Study Stakeholder conflicts in the Pearson Edexcel A Level Business specification, including the knowledge, application and evaluation needed for exam questions and mark-scheme responses.
Source for use with Extract D Shein’s low prices or ethical practices, what’s more important to consumers? Shein, a Chinese company, is one of the biggest online fast-fashion retailers but there are serious concerns about its ethical practices. A documentary by Channel 4* showed poor wages and working conditions at Shein’s factories, where employees worked 18-hour shifts for seven days a week. Employees were allowed only one day off per month and had to pay a heavy fine for any mistakes in production. The company is also accused of sending most customer returns to landfill as it is cheaper than properly processing them. At the same time, a study by Simon-Kucher & Partners found that 90% of global consumers now look for more sustainable and ethical options, while 75% of UK adults said they changed their purchasing habits to be more sustainable. Yet a week after the documentary was shown, Shein reported its busiest day for the website since the summer, with 616,000 visitors. Sustainability in the fashion sector has become a big topic in recent years, with many of the big retailers, such as Zara and H&M, implementing ways to reduce their carbon footprint. Shein seems to have turned the other way and concentrated on maximising its profit margins, while also trying to keep prices as low as possible. * Channel 4 is a UK-based television business
Evaluate the importance of business ethics for a global business.
Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the general marking guidance. The indicative content below exemplifies some of the points that candidates may make but this does not imply that any of these must be included. Other relevant points must also be credited.
Knowledge, Application, Analysis, Evaluation - indicative content
- Business ethics refer to the principles and acceptable behaviours that govern the ways in which a business operates, they are considered to
be the 'right thing to do'
- This of course, varies from country to country depending upon the legal framework and the cultural norms of society
- In Extract D, a survey reports that 90% of global consumers are
seeking out more sustainable and ethical options
- This could mean that those businesses that actively pursue and promote a more sustainable and ethical policy in their operations are
likely to attract those consumers
- By doing so they will increase sales and market share which may lead to increasing profits
- Patagonia and Tom's shoes are seen as examples of truly ethical
businesses. Extract D uses the example of Zara and H&M as businesses becoming more sustainable
- The opposite may also hold true. Failure to show ethical behaviour may
lead to a loss of sales as ethical consumers buy elsewhere to show their
displeasure
- Starbucks was forced to become more ethical after consumer protests about its alleged underpayment of tax
- Pressure groups such as ethicalconsumer.org aim to inform and persuade shoppers towards more ethical buying
- It would, therefore, seem important that global businesses adopt a
more sustainable and ethical approach either for purely practical reasons or for altruistic ones as well
- However, Extract D suggests that in reality, many consumers are not too concerned over ethical issues
- Low prices are the most important factor for many customers, either from necessity because of low incomes or from indifference
- Some businesses with strong brand names seem resistant to criticism such as Amazon, which has been accused of tax-dodging and poor working conditions, Primark with the conditions in parts of their supply
chain and Apple whose supplier Foxconn is dogged by controversy
- Nearly all global businesses will have an ethical policy but the extent to which they adhere to it is open to question and for some such as Shein
it is clearly not a major concern
- The importance of ethical behaviour for a global business may depend on the market that it operates in and the attitudes of its potential
customers
| Level | Mark | Descriptor |
|---|---|---|
| 0 | No rewardable material. | |
| Level 1 | 1-4 | Isolated elements of knowledge and understanding. Weak or no relevant application of business examples. An argument may be attempted, but will be generic and fail to connect causes and/or consequences. |
| Level 2 | 5-8 | Elements of knowledge and understanding, which are applied to the business example. Arguments and chains of reasoning are presented but connections between causes and/or consequences are incomplete. Attempts to address the question. A comparison or judgement may be attempted but it will not successfully show an awareness of the key features of business behaviour or business situation. |
| Level 3 | 9-14 | Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context. Uses developed chains of reasoning, so that causes and/or consequences are complete, showing an understanding of the question. Arguments are well developed. Quantitative and/or qualitative information is introduced in an attempt to support judgements, a partial awareness of the validity and/or significance of competing arguments and may lead to a conclusion. |
| Level 4 | 15-20 | Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context. Uses well-developed and logical, coherent chains of reasoning, showing a range of causes and/or effect(s). Arguments are fully developed. Quantitative and/or qualitative information is/are used well to support judgements. A full awareness of the validity and significance of competing arguments/factors, leading to balanced comparisons, judgements and an effective conclusion that proposes a solution and/or recommendations. |