External environment illustration External environment theory

Ethics

Big businesses command a lot of power and are able to choose between working in a way that benefits only the owners, and in ways that can benefit local and global communities. While many firms operate to meet the needs of owners, there are others that function in a far more ethical way, often as abusiness strategy to gain an edge over competitors. Firms acting ethically carefully consider the implications of their actions in a wider context, both on the community and the environment.

Ethics, put simply, is about doing the right thing. Ethical behaviour, in terms of business, is when firms act in ways thatstakeholders would describe as fair and honest. Impact (is anybody affected/harmed by a decision) and fairness (will decision be considered fair by those affected) are both taken into consideration by managers when making ethical decisions.

For many owners, acting ethically reduces profits by increasing costs, be it labour or materials. The profits from acting ethically are often higher than firms that act out of self-interest. Other businesses have made ethics an important part of their companies, by targeting markets who don’t mind paying extra for ethically sourced/made food and goods.



Glossary »

Supporting Documents

These downloads will help to put external-environment theory into context using real world examples from real businesses.

Using sports marketing to engage with consumers
Kia Motors logo

Learn how Kia Motors used external-environment theory to prosper in the automotive industry by downloading our premium case study.

Innovation in infant nutrition
Cow & Gate logo

Learn how Cow & Gate employed external-environment theory to succeed in the food & drink industry by downloading our premium case study.

Leading a revolution in banking
Intelligent finance logo

Find out how Intelligent finance employed external-environment theory to prosper in the financial services industry by downloading our premium case study.

The use of the marketing mix in product launch
NIVEA  logo

Discover how NIVEA employed external-environment theory to prosper in the manufacturing industry by downloading our premium case study.

Protecting the marketing mix through intellectual property rights
Intellectual Property Office logo

Find out how Intellectual Property Office applied external-environment theory to succeed in the public sector industry by downloading our premium case study.

Newsletter

Subscribe to our newsletter for current business news including lesson plans and activity ideas.

Share this website