliminating monitoring. These controls help identify misconduct and reduce the risk of supply-chain scandals."},{"text":"It eliminates all risk of production delays.","correct":false,"explanation":"Ethical sourcing cannot remove every operational disruption, such as transport failures or shortages. It mainly protects the business by reducing exposure to unethical supply-chain scandals."}]},{"id":"a1beff9c-f82b-43bd-8669-a538f2cbb08e","cardType":"basic","points":1,"front":"When does pricing become an ethical issue?","back":"When customers may be exploited, misled or treated unfairly.","mcqOptions":[{"text":"When customers may be exploited, misled or treated unfairly.","correct":true,"explanation":"Pricing raises ethical concerns when a business takes advantage of customers, deceives them about prices or applies prices in a way that treats them unfairly."},{"text":"When customers may be informed, respected or treated fairly.","correct":false,"explanation":"Giving customers accurate information and fair treatment represents ethical pricing, not an ethical problem. Pricing becomes an issue when customers may be exploited, misled or treated unfairly."},{"text":"When customers may be rewarded, supported or offered discounts.","correct":false,"explanation":"Rewarding loyal customers and offering transparent discounts generally benefit consumers. The ethical issue arises when pricing exploits or misleads customers or treats them unfairly."},{"text":"When customers may be protected, advised or charged transparently.","correct":false,"explanation":"Protecting customers and explaining prices clearly are responsible practices rather than sources of ethical concern. Pricing becomes unethical when exploitation, deception or unfair treatment may occur."}]},{"id":"b8f4c48e-538d-416c-9953-d457ec544055","cardType":"cloze","points":null,"front":"Exaggerating environmental benefits in promotion is called [ ].","back":"Exaggerating environmental benefits in promotion is called greenwashing.","mcqOptions":[{"text":"greenwashing","correct":true,"explanation":"Greenwashing occurs when promotional claims exaggerate or falsely present a business, product or activity as environmentally beneficial, creating a misleadingly responsible image."},{"text":"benchmarking","correct":false,"explanation":"Benchmarking means comparing performance or practices with other organisations, not exaggerating environmental claims. Misleading promotion of environmental benefits is called greenwashing."},{"text":"market segmentation","correct":false,"explanation":"Market segmentation divides a market into customer groups with shared characteristics; it does not describe misleading environmental promotion. Exaggerating environmental benefits is greenwashing."},{"text":"social auditing","correct":false,"explanation":"Social auditing evaluates an organisation’s social or ethical performance rather than exaggerating environmental claims. Misrepresenting environmental benefits in promotion is known as greenwashing."}]},{"id":"94447d25-1c1e-4b3e-8114-dbe91101b032","cardType":"basic","points":2,"front":"Why is sharply raising essential prices during a shortage risky?","back":"Customers may see it as exploitative, damaging reputation.","mcqOptions":[{"text":"Customers may see it as exploitative, damaging reputation.","correct":true,"explanation":"Large price rises for necessities during scarcity can appear to take advantage of customers who have little choice, causing resentment and long-term reputational damage."},{"text":"Customers may see it as charitable, improving reputation.","correct":false,"explanation":"A sharp increase in essential prices is unlikely to appear charitable because customers are being charged more during hardship. They may instead view it as exploitative, damaging reputation."},{"text":"Customers may see it as fair, strengthening loyalty.","correct":false,"explanation":"Although higher prices can ration scarce supply, customers may not regard steep rises for essentials as fair. They can perceive exploitation, which damages the business’s reputation."},{"text":"Customers may see it as generous, building goodwill.","correct":false,"explanation":"Charging substantially more for essential goods during a shortage does not demonstrate generosity. Customers may believe the business is exploiting their limited choices, harming its reputation."}]},{"id":"b949c4e4-dcea-4e93-bd2e-9d9c45d54f36","cardType":"cloze","points":null,"front":"Community engagement means actions taken to build [ ] with local or wider communities.","back":"Community engagement means actions taken to build positive relationships with local or wider communities.","mcqOptions":[{"text":"positive relationships","correct":true,"explanation":"Community engagement involves developing positive relationships through communication, support and participation, helping a business earn trust and goodwill among local or wider communities."},{"text":"competitive rivalries","correct":false,"explanation":"Community engagement seeks cooperation and trust rather than commercial rivalry with communities. Its purpose is to build positive relationships with local or wider groups."},{"text":"social distance","correct":false,"explanation":"Community engagement requires interaction rather than separation from local people and organisations. Businesses undertake it to build positive relationships with the communities around them."},{"text":"corporate control","correct":false,"explanation":"Community engagement aims to strengthen mutual trust, not impose control over community groups. The actions are intended to build positive relationships with local or wider communities."}]},{"id":"a5f5bfa2-b91e-4a17-a786-a6d4aeab804a","cardType":"basic","points":2,"front":"Why might charitable donations be criticised?","back":"

