In business, trade offs are made all the time. A trade-off is a compromise between one thing and another. There has to be a trade-off or compromise between making a profit and being ethical so everyone is happy.
The problem for business is that acting ethically can be expensive, which conflicts with what shareholders and owners want – which is to keep costs low so as to maximise profit.
So there is a trade off between acting ethically and profitably.
Pressure groups – organisations set up to try to influence what consumers think about the business and its environment. Their activity can impact on the marketing mix of a business.
There are advantages and disadvantages for a business acting ethically.
better reputation = more sales
better worker relationships = more productive workers
possible Government subsidies
can charge higher prices
buying Fair Trade and paying fair wages = higher costs
higher prices might mean reduced sales
high cost of investing in ‘green’ machinery