CH23Mindmap

Ch23 Ethical, Social & Environmental Responsibility โ€“ Gavin Duffy Business

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๐Ÿค Social Responsibility
Social Responsibility
The duty of a business to treat everyone it comes into contact with honestly and fairly, making a positive contribution to the environment it operates in.
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Responsibilities to Stakeholders
1. Investors
Honest and transparent financial reporting; provide a reasonable dividend; avoid excessive payments to senior management.
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2. Employees
Pay a fair wage; provide safe working conditions; respect proper working hours; adhere to employment law; treat with dignity.
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3. Customers
Be honest in advertising; provide goods of merchantable quality; deal with complaints fairly; provide adequate after-sales service.
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4. Suppliers
Honour contracts; pay promptly within agreed terms; use fair open tendering; do not put suppliers under duress.
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5. Government
Pay all taxes owed to Revenue in full and on time (PAYE, VAT, Corporation Tax); comply with all legislation; use grants as intended.
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๐ŸŒฟ Environmental Responsibility
Characteristics of an Environmentally Conscious Business
Seek Advice / Consult
Consult with stakeholders before introducing policies that might affect the environment โ€” seek expert advice from environmental agencies.
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Be Honest
Report all environmental accidents and breaches; take responsibility for negative impacts; do not cover up damage.
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Provide Training
Make staff aware of their environmental responsibilities through regular training; provide the resources needed to act sustainably.
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Open to Change
Willingness to update and adapt processes, packaging and practices โ€” e.g. switching to biodegradable packaging, investing in recycling.
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How to Operate Environmentally
Sustainable Development
Avoid overuse of non-renewable resources; source materials sustainably; use local suppliers to reduce carbon footprint.
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Use Renewable Energy
Switch from fossil fuels to solar, wind or other renewable energy โ€” reduces carbon emissions and long-term costs.
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Cleaner Production Methods
Reduce packaging, streamline processes to reduce waste; source more durable raw materials.
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Minimise Waste โ€” 4Rs
The 4Rs: Reduce, Reuse, Recycle and Recover โ€” systematically reduce waste and recover value from unavoidable waste.
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Importance of Being Environmentally Responsible
Cost Savings
Reducing waste and energy use lowers operating costs โ€” less packaging, lower energy bills, reduced landfill charges.
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Attract New Customers
Environmentally responsible practices attract consumers who prefer sustainable businesses โ€” becomes a USP.
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Good PR / Brand Image
Environmental responsibility improves reputation โ€” attracts investors, staff and customers who value sustainability.
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Comply with Regulation
Proactive management ensures compliance with environmental law โ€” avoiding fines, legal action and reputational damage.
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โš–๏ธ Business Ethics
Business Ethics
A set of moral rules and standards that provide guidelines for right and truthful behaviour in business situations with all stakeholders.
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How to Improve Business Ethics
Reward Whistle-blowing
Encourage staff to report unethical behaviour โ€” create an environment where doing the right thing is rewarded.
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Offer Training
Provide induction and regular reminder training on ethics โ€” ensuring all staff understand expectations.
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Discipline Poor Behaviour
Fine, demote or dismiss employees who breach ethical standards โ€” consequences must be clear.
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Establish a Code of Ethics
Create a formal written statement of expected moral behaviours for all staff โ€” clear standards and reference point.
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Ethical Audit
Appoint an external company to identify areas of unethical practice โ€” independent review finds issues management may miss.
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Highlight Role Models
Promote positive ethical behaviours shown by staff โ€” making good conduct visible encourages others.
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๐Ÿ“‹ Code of Ethics
Code of Ethics
A formal written statement drawn up by a business setting out expected moral behaviours โ€” provides norms guiding relationships with all stakeholders.
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Benefits
Benefits of a Code of Ethics
โ€ข Involves staff in decision-making
โ€ข Sets high standards for all to follow
โ€ข Improves reputation and brand image
โ€ข Creates clear rules and procedures
โ€ข Encourages whistle-blowing
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Challenges
Challenges of a Code of Ethics
โ€ข Difficult to change culture and norms
โ€ข Needs to be updated regularly
โ€ข No use unless enforced by management
โ€ข Training costs and time required
โ€ข Staff may see it as a critique of personal morals
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2025 Short Q6Outline two methods to encourage ethical business practice. (10)โ–ผ
Outline two methods a business may use to encourage ethical business practice. (10 marks)
โœ๏ธ Suggested Answer
Establish a Code of Ethics: Create a formal written statement setting out expected moral behaviours for all staff โ€” providing clear guidelines for ethical decision-making in dealings with stakeholders.
Reward whistle-blowing: Encourage staff to report unethical behaviour by creating a safe environment where doing the right thing is recognised and rewarded, reducing fraud and misconduct.
๐Ÿ“Œ Any two from: Code of ethics, whistle-blowing, training, discipline, ethical audit, role models. State the method (2 marks) then explain it (3 marks).
2024 Q2(C)Business ethics โ€” how to encourage employees to be ethical. (20)โ–ผ
(i) Explain the term business ethics. (5 marks โ€” 2+3)
(ii) Outline how a business may encourage their employees to be ethical. (15 marks โ€” 3@5(2+3))
โœ๏ธ Part (i)
Business ethics: The moral rules/standards/principles that help people to make ethical (right or wrong) choices in a business.
โœ๏ธ Part (ii) โ€” Three methods
