Operations: Ethical and Environmental

Watch this to unpick ‘compare’ questions on ethical and environmental matters for Higher Business (and the issues of a cheap face mask)

The Covid lockdowns of 2020 changed consumer behaviour in big ways.

For one thing, we all got crazy about home workouts. We were encouraged to do more daily exercise, and so sales of active wear skyrocketed. Across the land we were wearing our new kit and doing press ups with Joe Wicks.

We also bought laptops, web cams, headphones and more, by the million. Subscriptions to television networks boomed, as did online gaming. We bought more ready-meals, and, of course, we bought more face masks.

Well, so what? We bought this stuff because we needed it, right? Does it matter? Well, there are knock on implications aside from increasing the profits of some companies that are actually very important.

It is estimated that approximately one third of all non-medical face masks were made in sweat shops in developing countries. Eight of the top ten sports wear manufacturers in the UK use non-ethically sourced materials and labour. Most digital devices are made using resources such as cobalt, palladium and tin mined in countries that have devastating effects on the local environment.

Understanding businesses is not just about profit and loss; we need to also understand the Ethical and Environmental aspects, and be very clear about the difference between them.

Let’s find out more.

At Higher Business level you may see questions on ways in which organisations can operate ethically or in an environmentally friendly manner. You can also be asked to talk about the advantages and disadvantages of putting these operations in place. Notice that I said ‘or’ just now, and not ‘and’. A common pitfall here is that students think that ethical and environmental are the same thing. Or, when answering a question on ethical concerns, they lapse into writing about the environment instead.

So, let’s unpack the key difference. The operations unit is mainly about the physical production and manufacturing of goods. The term ethical relates to being morally correct or doing the right thing. If we combine these terms and refer to this as Ethical Operations then this means that businesses manufacture products in a morally correct manner. The term environmental refers to the physical environment; the world around us. The term Environmental Operations therefore, relates to the manufacturing of goods in a way which does not pollute or harm the Earth.

Unfortunately, a simple Google search will show you many examples of high profile businesses which you’ve probably been a customer of, I know I have, that have been accused of acting in an unethical manner at some point. Adidas, Nike, Tesco, DKNY, Ralph Lauren, Victoria’s Secret, even Marks and Spencer! The list goes on. The good news is that many of these firms have taken steps to address these issues.

So, what constitutes unethical behaviour? Well, this can be something like testing cosmetics or hygiene products on animals, but the more high profile issue you’re likely to have heard of is exploitation of cheap labour. Sometimes referred to as ‘sweatshops’.

Strictly speaking, from a business perspective, does it make sense to use cheap labour available in other countries? Sure it does, it cuts costs and therefore boosts profits. But is it morally correct? Absolutely not. At Higher level you’ll want to consider the wider impacts of this; possible media coverage, the public image of the business, the potential loss of customers and talented employees alike who may be strong believers in ethical actions. It might actually cost the business money in order to be ethical!

Let’s switch to Environmental Ops. Wouldn’t it be cool to have your Amazon parcel delivered to your back garden by a drone? Or have an Amazon robot roll up to your front door and you simply lift the parcel from there? These things are a reality. They have names; Amazon Prime Air and Amazon Scout and they’ve been tested in action successfully.

What this also means is that your Amazon parcel is not delivered by a diesel-powered van. So, it’s a cleaner method; better for the environment and it lowers the company’s carbon footprint. An attractive proposition for sure, but again let’s remember that at Higher you may be expected to highlight possible disadvantages too. The design, prototyping, and actual production of drones and Scout robots will come at a cost to the business.

This topic may lend well to winning those elusive development marks also. Considering the comment above, we could develop this further by saying something like this [on screen text 1]:

investment in the development of drones and the Scout may mean that company funds are diverted here rather than going towards improving employee facilities or even staff bonuses which may affect morale

There are so many ways that modern day businesses can operate environmentally friendly from recycling and using renewable energies, to simply minimizing the use of packaging, especially plastic.

A bit like ethical concerns, some of the above will again come at a cost to the business. If you really want to aim high when answering a question like this, imagine a business has a factory covered in solar panels which actually generate more energy than the factory needs – carbon negative. What can the business do with this ‘excess energy’? Big energy firms like Scottish Power may actually buy it from the business, thereby boosting their income! That’s a result all round.

Consumer patterns do have big implications, ethically and environmentally, and you need to know the difference and be able to talk about them in detail. Companies can choose to be more ethical and environmental, but both have an impact on their business model.

Next time there is a consumer rush, for home work out wear, laptops, facemasks, or something completely different, find time to reflect what this means beyond these businesses. Understanding this might just present the next business opportunity you have been looking for. What are you waiting for?