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1
Comments on Learning Outcome Performance
Learning Outcomes & Assessment Criteria Comments
Learning Outcome 2 – Analyse the core principles of Question 1 – tested this LO and students were asked to
corporate social responsibility evaluate a model of corporate social responsibility (CSR)
Assessment Criterion 2.1 – Analyse the core principles of of their choice, for example Carroll’s Pyramid. The
the economic model, the philanthropic model and question carried 5 marks.
stakeholder models of corporate social responsibility It is challenging for students to use the verb ‘evaluate’
within a 5 marks question. Notwithstanding, this
question was answered well by the majority of students.
Many achieved full 5 marks. Most students used the
example, answering with the Carroll Pyramid.
Those who failed to achieve good marks showed little
knowledge of the topic.
Providing an example such as Carroll helped focus
student’s answers.
Learning Outcome 4 – Analyse the core principles of Question 2 – tested this LO and required students to
sustainability in relation to businesses critically examine the THREE requirements organisations
Learning criterion 4.1 - Analyse the meaning and must consider in order to develop a sustainability
importance of sustainability in a business context strategy.
Those students who understood the question and did
not mis-interpret it provided very good, relevant
answers with many achieving the full 10 marks.
There were many students across centres that
interpreted this question as the goals to achieve
sustainability and therefore their answers were more
relevant to question 5. The marks over all centres
therefore varied from full 10 marks to zero to 2 marks.
Fortunately for some of these students a pass was
achieved overall by their answers to other questions.
Learning Outcome 1 – Critically evaluate differing Question 3 – tested this LO. The question was divided
approaches to business ethics into 2 parts. Part a) required students to critically
Assessment Criterion 1.1 – Evaluate teleological, analyse ONE Western approach to business ethics for 5
deontological and mixed frameworks which influence marks and
western approaches to business ethics Part (b) required students to critically analyse ONE
Assessment Criterion 1.2 – Evaluate how the core Eastern approach to business ethics for 5 marks.
principles of Confucianism philosophy influence eastern Both parts of this question were answered well by many
approaches to business ethics. students across centres indicating a good knowledge of
the topic. Those who failed to achieve good marks
confused Western and Eastern approaches indicating a
lack of in-depth study of the topic.
Learning Outcome 3 – Critically evaluate the Question 4 – tested this LO and students were asked to
opportunities and challenges for a range of critically assess the reasons why organisation should
organisations to develop ethical business practice engage in Corporate Social Responsibility reporting.
through corporate social responsibility policies and Students were requires to use examples to support their
reporting answer.
Assessment Criterion 3.1 – Critically evaluate how Overall centres there were some fairly good answers
organisations of different types can effectively and most fell within level 2 or 3 of the grade boundaries.
implement corporate social responsibility policies and More marks could have been achieved had they
reporting procedures on triple bottom line expanded on their answers using the question verb
sustainability. ‘critically assess’. Many provided lists rather than
assessing the reasons for reporting. Others failed to
read the full question therefore failed to realise that the
question related to ‘reasons for CSR reporting’.
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Learning Outcome 4 – Analyse the core principles of Question 5 – tested this LO. The question was divided
sustainability in relation to businesses into 2 parts.
Assessment Criterion 4.2 – Critically discuss the Part (a) required students to explain FIVE sustainability
common elements of sustainability in a business context goals in the context of a company or industry sector of
Assessment Criterion 4.3 – Critically assess the factors their choice.
an organisation must consider when developing a Part (b) required students to critically analyse how
sustainability strategy. organisations can effectively meet the sustainability
goals identified and explained in part 5 (a). Students
were required to use examples to support their answer.
Part (a) of this question was answered fairly well by the
majority of students who were able to explain five goals.
Some provide more than five but no further marks were
awarded. Part (b) was answered fairly well by students
across centres who provided the steps of the process to
achieve the goals stated in part (a).
Those who failed to achieve good marks were those
who provided lists therefore ignoring the ‘verb’ of the
question.
