OxfordAQA IGCSE Business: Technology and Ethical and environmental considerations (9225)

This guide teaches sections 3.2.1 Technology and 3.2.2 Ethical and environmental considerations of the OxfordAQA International GCSE Business (9225) specification, version 3.1, first teaching September 2020 and first examined May/June 2022. Both sit in section 3.2, Influences on business, which the specification says is assessed on both written papers. Use it with the revision notes and the practice questions. The wider topic is in the Influences on business study guide, revision notes and practice set. Course links: the OxfordAQA IGCSE Business hub, the checklist and the free diagnostics.

What you need to cover

Section	Content point	Skill needed
3.2.1	Impact of changing use of ICT	Explain how Information and Communication Technology influences business activity
3.2.1	e-Commerce	Explain how it gives access to wider markets
3.2.1	Digital communication	Explain its use with stakeholders, with examples such as email and video conferencing
3.2.2	Ethical considerations	Identify and analyse trade-offs between ethics and profit; know that ethical behaviour means behaving in a manner stakeholders judge fair and honest, including religious observance and charitable giving; give examples, benefits and drawbacks
3.2.2	Environmental considerations	Explain why society and consumers expect more environmental responsibility; weigh costs and benefits; the named areas are traffic congestion, recycling, waste disposal, noise pollution and air pollution
3.2.2	Sustainability	Identify and analyse trade-offs between sustainability and profit; cover global warming and using scarce resources

3.2.1 Technology

ICT and business activity

ICT stands for Information and Communication Technology. The specification asks you to understand how the shifting use of ICT affects what a business does. “Changing use” is the key phrase: the same business does different things as technology develops. Think about which activity changes, then what happens to cost, revenue or customers.

• Selling: orders can be taken on a website or app as well as in a shop.
• Buying: suppliers can be contacted and orders placed online.
• Staff roles: some jobs shrink while others, such as running the website, appear. Staff may need training.
• Costs: equipment, software, security and training cost money. Savings can come later, for example on printing, postage or travel.

Link the change to an outcome: “a website lets customers order outside opening hours, which raises sales” is analysis; “a business uses a website” is not.

e-Commerce and wider markets

e-Commerce means buying and selling goods and services over the internet. The specification wants you to know how a business uses it to access wider markets. A shop reaches customers who can walk in. A website reaches anyone with a connection and a delivery address, in another town or another country.

Advantages for the business:

• A larger customer base, so more potential sales.
• Selling at any time of day without paying staff to stand in a shop.

Drawbacks:

• Delivery, packaging and returns cost money.
• Website, payment and security systems cost money to build and maintain.
• Customers cannot touch the product, so some will not buy.
• Some sales may simply move from the shop to the website, so revenue does not rise by the full amount of the online sales.

Worked example 1: opening an online shop (calculation). Windlow Pottery sells hand-made mugs and bowls from one shop. Monthly sales revenue is £18,000. After launching a website, monthly sales revenue from the shop falls to £16,500 and online sales are £9,600. Cost of sales is 40% of sales revenue. The website and courier costs add £3,300 a month. Is the website worth keeping?

1. Total sales revenue now = 16,500 + 9,600 = £26,100.
2. Change in sales revenue = 26,100 - 18,000 = £8,100.
3. Percentage change = 8,100 ÷ 18,000 × 100 = 45%.
4. Online share of total revenue = 9,600 ÷ 26,100 × 100 = 36.8% (1 d.p.).
5. Extra gross profit = 8,100 × 60% = £4,860, because 60% of each extra pound is left after cost of sales.
6. Extra profit after the new costs = 4,860 - 3,300 = £1,560 a month.

The website raises monthly profit, but by much less than the 45% rise in revenue suggests. The shop lost £1,500, so the gain is £8,100, not £9,600: sales moved across.

Digital communication with stakeholders

Stakeholders are the groups with an interest in a business: owners, employees, customers, suppliers, lenders, the local community. Digital communication means using electronic channels to share information with them. The specification expects you to know relevant examples, such as email and video conferencing.

