Bachelor of General Studies (BGS) Degree Practice Exam

Which ethical principle relates to the concept of promoting fair trade practices?

1. Corporate governance

2. Environmental sustainability

3. Social responsibility

4. Profit maximization

The correct answer is: Social responsibility

The concept of promoting fair trade practices is closely associated with social responsibility, as it emphasizes the obligation of businesses and individuals to act in the best interests of society at large. Social responsibility encompasses the idea that organizations should operate ethically and contribute positively to the community by ensuring that their practices benefit not only shareholders but also broader societal goals, including fair wages, safe working conditions, and sustainable sourcing. Fair trade is a specific manifestation of social responsibility, where producers in developing countries receive equitable compensation for their goods, which facilitates better living standards and fosters sustainable development. This principle encourages businesses to consider the social and economic impacts of their operations while engaging in trade practices that prioritize fairness and justice. The other options, while relevant to various aspects of business ethics, do not specifically capture the essence of fair trade practices as effectively. For instance, corporate governance focuses on the systems that control and direct companies, environmental sustainability pertains to practices that ensure resource preservation for future generations, and profit maximization centers around the financial performance of an organization rather than its social impact. Thus, social responsibility stands out as the principle that directly aligns with promoting fair trade.