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Legal controls, environmental and ethical issues in businesses

Updated: Feb 22, 2022

As governments across the world declare and acknowledge the climate crisis the world is experiencing, legal controls, environmental and ethical issues become increasingly important.

Ethical issues in business

  1. Child labour is prevalent in many developing economies. While these practices are unlawful in developed countries, they may not be illegal in these countries. It is the social responsibility of businesses that operate in these countries to refrain from hiring children as workers.

  2. Low wages - Many multinational corporations choose to operate in developing economies to take advantage of low wages. To be socially responsible, these firms should ensure that the welfare and well-being of these employees are well provided.

  3. Environmental controls - Many developing economies have little legal controls on environmental preservation. As such, firms may take advantage of the lapse in legal requirements to operate as they will incur less cost in managing waste.

Developing countries rely on pressure groups to influence governments and businesses to change their detrimental business practices.


  1. Legal controls

  2. Pressure groups

  3. Developing economies


  1. The Managing Director thinks the new legal controls to protect the environment will be bad for business. Do you agree? Justify your answer. (6 marks) May/June 2019/11

  2. What is meant by ‘pressure group’? (2 marks) May/June 2019/13

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