Learning Outcome 5 – Analyse the influence of Question 6 – this tested this LO by providing a brief
organisational culture and leadership on business ethics scenario in the form of a sentence ‘You receive an
with a focus on marketing and human resource expensive gift from one of your suppliers with whom you
management have spent a considerable amount of time ensuring their
Assessment Criterion 5.1 – Critically evaluate how satisfaction’. Students were then asked to critically
organisations’ culture and leadership can influence discuss the ethical dilemmas that can arise from this
approaches to ethical decision-making scenario and recommend how such dilemmas can be
managed.
This was not a popular option by many students. Many
of those who chose to answer this question failed to
achieve good marks, mostly falling within level 1. There
was only a few across centres who achieved level 2 with
none managing to achieve higher level grades. The
indication from the answers was that students did not
have sufficient knowledge of the topic to provide
relevant answers and therefore answers were vague
and often irrelevant. Students overall showed a lack of
knowledge of what was required by the question or lack
of study of the topic.
Learning Outcome 5 – Analyse the influence of Question 7 – this tested this LO. Students were required
organisational culture and leadership on business ethics to critically assess the importance of considering ethical
with a focus on marketing and human resource issues when undertaking marketing activities in an
management industry of their choice. Students were required to use
Assessment Criterion 5.2 – Assess the opportunities and examples to support their answer.
challenges for differing types of organisation to This was a popular choice and over all centres marks fell
effectively integrate ethical decision-making into the within the level 2 and 3 grade boundaries. A few
marketing mix and human resource management managed to achieve level 4.
functions. However there were still a few students who failed to
achieve beyond level 1 boundary. These students did
not have in-depth knowledge of the topic and provided
vague answers with no examples.
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Question 1 (5 marks)
Evaluate a model of corporate social responsibility (CSR) of your choice, for example Carroll’s Pyramid.
Learning Outcome
2. Analyse the core principles of corporate social responsibility
1. Mark scheme
Task Indicative Content Total
1 Where students choose Carroll as the model, they should explain the FOUR interconnected areas of
society’s expectations of business in Carroll’s pyramid, namely:
• Philanthropic – at the top of Carroll’s pyramid and is seen as a desirable responsibility rather
than a required or expected responsibility. It includes any activities that improve the quality of
life for society and other stakeholders such as supporting charitable and community projects.
• Ethical – these obligations are expected (rather than necessarily required) by society. This
means that organisations are expected to do what is right and fair for all stakeholders even if
not legally obliged to do so. These obligations can vary across different countries.
• Legal – these responsibilities are required by society to comply with legal regulations in order to
ensure responsible business practice
• Economics – this is a primary responsibility of business, that is, to remain in business in order to
satisfy shareholders and enable employees to keep their jobs. This applies to all businesses and
only when this principle is satisfied can other responsibilities be addressed. This links to
Friedman’s shareholder view of an organisation.
In their evaluation, students should explain the strengths and weaknesses of Carroll’s model, such
as:
Strengths:
- Carroll’s model is easy to understand
- Carroll’s message is that CSR has more than one element
- Emphasises the importance of profit
Weaknesses:
- It is too simplistic
- Perhaps ethics should be at the top of the pyramid
- Business do not always do what they claim when it comes to corporate social responsibility
Economic (shareholder) model of CSR (Milton Friedman (1912-2006)). They should explain the basis
of the model, namely, that the fundamental responsibility of business is the pursuit of profit and
shareholder value while adhering to legal and ethical norms. Friedman questioned the use of
company funds for charitable/philanthropic purposes since this diverts funds away from the profit
goal but Friedman recognised that such projects can add shareholder value through improving
company image and reputation.
Philanthropic model of CSR which links to the economic model in terms of organisations engaging in
philanthropic projects for public relations or reputational purposes as considered by Friedman. It
could also be linked to other business motives such as tax breaks. The philanthropic model is about
organisations being motivated to engage in CSR because it is the right thing to do rather than
required by law or business gain.
