Ethical and Environmental Considerations

    OCR
    GCSE

    This study area examines the strategic tension between profit maximisation and wider obligations to society and the environment. Candidates must evaluate the shift from shareholder primacy to stakeholder theory, analysing how ethical audits, environmental legislation, and pressure group activity influence corporate strategy. Assessment focuses on the trade-offs between short-term compliance costs and long-term brand equity, requiring application to multinational supply chains and carbon footprint reduction strategies.

    5
    Objectives
    4
    Exam Tips
    3
    Pitfalls
    4
    Key Terms
    4
    Mark Points

    Learning Objectives

    What you need to know and understand

    • Definition of Finite vs. Renewable Resources
    • The concept of Externalities (Traffic congestion, Noise, Air pollution)
    • Role and methods of Pressure Groups (Lobbying, Boycotts, Viral marketing)
    • Fairtrade certification requirements and implications
    • The 'Trade-off' concept between ethics and profitability

    Example Examiner Feedback

    Real feedback patterns examiners use when marking

    • "You have identified an ethical issue, now analyse the specific financial consequence for this business."
    • "Avoid asserting that ethical behavior always leads to higher profit; acknowledge the time lag or initial investment required."
    • "Your evaluation needs a 'weighted judgment'—which factor is most critical to the business's survival and why?"
    • "Link the environmental consideration directly to the target market described in the case study."

    Marking Points

    Key points examiners look for in your answers

    • Award marks for explicit links between ethical sourcing and increased variable costs (e.g., Fairtrade premiums).
    • Credit analysis that connects environmental sustainability to Unique Selling Points (USPs) and brand differentiation.
    • Candidates must demonstrate how pressure group activity directly impacts revenue streams or operational continuity.
    • High-level responses must evaluate the significance of 'greenwashing' versus genuine sustainability in consumer decision-making.

    Examiner Tips

    Expert advice for maximising your marks

    • 💡When discussing environmental factors, categorize impacts into 'Internal' (costs, culture) and 'External' (reputation, legislation).
    • 💡In 'Evaluate' questions, structure the argument around the conflict: Short-term Cost vs. Long-term Profitability.
    • 💡Use the 'It depends on...' rule for evaluation: does the impact depend on the size of the business or the nature of the product?
    • 💡Ensure every point made is applied to the specific business in the case study (AO2) to access top bands.

    Common Mistakes

    Pitfalls to avoid in your exam answers

    • Conflating 'ethical' with 'legal' (e.g., stating that paying minimum wage is an ethical decision rather than a legal requirement).
    • Providing generic environmental impacts (e.g., 'saves the planet') without linking to business consequences like cost reduction or brand image.
    • Ignoring the specific context of the case study (e.g., suggesting a budget retailer raise prices for ethical reasons without considering price elasticity).

    Key Terminology

    Essential terms to know

    Likely Command Words

    How questions on this topic are typically asked

    State
    Explain
    Analyse
    Discuss
    Evaluate
    Recommend

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