Method	Typical stakeholder	Benefit	Drawback
Email	Suppliers, customers, staff	Cheap, fast, creates a written record, can reach many people at once	Can be ignored or go unread; tone is easy to misjudge; no immediate answer
Video conferencing	Staff in different sites, overseas suppliers, lenders	Saves travel time and cost; people see each other and can share documents	Needs good internet and equipment; technical faults; less personal than meeting in person
Business website or social media	Customers, local community	Shares news and answers questions around the clock	Needs updating; negative comments are public

Choose the method to fit the stakeholder and the message. Telling 200 customers about a closure date suits email. A tense negotiation with a supplier abroad may suit video conferencing, because tone and expression matter.

Worked example 2: video conferencing (calculation). Elmswick Candles makes four trips a month to meet a wax supplier, at £85 per trip in travel costs. It switches to video meetings costing £29 a month for the software.

1. Monthly travel cost saved = 4 × 85 = £340.
2. Net monthly saving = 340 - 29 = £311.
3. Annual saving = 311 × 12 = £3,732.

The saving is real, but the owner should also weigh the loss of face-to-face contact with a key supplier.

3.2.2 Ethical and environmental considerations

Ethical considerations

The specification says ethical behaviour expects a business to behave so that its stakeholders regard it as both fair and honest. It names religious observance and charitable giving as part of this. Ethics is a choice about how to behave. It is different from obeying the law, which is not optional.

Examples you can use:

• Paying suppliers a fair price and on time.
• Honest advertising and labelling, with no false claims.
• Treating employees fairly, including allowing time for prayer or religious festivals where this can be arranged.
• Giving a share of profit or time to charity.
• Being open with customers about faults or problems.

Benefits of ethical behaviour:

• Customers who value fairness may buy more and stay loyal.
• Good reputation, which helps recruit staff.
• Better relationships with suppliers, who may offer better terms.

Drawbacks:

• It often raises costs, so profit per unit falls.
• Competitors who ignore ethics may charge lower prices.
• Charity giving or religious observance may reduce money or hours available.

The trade-off between ethics and profit. The specification asks you to identify and analyse cases where there may be a trade-off. Use four steps: name the ethical choice, say what it costs, say what benefit may follow, then judge which matters more for this business.

Worked example 3: paying farmers more (calculation). Drayton Loaf Co. bakes and sells 5,000 loaves a month at £2.50. Flour costs £0.40 a loaf and other variable costs are £0.90 a loaf. Fixed costs are £4,500 a month. The owner considers paying her farmers a fairer price, which would raise flour cost to £0.46 a loaf.

1. Profit now = 5,000 × (2.50 - 1.30) - 4,500 = £1,500.
2. New variable cost = 0.46 + 0.90 = £1.36 a loaf.
3. Profit after = 5,000 × (2.50 - 1.36) - 4,500 = £1,200.
4. Fall in profit = 300 ÷ 1,500 × 100 = 20%.
5. New contribution per loaf = 2.50 - 1.36 = £1.14.
6. Extra loaves needed to restore the £300 = 300 ÷ 1.14 = 263.2, so 264 loaves, a rise of 5.3% on current sales.

Judgement: a 20% fall in profit is large, but about 5% more sales would repay it. The decision depends on whether customers will notice and care.

Environmental considerations

The specification says you should understand how society and consumers expect greater environmental responsibility in businesses’ decision-making, and the costs and benefits of behaving this way. The named areas are below.

Area	The problem	What a business can do
Traffic congestion	Delivery vehicles and customer cars block local roads and annoy residents	Plan fewer, fuller deliveries; deliver outside rush hours; encourage car sharing
Recycling	Materials thrown away are lost and must be replaced	Use recycled materials and packaging; sort waste; take back used products
Disposing of waste	Rubbish costs money to remove and can harm land and water	Reduce waste at source; treat harmful waste properly
Noise pollution	Machines and vehicles disturb neighbours and workers	Insulate buildings; limit noisy work to set hours
Air pollution	Fumes and dust harm health and the local area	Use cleaner vehicles and fuels; fit filters

Costs of acting responsibly: new equipment, dearer recycled inputs, staff training, slower delivery. Benefits: a better reputation, customers who prefer green products, lower waste costs and fewer neighbour complaints.