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Stakeholder model of CSR (Edward Freeman 1984) which is based on socio-economic theory.
Freeman defined stakeholders as ‘any group or individual who can affect or is affected by the
achievement of the firm’s objectives’. The basis of stakeholder theory is that organisations should
not be managed just in the interests of shareholders but should take account of all those affected
by the organisation’s activities. Students should give examples of stakeholders (e.g. employees,
customers, community, competitors, suppliers, media, government, non-government groups,
owners). Stakeholder theory can help managers to understand their operating environment and
relationships. It links to cultural context and types of organisational structure.
3. Recommendations
None.
4. Quick Tips
Read the question carefully to understand what is required. For the verb evaluate even for 5 mark provide some
information on the strengths and weaknesses of the model you choose.
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Question 2 (10 marks)
Critically examine the THREE requirements organisations must consider in order to develop a sustainability strategy.
Learning Outcome
Analyse the core principles of sustainability in relation to businesses
Assessment Criterion 4.1 – Analyse the meaning and importance of sustainability in a business context
1. Mark scheme
Question Indicative Content Total
2 Students should commence their answer with a definition of sustainability or sustainable
development. This can be based on the IISD website (se in the course book page 45) where the
definition contains TWO key concepts, - concept of needs – namely, the essential needs of the
world’s poor, to which overriding priority should be given and idea of limitations as imposed by
the state of technology and the ability to meet present and future needs.
The framework is based on the idea that organisations need not only to meet financial bottom
line requirements, but also consider social responsibilities towards people and environmental
responsibilities towards the planet.
Other relevant material should be credited for example consumerism, population growth,
recycling and waste, climate change.
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3. Recommendations
Read the examination paper carefully and then each question. In this particular case question 5 referred to
sustainability goals whereas question 2 differed in that it required students to examine considerations in order to
develop that a sustainability strategy.
4. Quick Tips
Remember to study the whole syllabus and be careful when questions in the same paper seem to relate to a similar
topic but from different viewpoints. This may be the case as in questions 2 and 5 but the actual answer should relate
to what is asked.
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Question 3 (10 marks)
a. Critically analyse ONE Western approach to business ethics
b. Critically analyse ONE Eastern approach to business ethics
Learning Outcome
Critically evaluate differing approaches to business ethics
1. Mark scheme
Question Indicative Content Total
3a WESTERN APPROACHES to business ethics:
Students should select ONE Western approach from the following:
• Non-Consequentialist/Deontological frameworks
1. Ethics of Duty/Kantianism
- Kant (1724-1804) viewed that decisions about right and wrong are not based on particular
situations or the consequences of actions, but instead by set of pre-existing universal laws.
- The ’categorical imperative’ meaning that without exception (categorical) we should only act
according to universal duty (imperative), rather than on the consideration of factors such as
who is involved or influenced by decisions. Key tests of whether an action can be deemed
ethical are consistency, human dignity and universality.
- It does not give any consideration to ‘exceptions to the rule’. This would suggest that people
have a duty to do the ‘right’ thing, even if that produces more harm/less good than doing the
‘wrong’ thing.
2. Ethics of rights/justice
- Locke (1632-1714) conceptualised the concept of ‘natural rights’, now known as ’human
rights’ which expresses that all humans are entitled to basic entitlements regardless of
gender, race, religions, nationality or any other factor.
- Individual rights link to the issue of justice in ensuring the fair and equal treatment of all
concerned (procedural justice) and ensuring that everyone gets what they deserve whether
positive or negative (distributive justice). A decision maker should consider if processes have
been established to avoid ‘winners’ and ‘losers’ and to ensure everyone is treated fairly.
• Consequentialist/Teleological frameworks
1. Egoism
- An action is morally right if supported by all decision makers and is based on the assumption
that since we only have limited insight into the consequences of actions, we should be free to
pursue our own desires/interests.
