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Ethics concern an individual’s moral judgements about right and wrong. Decisions taken within an organisation may be made by individuals or groups, but whoever makes them will be influenced by the culture of the company. The decision to behave ethically is a moral one; employees must decide what they think is the right course of action. This may involve rejecting the route that would lead to the biggest short-term profit.
Aims and functions of the production department
Production is the functional area responsible for turning inputs into finished outputs through a series of production processes. The Production Manager is responsible for making sure that raw materials are provided and made into finished goods effectively. He or she must make sure that work is carried out smoothly, and must supervise procedures for making work more efficient and more enjoyable.
The demand for a product is the quantity that buyers will be willing to purchase at a given price. The supply of a good is the quantity that suppliers will be willing to bring to the market at given prices.
The product life cycle is the period over which it appeals to customers. The sales performance of any product rises from nothing when the product is introduced to the market, reaches a peak and then declines to nothing again.
The product life cycle can be further broken down into distinct stages. Sales grow slowly at the introduction stage when a product is new on the market and there is only a limited awareness of its existence. Sales then grow rapidly during the period of growth. It is now that competitors enter the market and promote their own products.
Reasons for regulating business activity
Regulation means providing rules and frameworks for business and other activities. Some aspects of business activity are self-regulating – for example, the Advertising Standards Authority provides a voluntary code of practice for the regulation of advertising in this country.
However, in many areas, it is important to establish some form of compulsory regulation backed up by legal sanctions such as fines, and even prison sentences for directors (and employees) for malpractice.
Today we are bound by European Union regulations which are directly binding on all Member States without the need for national legislation to put them in place.
Regulation takes place:
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to guarantee minimum standards e.g. of consumer protection, health and safety at work etc
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to protect the weak against the strong e.g. small companies against larger companies or groups of companies that work together to fix prices
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to provide benchmarks of good practice for businesses to set as minimum standards
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to provide an appropriate framework for ethical business behaviour
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to create standards where none exist.
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In a number of industries that were formerly under government control, regulators have been appointed to make sure that prices are fair, and that there are no restrictive practices carried out by the newly privatised businesses that operate in these markets e.g. OFWAT is the official regulator for the water industry.
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