Worked example 4: switching to recycled paper (calculation). Vessmore Print Works spends £48,000 a year on paper. Recycled paper costs 12% more. Sorting offcuts for recycling cuts waste disposal bills by £1,900 a year. Annual profit is £62,000.

1. Extra paper cost = 48,000 × 0.12 = £5,760.
2. Net extra cost = 5,760 - 1,900 = £3,860.
3. As a share of profit = 3,860 ÷ 62,000 × 100 = 6.2% (1 d.p.).

The net cost is modest. If it wins a contract with a customer who requires recycled stock, the decision is easy to justify.

Sustainability

The specification gives no definition. In the usual textbook sense, sustainability means a business operates so that today’s demand is served without leaving later generations short of what they will need. For business, it means using resources and operating in ways that can continue over time. The specification names two ideas.

• Global warming: burning fossil fuels in factories, vehicles and heating releases gases that warm the planet. Society expects businesses to cut their emissions, for example by using renewable energy.
• Using scarce resources: some materials, such as certain metals, fuels and clean water, are limited. Using them quickly raises future costs and may eventually run them out.

The trade-off between sustainability and profit often has a time dimension. Spending now cuts profit now, while savings or reputation arrive later.

Worked example 5: solar panels (calculation). Rushvale Tiles considers fitting solar panels to its factory roof for £30,000. They would cut electricity bills by £7,500 a year.

1. Payback = 30,000 ÷ 7,500 = 4.0 years.
2. If the panels last 10 years, savings = 7,500 × 10 = £75,000.
3. Net gain over their life = 75,000 - 30,000 = £45,000.

Profit falls in the year of purchase if paid from cash, but emissions and later costs fall. The owner must be confident the panels will last.

How to write an analysis or evaluation answer

1. Make a point, such as “this raises costs”, and explain why using the case details.
2. State the effect on a stakeholder or on profit.
3. For evaluation, give the other side, then reach a judgement that depends on something in the case, such as the size of the cost, the type of customer, or the time scale.

Common errors

• Describing a technology without saying how it changes sales, costs or stakeholders.
• Treating e-commerce as only a benefit and missing delivery cost.
• Mixing up ethics (a choice) with legal duties.
• Saying ethical behaviour always increases profit. It often does not, at least at first.
• Listing environmental issues without a cost and a benefit for the business.

Frequently asked questions

What is the trade-off between ethics and profit? Ethical choices such as paying suppliers more often raise costs and cut profit per unit, but they may bring loyalty, a better reputation and more sales. Weigh the cost against the likely benefit for the specific business before reaching a judgement.

How does sustainability affect profit over time? The trade-off between sustainability and profit often has a time dimension. Spending now cuts profit now, while savings or reputation benefits arrive later.

What two sustainability ideas does the 9225 specification name? The two ideas are global warming, caused by burning fossil fuels in factories, vehicles and heating, and the use of scarce resources such as certain metals, fuels and clean water.

How should a business choose a digital communication method? Choose the method to fit the stakeholder and the message. Telling many customers about a closure date suits email, while a tense negotiation with a supplier abroad may suit video conferencing, because tone and expression matter.

What are the drawbacks of e-commerce for a business? Delivery, packaging and returns cost money, website, payment and security systems cost money to build and maintain, and customers cannot touch the product. Some sales may also simply move from the shop to the website, so revenue does not rise by the full amount of online sales.

Next steps

Try the practice questions, then a free diagnostic.

Official syllabus

OxfordAQA International GCSE Business (9225) specification, version 3.1, for International GCSE exams May/June 2022 onwards, published by OxfordAQA. Sections 3.2.1 and 3.2.2.