- From an economic view, the pursuit of self-interest is morally acceptable because it produces
a desirable outcome for society, when the marketplace is based on a system of open
competition and open information (for example ensuring no monopolistic behaviour).
2. Utilitarianism
- Actions are morally right if they result in the greatest amount of good for the greatest
amount of people affected by those actions. As a consequentialist approach, it does not
consider any act as right or wrong, but it depends on the consequences of that action
(meaning for example that in some situations it would be ethically right to lie).
- It encourages actions that lead to the greatest amount of good for everybody involved. This
differs to egoism through considering collective welfare rather than individual interests.
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- Happiness can be measured. In making a decision, a particular ‘utility’ can be assigned to each
action and each person involved, and the action with the highest utility is seen as morally
correct.
3. Virtue ethics
- Based on the character and integrity of the decision maker, rather than the underlying
principles or outcomes of particular actions.
- Virtue ethics consider that morally correct actions are taken by those with virtuous character.
Virtues can be considered as wisdom, honesty, courage, loyalty, mercy and so on. It is
important to consider local cultures and traditions when considering what constitutes a ‘good
life’ and good virtues.
- Theories influencing Eastern thought are based on Confucian theory, alongside religions such
as Buddhism, Taoism and Islam. Western philosophical approaches are based on human
reasoning, whereas Eastern religious approaches are based on deities or teachings as a source of
principles which influence ethical conduct.
- Eastern approaches are more concerned with virtuous behaviour, the development of
personal insight and judgement, relationships, showing respect and doing what is expected of
you by family and society – and the universe will take care of the rest.
- Eastern businesses often work in systems of contradictory laws and regulations, and therefore
place greater trust in social networks than the legal system.
• Confucianism
- Confucius (551BC-479BC) was a Chinese philosopher who emphasized the influence of
personal and governmental morality, and social relationships in order to create a peaceful and
harmonious society. Confucianism is concerned with behaving in a certain way through the
adoption of key virtues/values, rather than following particular beliefs (as in Christian and Islam
religions for instance).
- Ethical business requires business leaders to consider the wellbeing of all people. It is
therefore strongly linked with the Western virtue ethics approach. These values can be
understood through understanding TWO key characteristics of Eastern societies which influence
approaches to business ethics: hierarchical social relations and collectivism.
• Collectivism
- Eastern societies are based on the promotion of collective welfare over individual welfare, in
order to bring about group belonging and harmony. This focus on human relations and building
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good connections and trust in relations (beginning with learning these behaviour through family
relations) is known in Confucianist philosophy as ‘Guanxi’.
- Guanxi is reflective of societies in which individuals and organisations are more dependent on
connections rather than governments to provide security. Unlike Western business relationships
which are separate from personal relationships and can be formed and dissolved quickly,
relationships are viewed as lifetime commitments.
3. Recommendations
No recommendations – question clear and unambiguous.
4. Quick Tips
Students should study the whole syllabus. Particularly where there are different approaches such as in this question.
Be careful to study both and make notes on the differences. This will enable the student to answer relevantly.
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Question 4 (25 marks)
Critically assess the reasons why organisations should engage in Corporate Social Responsibility reporting. Use
examples to support your answer.
Learning Outcome
Critically evaluate the opportunities and challenges for a range of organisations to develop ethical business practice
through corporate social responsibility policies and reporting
1. Mark scheme
Question Indicative content Total
4 Answers should explain what CSR reporting (also referred to as social accounting) is, namely, it
is concerned with organisations assessing and communicating impacts on social, environmental
and ethical issues associated with the activities of the organisation. CSR reporting tools can be
referred to:
• A leading reporting initiative is the ‘Global Reporting Initiative’ (GRI). This is the most
influential framework on global approaches to CSR reporting. Its purpose is to create a
common approach to reporting on economic, social and environmental performance (i.e.
the ’triple bottom line’ of sustainability).
