← How a large business responds to external factors

Ethical practice and social media as external pressures

Confirmed in the 2022 paper as its own rotating category — a genuine ethical choice (like paying above minimum wage) and a technology/marketing channel (social media) each need their own prepared response.

Operating ethically, beyond the legal minimum

• An ethical practice (paying a living wage, sourcing sustainably, fair treatment of suppliers) goes ABOVE what the law strictly requires.
• It can impact profitability POSITIVELY: better staff retention and productivity, a stronger brand reputation, and customer willingness to pay more for ethically-made goods.
• It can impact profitability NEGATIVELY: higher direct costs (wages, sustainable materials) that squeeze margin unless recovered through pricing or volume.
• A full answer names BOTH directions with a specific mechanism for each, not just "ethics is good for business".

Social media and networking sites as a business tool

• ADVANTAGE: low-cost, targeted access to potential new customers, with real-time engagement and word-of-mouth style sharing that traditional advertising cannot match.
• DISADVANTAGE: reputational risk from public complaints or a poorly-received post, the ongoing staff time needed to manage it, and reliance on a platform the business does not control.
• The FUTURE impact (not just the immediate one) is often specifically asked for — state what continuing on this path looks like a few years out, not only the initial effect.

Worked example Justifying whether social media helps long-term sustainability Justify, with two reasons, whether using social networking sites will have a positive impact on the long-term economic sustainability of a furniture business. REASON 1: social media lets the business respond directly to changing customer trends (e.g. home-office furniture demand) faster and more cheaply than traditional advertising, keeping it relevant as demand shifts. REASON 2: the low ongoing cost compared to traditional advertising channels means the spend can be sustained over the long term without straining the business's finances, unlike a large one-off advertising campaign. ACKNOWLEDGE THE COUNTERWEIGHT: reputational risk from a single viral complaint could damage the brand built up over years — so the justification should note this risk is manageable with active moderation, not simply ignore it. ✓ Two independent reasons FOR the position, with an acknowledged risk addressed rather than ignored, is what separates a justify-level answer from a one-sided list of benefits. ✕

Treating "ethics" as only a cost, with no revenue-side benefit named

A common weak answer treats ethical practice purely as an added expense that reduces profit. A fuller answer names the REVENUE-SIDE benefit too — customers actively choosing to pay more, or stay loyal longer, specifically because of the ethical practice — so the net effect on profitability is a genuine trade-off to weigh, not a one-directional cost.

Other ethical practices worth having ready

• Fair treatment of suppliers (paying on time, fair contract terms) versus squeezing supplier margins for a lower cost.
• Transparent, honest marketing versus exaggerated or misleading claims that risk both legal action and reputational damage.
• Genuine diversity and inclusion in hiring versus a superficial policy with no actual change in practice.

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Ethics and legal compliance are related but distinct concepts

A practice can be entirely LEGAL while still being widely seen as unethical (e.g. paying the legal minimum wage while executives receive large bonuses), and conversely a business can go beyond legal requirements specifically to be seen as ethical. Keep the two concepts separate in an answer — do not treat "it is legal" as automatically the same as "it is ethical".

Practise just this