Tiny compared with profit
Distract from harmful core activities

","mcqOptions":[{"text":"

Tiny compared with profit
Distract from harmful core activities

","correct":true,"explanation":"Donations can appear tokenistic when they are negligible relative to profits, and critics may argue that publicity around giving diverts attention from damaging business practices."},{"text":"

Generous compared with profit
Prevent harmful core activities

","correct":false,"explanation":"A donation that is generous relative to profit is less vulnerable to accusations of tokenism, while preventing harmful activities addresses the underlying concern. Criticism instead focuses on tiny, distracting donations."},{"text":"

Valuable to local charities
Increase scrutiny of core activities

","correct":false,"explanation":"Supporting charities and increasing scrutiny of core activities are potential benefits rather than grounds for criticism. Critics argue that donations may be tiny and distract from harmful operations."},{"text":"

Significant compared with profit
Reform harmful core activities

","correct":false,"explanation":"Meaningful donations and improvements to damaging operations demonstrate substantive responsibility rather than invite this criticism. Concern arises when donations are tiny and conceal harmful core activities."}]},{"id":"43b0a12e-1565-4893-8f24-a64778cea4be","cardType":"basic","points":2,"front":"How can sponsoring a local event benefit a business?","back":"It can build brand awareness and goodwill.","mcqOptions":[{"text":"It can build brand awareness and goodwill.","correct":true,"explanation":"Local event sponsorship exposes the brand to participants and audiences while associating the business with community support, increasing recognition and generating favourable attitudes."},{"text":"It can remove production costs and overheads.","correct":false,"explanation":"Sponsorship may create publicity, but it does not automatically eliminate production expenditure. Its principal community-facing benefit is building brand awareness and goodwill."},{"text":"It can reduce community trust and recognition.","correct":false,"explanation":"Supporting a local event is more likely to improve community perceptions than reduce local trust. Its benefit comes from greater brand awareness and goodwill."},{"text":"It can create market control and exclusivity.","correct":false,"explanation":"Event sponsorship cannot guarantee monopoly power or remove competitors from a market. It primarily benefits the business by strengthening brand awareness and goodwill."}]},{"id":"c636559b-356c-4bf9-9561-9f86542afa1f","cardType":"basic","points":1,"front":"What is the main business cost of employee volunteer programmes?","back":"Paid time away from normal work.","mcqOptions":[{"text":"Paid time away from normal work.","correct":true,"explanation":"When volunteering takes place during working hours, the business continues paying employees despite losing the normal output they would have produced during that time."},{"text":"Unpaid time away from normal work.","correct":false,"explanation":"Unpaid volunteering does not create the main wage-related cost identified here because the business is not paying for those hours. The principal cost is paid time away from normal work."},{"text":"Customer time spent supporting the programme.","correct":false,"explanation":"Time contributed by customers is not an employment cost borne by the company. The main business cost is paying employees while they are absent from their normal duties."},{"text":"Volunteer fees paid personally by employees.","correct":false,"explanation":"Personal contributions made by employees are borne by those employees rather than the business. The company’s main cost is paid staff time diverted from normal work."}]},{"id":"5c7697b1-9278-4c0a-968d-2e339e98ff9a","cardType":"basic","points":2,"front":"Why can a small ethical concern become very important?","back":"It may affect powerful stakeholders or gain media attention.","mcqOptions":[{"text":"It may affect powerful stakeholders or gain media attention.","correct":true,"explanation":"An apparently minor concern can escalate if influential stakeholders pressure the business or media coverage spreads awareness, amplifying reputational and commercial consequences."},{"text":"It may affect few stakeholders and receive no publicity.","correct":false,"explanation":"Limited stakeholder involvement and no publicity would usually restrict the concern’s business impact rather than magnify it. Importance grows when powerful stakeholders are affected or media attention develops."},{"text":"It may be resolved privately and quickly without publicity.","correct":false,"explanation":"A concern that is quickly and privately resolved is less likely to become highly significant. Escalation is more likely when powerful stakeholders or the media become involved."},{"text":"It may have no operational impact or stakeholder interest.","correct":false,"explanation":"No operational consequences or stakeholder interest would normally keep an issue minor. A small concern can become important through influential stakeholder pressure or extensive media coverage."}]}]}],"examCountdown":{"examDate":"2027-05-13","paperLabel":"Paper 1"},"heading":"Ethical issues","title":"Ethical issues Flashcards","topbar":{"backHref":"/a-level/business/ocr/flashcards"},"topicSidebar":"$L38"}]}],"topicId":"261b3c2d-238f-5651-9315-0f3f70957bb9","walled":"$L39"}],"$L3a","$L3b"]