• The standards include economic, environmental and social criteria, and some can be
referred to, for example:
Economic Standards
• Economic performance
• Market presence
• Indirect economic impacts
• Procurement practices
• Anti-corruption
• Anti-corruption behaviour
Environmental Standards
• Materials
• Energy
• Water
• Biodiversity
• Emissions
• Effluents and Waste
• Environmental Compliance
• Supplier Environmental Assessment
Social Standards
• Employment
• Labour/Management relations
• Occupational health and safety
• Training and education
• Diversity and equal opportunity
• Non-discrimination
• Freedom of association and collective bargaining
• Child labour
• Forced or compulsory labour
• Security practices
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• Rights of indigenous peoples
• Human rights assessment
• Local communities
• Supplier social assessment
• Public policy
• Customer health safety
• Marketing and labelling
• Customer privacy
• Socioeconomic compliance
Answers should suggest reasons for CSR reporting include (Crane and Matten 2015):
Internal benefits such as increased understanding of the risks and opportunities; the link
between financial and non-financial performance; influence on long-term management strategy
and policy and business plans; streamlining processes, reducing costs and improving efficiency;
benchmarking and assessing sustainability performance with regard to law, norms, codes,
standards, voluntary initiatives; avoiding being implicated in published failures (environmental,
social and governance); comparing performance internally and between organisation and
industry sectors
External benefits such as mitigating/reversing negative environmental, social and governance
impacts; improving reputation and brand loyalty; enabling external stakeholders to understand
the organisation’s true value and tangible and intangible assets; demonstrating how the
organisation influences and is influenced by sustainable development
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• Trends in CSR reporting tools
- More companies report on CSR in Asia Pacific than in any other region, followed by the
Americas, then Europe and then the Middle East/Africa. Four emerging economies have the
highest global reporting rates: India, Indonesia, Malaysia and South Africa. There has been a
surge in reporting in countries such as India, Taiwan and South Korea.
- Europe’s ranking is attributed to the low level of reporting in Eastern European countries,
which affected the overall rating. This is set to change however since the EU introduced a
regulatory requirement for non-financial reporting as of December 2016.
- The EU has also introduced new reporting instruments on climate change mitigation and the
protection of human rights in global supply chains. The rate of growth for environmental
reporting instruments is slowing down, reflecting a longer history of environmental
regulation.
- Technology will enable companies and stakeholders to access and analyse data much more
effectively through digital data.
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Other relevant material should be credited.
Level Mark Descriptor
0 No rewardable material
1 1-6 • Demonstrates very basic knowledge; there may be major gaps or omissions
• Provides little evidence of understanding and links between relevant information.
• Response lacks clarity and fails to provide an adequate answer to the question
2 7 - 12 • Demonstrates isolated knowledge and understanding of relevant information
• Some analysis and links between relevant information, but consists of basic description of
information
• Meaning and understanding is conveyed but in a non-specialist way
3 13-18 • Demonstrates accurate knowledge and understanding of relevant information with a few
omissions
• Evidence of application demonstrating some linkages and interrelationships between factors
leading to an analysis being presented
• Demonstrate the use of logical reasoning, clarity, and appropriate specialist technical
language
4 19-25 • Demonstrates accurate and thorough knowledge and understanding of relevant
information; any gaps or omissions are minor
• Evidences thorough application leading to a balanced analysis containing linkages and
interrelationships between factors
• Logical reasoning evidenced throughout response which is clear and uses specialist technical
language consistently
3. Recommendations
None
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4. Quick Tips
Students should read the question carefully to ensure understanding of what is required. In this particular question
the answer should have related to reasons for CSR reporting. Remember to study the whole of the syllabus. This
includes understanding all learning outcomes by reading the relevant chapters. Make your own notes and test
yourself. Undertake sample exam questions. This will enable you to answer questions relevantly under exam
conditions.
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Question 5 (25 marks)
a. Explain FIVE sustainability goals in the context of a company or industry sector of your choice. Use examples to
support your answer.
b. Critically analyse how organisations can effectively meet the sustainability goals identified and explained in part
5(a).
