Page 327 - Cambridge IGCSE Business Studies

25: Environmental and ethical issues

Overall, it is in the long-term interest and survival that a business acts
ethically. Although there is a cost involved initially, it pays off over time and

society as a whole is likely to benefit. For some businesses their failure to

follow ethical policies may bring unwelcome publicity, which can damage
their reputation.

CASE STUDY Garment industry in Bangladesh

Ethical issues in Bangladesh
Bangladesh has one of the largest garment The whole garment industry in Bangladesh
industries in the world that provides cheap has been criticised for its low pay, limited
clothing for major Western retailers. This rights given to workers and often danger-
is mainly due to its widespread low-cost ous working conditions in garment factories.
Some of the factories are also guilty of using
labour. child labour. The tough economic conditions
In April 2013, a signifi cant number of mean that child labour is widely accepted and
people died when a building collapsed very common in Bangladesh. Many families
outside the capital, Dhaka in Bangladesh rely on the money earned by their children
where workers made Western clothing. for survival. Also, employers often prefer to
Police said the owners of factories in the employ children because they are cheaper and
building had ignored warnings about considered to be more obedient than adults.
cracks appearing in the building. 325

Sources: Adapted from www.bbc.co.uk/news/world-asia-22476774 and
www.unicef.org/bangladesh/Child_labour.pdf

TASK
a Identify the unethical business practices mentioned in the extract above.
b Discuss whether the Western retailers are being ethical in buying from the garment factories in Bangladesh.
c How can Western retailers ensure that their suppliers are following ethical business practices?
d Explain why child labour is unethical.
e What steps can the government take to stop child labour?

TEST YOURSELF
1 Explain how business activity can impact the environment.
2 What is meant by an externality?
3 Why is it important to conduct cost-benefit analysis?
4 What is meant by sustainable development?
5 Why are ethics important in business decision-making?
6 What is a pressure group?
7 Discuss some legal controls that governments may use to control the impact of
business activity.