Code of Ethics: Draft a formal written statement setting out expected behaviour in dealings with stakeholders. This provides a clear reference point for ethical decision-making.
Staff Training: Present the code at induction training and include reminder modules on ethical behaviour in ongoing development โ€” ensuring all staff understand and can apply ethical standards.
Ethical Audit: An independent outsider examines all aspects of the business โ€” how it's managed, where it buys materials โ€” then sends a report highlighting areas to improve and steps to address unethical practices.
๐Ÿ“Œ MS: 2+3 per method. State the method name (2 marks) then explain what it involves and how it works (3 marks). The 2024 MS also accepted: management lead by example, rewards/disciplinary procedures, encourage whistle-blowing.
2023 Q2(C)Characteristics of an environmentally responsible business. (20)โ–ผ
Discuss the characteristics of an environmentally responsible business. (20 marks โ€” 4ร—5)
โœ๏ธ Suggested Answer โ€” 4 Characteristics
Consult / Seek Advice: Consults with stakeholders before introducing policies that might affect the environment โ€” seeks expert advice from environmental agencies.
Be Honest: Does not cover up environmental accidents or breaches โ€” reports incidents, takes responsibility and acts transparently.
Provide Training: Makes staff aware of their environmental responsibilities through regular training and provides resources to act sustainably.
Open to Change: Demonstrates willingness to update processes, packaging and production methods in line with environmental best practices โ€” e.g. the 4Rs.
๐Ÿ“Œ Discuss = State + Expand. Four well-explained characteristics earn full marks. These four headings come directly from the workpack quicklist.
2019 Q2(A)Importance of being environmentally responsible + two measures. Dough Bros. (25)โ–ผ
(i) Discuss the importance for a business of being environmentally responsible. (15 marks)
(ii) Outline two measures a business could consider to become more environmentally responsible. (10 marks)
โœ๏ธ Part (i) โ€” Three reasons
Cost savings: Reducing waste and energy use lowers operating costs โ€” less packaging material, lower energy bills, reduced landfill charges.
Attract customers / Good PR: Sustainable practices set the business apart from competitors and attract environmentally conscious consumers โ€” becoming a USP.
Comply with regulation: Proactive management ensures compliance with environmental legislation, avoiding fines and legal action.
โœ๏ธ Part (ii) โ€” Two measures
Use renewable energy: Install solar panels or switch to a renewable provider โ€” reducing carbon footprint and long-term energy costs.
Environmental audit: Commission an independent audit to identify areas of negative environmental impact and systematically reduce them.
๐Ÿ“Œ Part (ii) says "other than the measure above" โ€” don't repeat what's in the passage. When a business is named, apply your points to them specifically for the application mark.
2017 Q2(B)Code of ethics โ€” explain + benefits/challenges. (20)โ–ผ
(i) Explain the term code of ethics. (5 marks)
(ii) Outline the benefits and challenges for a business of introducing a code of ethics. (15 marks โ€” at least one of each)
โœ๏ธ Definition
Code of ethics: A formal written statement drawn up by a business setting out expected moral behaviours โ€” provides norms guiding relationships with stakeholders.
โœ๏ธ Benefits
Improves reputation: Displaying and adhering to a code builds a positive public image โ€” creating customer loyalty and attracting quality employees.
Encourages whistle-blowing: May include a clause encouraging staff to report unethical behaviour โ€” creating an environment where wrongdoing is reported, not hidden.
โœ๏ธ Challenges
Difficult to change culture: Newly implemented codes may not immediately gain respect or support of staff โ€” may be seen as a critique of personal morals.
No use unless enforced: Senior management must "walk the talk". Must be updated regularly to cover new behaviours (e.g. social media use) or it becomes outdated.
๐Ÿ“Œ "At least one of each required." Always give at least one benefit AND one challenge โ€” even if you have more of one type.
2016 Q2(C)Social responsibilities to any four stakeholders. (20)โ–ผ
Discuss the social responsibilities of a business to any four stakeholders. (20 marks โ€” 4ร—5)
โœ๏ธ Suggested Answer
Employees: Pay a fair wage and provide safe working conditions in compliance with employment law. Treat with dignity โ€” excessive hours or unsafe conditions represent a failure of social responsibility.
Customers: Be honest in advertising and provide quality goods. Deal with complaints fairly and provide adequate after-sales service.
Suppliers: Honour contracts and make prompt payments within agreed terms. Use fair open tendering โ€” not selecting suppliers based on personal relationships.
Government: Pay all taxes owed in full and on time. Comply with legislation and use government grants as intended.
๐Ÿ“Œ Each stakeholder needs: state the responsibility + explain what it means in practice. Adding what a breach would look like earns the explanation mark. Pick the four you know best.
๐Ÿ”ฅ HOT Social Responsibility to Stakeholders
The 2026 workpack lists this as a #1 must-know. Last asked as a full question in 2016 Q2(C) โ€” now 10 years ago. It also appeared as a 2022 ABQ(C) and 2013 ABQ(B). With 2023/2024/2025 focusing on environmental and ethics topics, a standalone social responsibility to stakeholders question is very overdue. Know all five stakeholders: investors, employees, customers, suppliers, government.
Last standalone Q: 2016 (10 years ago). Very strong candidate for 2026.
๐Ÿ”ฅ HOT Measures / Importance of Being Environmentally Responsible
The second must-know. Environmental responsibility was asked in 2023 Q2(C) (characteristics), 2020 Q2(A) (characteristics + impact), 2019 Q2(A) (importance + measures), and 2015 Q2(C) (how to operate). This topic appears every 1โ€“2 years. Know the 4 characteristics (consult, honest, train, open to change), the 4 methods (sustainable dev, renewable energy, cleaner production, 4Rs), and the 4 reasons for importance (cost savings, customers, PR, compliance).
Appears almost every year. 2023 asked characteristics. 2026 may ask importance or measures.
โšก WARM Business Ethics โ€” How to Encourage / Code of Ethics
Ethics was asked in 2025 Short Q6, 2024 Q2(C) (how to encourage ethical behaviour), 2017 Q2(B) (code of ethics benefits/challenges), and 2012 Q2(C). With ethics appearing in 2024 and 2025, it may not be the primary focus in 2026 โ€” but it could appear as a short question or as part of a combined question. Know the 6 methods to improve ethics and the code of ethics benefits/challenges.
Last long Q: 2024. Likely short Q or combined format in 2026.
โš ๏ธ No ABQ in Chapter 23
Ch23 is in Unit 6. The ABQ technique does NOT apply. However, social responsibility appeared in the 2022 ABQ(C) as a cross-chapter question โ€” so be prepared to discuss stakeholder responsibilities in a passage-based context.
๐ŸŽฏ The Three Pillars of Ch23
Ch23 has three distinct topic areas. The examiner will ask about ONE in any given year:
Pillar 1 โ€” Social Responsibility: Responsibilities to 5 stakeholders (investors, employees, customers, suppliers, government)