Learning Outcome
Analyse the core principles of sustainability in relation to businesses
1. Mark scheme
Question Indicative content Total
5a This question relates to the sustainable development goals (SDGs) –
Answers should explain FIVE sustainability goals and in particular those that are relevant to the
company or industry sector of the student’s choice:
• Goal 1 - End poverty in all forms everywhere
• Goal 2 - End hunger, achieve food security and improved nutrition and promote sustainable
agriculture
• Goal 3 - Ensure healthy lives and promote wellbeing for all at all ages
• Goal 4 - Ensure inclusive and equitable quality education and promote lifelong learning
opportunities for all
• Goal 5 - Achieve gender equality and empower all women and girls
• Goal 6 - Ensure availability and sustainable management of water and sanitation for all
• Goal 7 - Ensure access to affordable, reliable, sustainable and modern energy for all
• Goal 8 - Promote sustained, inclusive and sustainable economic growth, full productive
employment and decent work for all
• Goal 9 - Build resilient infrastructure, promote inclusive and sustainable industrialization and
foster innovation
• Goal 11 - Make cities and human settlements inclusive, safe, resilient and sustainable
• Goal 13 - Take urgent action to combat climate change and its impacts
• Goal 14 - Conserve and sustainably use the oceans, seas and marine resources for
sustainable development
• Goal 15 - Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably
manage forests, combat desertification, and halt and reverse land degradation and halt
biodiversity loss
• Goal 16 - Promote peaceful and inclusive societies for sustainable development, provide
access to justice for all and build effective, accountable and inclusive institutions at all levels
• Goal 17 - Strengthen the means of implementation and revitalize the global partnership for
sustainable development
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A basic Pass would include:
- Identification of five sustainability goals and the company or industry sector of your
choice
The 2030 Sustainable Development Agenda includes 17 Sustainable Development Goals (SDGs),
which replaced the Millennium Development Goals. Each goal has actionable targets to reach,
are focused on the efforts of all stakeholders, and are applicable to developing and developed
countries alike. They are not all equally applicable to all companies.
Answers on strategy should refer to the process on how to achieve the goals and this can
include The Global Reporting Initiative (GRI) which developed reporting guidelines in a 5-step
process:
• Step 1: Understand the Sustainable Development Goals (SDGs) (FIVE of which will have been
identified in part a.)
3. Recommendations
None
4. Quick Tips
Students should study the whole syllabus. Students should remember that when asked for a number of points no
marks are awarded for providing more than that asked for. Making your own notes on each topic helps remember
topics for the exam. Undertaking sample exam questions under exam conditions will help you to realise the time
restraints of an exam.
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Question 6 (25 marks)
‘You receive an expensive gift from one of your suppliers with whom you have spent a considerable amount of time
ensuring their satisfaction’
Critically discuss the ethical dilemmas that can arise from this scenario and recommend how such dilemmas can be
managed.
Learning Outcome
Analyse the influence of organisational culture and leadership on business ethics with a focus on marketing and
human resource management
1. Mark scheme
Question Indicative content Total
6 Ethical dilemmas around corruption can arise for employees working within cultures where
values differ from their own. Students should discuss whether decisions should be driven by
their own values or the values of the country they are working within.
Students should explain that dilemmas are evident when considering issues of corruption and
although organisations issue policies and procedures surrounding corruption, attitudes vary
across the globe.
Answers should refer to varying attitudes towards corruption such as offering bribes where in
some countries if offering or paying a bribe means being able to feed your family then it is not
seen as a form of corruption. Corruption can be ingrained in some countries into the way
business is conducted and staff require to be trained to recognise, understand and respond to
these ethical dilemmas and challenges. Staff may be unsure whether to accept a gift which can
be perfectly normal in Eastern cultures but in the West can be seen as a form of bribery.
Transparency International has reported on levels of global corruption since the 1990s. It
defines corruption as ‘the abuse of entrusted power for private gain’ and that it can be classified
as grand, petty and political, depending on the amounts of money lost and the sector where it
occurs.
Transparency International highlights that corruption has costs politically through depleting
national wealth, socially through eroding trust and environmentally through the lack of
enforcement of environmental regulations. Transparency International encourages
transparency, accountability and integrity in business dealings.
Students may also refer to the Institute of Business Ethics Report which details indicators of
corporate culture and sets out that examples of good culture were identified to be companies
with well-articulated set of values clearly owed by the board and senior executive. Course book
chapter 5 page 72 provides table of findings on indicators of culture (whether good or bad).
Students may also refer to leadership and ethics and that the role of senior management
encourages and influences ethical behaviour throughout an organisation. Crane and Matten
suggest TWO differing modes of ethical leadership: ethical cultural change (leader’s role is to
communicate and personify the values and standards of the organisation, to inspire and
motivate employees) and ethical cultural learning (to empower employees to make ethical
decisions which can involve some risk as a result of giving them control to make the right
decisions).
Students may also refer to the FIVE main dimensions of National culture values (Geert Hofstede
1983 - identified the following FIVE main dimensions of values:
- Power Distance
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The extent to which less powerful members of organisations both expect and accept that
power is distributed unequally. High power distance cultures based on hierarchical relationships
accept more inequality between individuals, and business authority is rarely challenged.
In low power distance cultures, accountability is linked to job role, at whatever level of the
organisation that may be. Individuals in low power distance countries are not scared to
question decision makers and to openly express opinions.
- Individualism
In high individualistic cultures ties are loose and individuals are expected to look out for
themselves. In low individualist cultures (collectivist), people stay in cohesive and loyal groups.
Such collectivist cultures may lead to a strong customer motivation to buy from an ‘ethical’
company in order to be associated with this organisation which works towards collective gain.
- Masculinity
In high masculine countries behaviour is expected to be assertive, tough and focused on
material success. The focus is on material goods, status, accomplishment, reward and ambition.
Individuals are willing to sacrifice leisure time in order to ‘win’ at business. Low masculine
(feminist cultures) are identified by a more modest, caring approach based on supporting
others and human needs
- Uncertainty avoidance
Societies with low uncertainty avoidance are comfortable with ambiguity, reflected for example
in loose contractual details. Societies with high uncertainty avoidance prefer clear rules and
guidelines and avoid any ambiguity.
- Leadership characteristics
The personal values of leaders are important, since if leaders are perceived to be ruthless and
primarily concerned with the financial bottom line, it is likely to permeate organisational
culture. Conversely, if leaders are seen to drive forward the implementation of ethical
practices, it can have a positive motivating influence on others.
Crane and Matten (2016) suggest TWO differing modes of ethical leadership:
- It is important for leaders to give a positive example through their own behaviours.
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- Ethical leaders focus on the goals and dreams of the organization and recognise that
employees drive organisational success.
- Find the best people and develop them (linked to HR practices – focus on ethical attributes)
.
- Create mechanism of dissent (encourage and enable whistleblowing)
- Understand the challenges in ethical choices, consider local cultural context and use
judgement that considers impacts on all stakeholders
In addressing how to manage dilemmas such as stated in the scenario students should refer to
the above and to initiatives that Transparency International runs to raise awareness and
combat corruption and that awareness-raising must be instilled into corporate cultures in order
to meet ethical business, CSR and sustainability aims.
3. Recommendations
Students should use the scenario provided to focus their answer. Study of the whole syllabus as recommended above.
4. Quick Tips
Practice some scenarios and take time to make notes and then undertake a sample question under exam
conditions.
20
Question 7 (25 marks)
Critically assess the importance of considering ethical issues when undertaking marketing activities in an industry of
your choice. Use examples to support your answer.
Learning Outcome
Analyse the influence of organisational culture and leadership on business ethics with a focus on marketing and
human resource management
1. Mark scheme
Question Indicative content Total
7 When undertaking this question students should include what needs to be considered in ethical
marketing such as honesty, truth, fairness and responsibility in marketing activities, from
gathering data for market research to the products/services of your chosen company/industry
to framing advertisements.