Pillar 2 โ€” Environmental Responsibility: Characteristics of an eco-conscious business, how to operate environmentally, importance of being environmentally responsible, the 4Rs

Pillar 3 โ€” Business Ethics: Definition, 6 ways to improve ethics, code of ethics (definition + benefits + challenges)
Know all three โ€” you cannot predict which one will appear. Social responsibility is the most overdue.
๐Ÿชค The "Other Than" Trap
Environmental questions often include a scenario and then ask for measures "other than the measure outlined above". If the passage mentions biodegradable packaging, do NOT use packaging reduction as your answer. Read the question stem carefully and offer different measures (e.g. renewable energy, environmental audit, the 4Rs).
๐Ÿ“‹ Code of Ethics โ€” Benefits AND Challenges Required
The 2017 Q2(B) MS states "at least one of each required". If you give only benefits without challenges (or vice versa), you cannot earn full marks. Always give a minimum of one of each.
Benefits: Improves reputation, sets high standards, encourages whistle-blowing, involves staff in decision-making, creates clear rules

Challenges: Hard to change culture, no use unless enforced, needs regular updating, training costs, staff may resist
๐Ÿ”‘ Keywords That Earn the Marks
honestly and fairlypositive contributionreasonable dividendfair wagesafe working conditionshonest in advertisingmerchantable qualityafter-sales servicehonour contractsfair open tenderingpay taxes on timeconsult stakeholdersreport accidentsstaff trainingopen to changesustainable developmentrenewable energy4Rscleaner productioncost savingsUSPcomply with regulationmoral rules and standardswhistle-blowingcode of ethicsethical auditrole modelswalk the talk