Undertaking ethical approach to marketing and consumer privacy involves going beyond
compliance by giving consumers the opportunity to opt out. It is important to clearly
communicate privacy policies especially in ever increasing consumer, media and regulatory
attention on privacy and data management. (Some students may be aware of and refer to the
EU regulations coming into force this year (2018) GDPR (General Data Protection Regulations)
Students may refer to their own website privacy policies and include some sections such as:
- how and why personal information is collected
- how personal information is used and protected
- when and with whom personal information is shared
- what choices consumers have about how personal information is collected, used and shared
- other privacy rights such as - of children e.g. if part of your target audience includes children
you need to follow certain ethical guidelines to maintain consumer trust. Guidelines include
‘not to target adult products to children’ or ‘keep information/data on children safe’ - in a recent
case a company’s data was hacked leading to names of children being out in the public domain
but also damaging the company’s reputation for years to come. Therefore, if at any point in
your marketing activities you capture data or information on a child it is necessary to make sure
such information stays safe.
Important that consumers are made aware of their ‘digital footprint’ – students may include use
of cookies on websites, asking consumers/customers to agree to proceed. However,
organisations should go beyond regulatory control and take active steps to highlight and remind
consumers how data is used. Reference may be made to Facebook and Apple on data privacy
and security concerns.
Marketing Mix
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Products: students should refer to consumers’ rights to products and services, namely, that
they are safe and fit for purpose. It is important when advertising products or services and
therefore when considering market research to know the adverse consequences if products
and services are not fit for purpose or safe for use, as organisations have a duty of care to
ensure this. Organisations need to advise consumers of any risks, particularly for products that
are harmful to health Highlight requirements on labels.
Social impacts: Consumers take account now of working standards within an organisation and
that they are not exploited (wage, age, freedom of choice)
Economic impacts: consumers consider whether materials are sourced locally where possible to
ensure fair prices are paid
Price: consumers concerned about fair price which is the case in open and competitive markets,
but problems arise when organisations exploit their position in the market. Think about pricing
when doing market research
Place: know how producers distribute goods and services to end consumers – concern
therefore with the supply chain relationships
Promotions: ethical issues arise relating to promotion – direct sales, sales promotions, personal
selling, social media etc. Crane and Matten (2015) suggest topics can be understood from TWO
perspectives: individual impact through misleading deceptive practices and social and cultural
impacts of marketing.
Misleading/deceptive marketing:
Aim of marketing is to inform consumers about products and services and persuade them to
buy. So, information must be accurate in descriptions and labelling. Organisations must be
careful not to create false beliefs in the consumer’s mind e.g. through untrue claims, or those
giving false impressions of quality. Example ‘Red Bull gives you wings’ – sued and slogan now
providing wings whenever you need them….’.
Offensive advertising:
Avoid causing offence on grounds of race, religion, gender, sexual orientation, disability and
age. When deciding on whether an advert may cause offence consider the audience, the
context in which the ad appears, the product it is promoting, prevailing standards in society.
You can or may wish to commission major consumer research (does the company or industry of
your choice do this?)
Misleading advertising:
Complaints on misleading advertisements often concern pricing and issues such as hidden costs
like booking fees and credit card charges.
Harmful advertising:
Complaints are often around harm and social responsibility e.g. alcohol, cigarettes, health, body
image, motoring – special care when undertaking your market research and framing adverts
when the advert is showing children or young people e.g. where results in child’s physical,
mental or moral harm
3. Recommendations
As before – students should study the whole syllabus and ensure they understand and are clear on each topic and the
differences in each.
4. Quick Tips
Study the whole syllabus. Take your own notes on each chapter. At the end of each chapter try some
questions at first even with the book. Then move on to practice questions under exam conditions. Doing this
will ensure that you are able to focus under exam conditions. You will also know how to manage your time
in the exam.
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