Business ethics is refers to study of policies and practices of a business. It also refers to various factors related to an organisation operations and functions such as standard, behaviours of an individual and values as well as norms that guide activity which is conducted by a company (Kolk, 2016). If a company didn't follow business ethics, they may face issues and problems in conducting their business at marketplace. This report is based on two organisations that have faced some ethical issues, during expansion of businesses in global market- ASDA and Vodafone. Topics include in this report are meaning of ethics with examples, evaluation of ethical behaviours of organisation using theories. Along with this it explain ethical decision making process.
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1.1 Discuss what is meant by ethics in business with reference to three examples
Meaning of ethics:-
Ethics refers to the set of principles and policies which is adopted by a company for conducting business in effective manner. It also related to system, moral, theory, principles and values which guide a employees and employer of a company in conducting businesses in appropriate manner (Crane and Matten, 2016). It is important for business to adopt ethics in effective and efficient manner because it help them in various ways, some major of them are explain below:-
- When a company adopt ethics they able to attract customers which leads to enhancement in sales and profitability.
- If company work according to ethics employees feel satisfied and motivated, that lead to retention of employees for a long time and reduction of staff turnover. Along with this it will increase productivity of employees.
- This will also attract more candidates who want to work with business which reduce recruitment cost of company. Moreover they able to get talented employees.
- This will also attract investors and shareholders and keep share price of company at high.
- It will also provide competitive advancement for a business at a marketplace.
But when a company not adopt business ethics in effective and appropriate manner they face various issues which hamper business functions. Such as there will be reduction of production of employees this will reduce profitability of company. Along with this it will reduce customers bases and numbers of investors. According to different different authors meaning of ethics which is adopted at workplace is different (Weiss, 2014). Along with this there are various rules and principles to adopt ethics at company's workplace. Some of the major examples are given below according to different authors.
According to view point of Andrew Crane, ethics can be defined as study of situation, activities and decisions related to business where issues are issues of correct and incorrect is being addressed.
According to view point of Raymond C. Baumhart, ethics if related to business and its responsibilities. It is responsibilities of a business man that he/ she will not harm anyone by there knowingly.
According to Gaurav Akrani, there are various rules or principles of business ethics which help an organisation in conducting business in effective and appropriate manner (Weiss, 2014). By adopting these ethics principles company able to attract customers which leads to enhancing profitability and market shares. Some of the major principles are mentioned below:-
- Debar exploitation of customers and clients so that they become loyal towards company.
- Don't conduct any unhealthy and illegal activities only for the sake of earning more profit.
- Ensure accuracy of products and services so that customers get satisfy with goods. For which company can check accuracy of product quality, packaging, weight and many more.
- Pay taxes at proper times and conduct business operation and functions according to policies and government regulations.
- Do fair and proper treatments to employees so that they feel motivated and conduct there work in effective manner.
- Company must fulfil expectation and demand of customers in order to satisfy them and attract as well as encourage them for purchasing.
When a company take care of these rules, principles and regulations they able to conduct there business in effective manner. Along with this they also able to attract customers at high rate which enhance there profit.
1.2 Analyse an organisations ethical behaviour using Sethi’s typology and Mintzberg’s Conceptual Horseshoe
Mintzberg’s Conceptual Horseshoe:-
According to Mintzberg’s Conceptual Horseshoe model organization structure is divided into five part and which is responsible for any conducting activities that is for profit or not for profit motive. This factor includes various elements of an organisation such as industry norms, size, experience, culture, external forces like competitions, inflations, minimum wages, legalisations and many more (Lawrence and Weber, 2014). Explanation of five parts which is discussed in respective model are explained below:-
- Strategic Apex
This refers to most senior or higher level at an organisation. There peoples are chairman, CEO, Executes and non executive directors of a company. These peoples basically set objectives and goal which other employees has to follow to attain these objectives in effective manner. This level peoples or employees didn't deal with customers and suppliers of a company.
- Middle Line
These peoples are basically middle level employees who instruct lower level staff. These peoples conduct activities like design budget, receive report from management as well as accountant, monitor staff performance, develop actions according to requirement and many more (DesJardins and McCall, 2014). They take investment and financial decision of a company. Along with this they direct employees how to conduct work in effective manner.
- Operational Core
This department is refers to those who conduct and take care of day to day activities of an organisation. They generally deal with external stakeholder like suppliers and customers. These department workers are responsible for conducting work and task in effective and appropriate manner. They provide essential information which is required to develop budget and strategies. They help an organisation in attaining goal and objectives in effective and appropriate ways.
These are those employees who are not related or take part directly in decision making of budget or other financial related activities. They perform there work in effective manner in order to attain goal and objectives in efficient manner.
- Support Staff
This department peoples are least important for an organisation as there absence didn't affect company directly. There department are related to canteens, cleaning and maintenance. But this department help an organisation in conducting day to day activities in effective and appropriate manner.
Sethi’s typology is develop by Suresh P. Sethi and this will describe about the process of how to sales include in overtime which is related to advertising. In this rate of changes are mentioned which is of three type: react on advertisement which acts as positive at unsold section at the marketplace (Ruggie, 2013). Second is accruing of loss due to forgetting various competitive factors which is negative on sales section at market. Along with this third one is random effect which can be occur at any time or at any place.
1.3 Using two examples, analyse and evaluate the ethical decision making process within a business setting
The two business which have faced ethical issues while conducting there business are mentioned below and evaluation of how it will affect there decision making.
ASDA is a one of the leading retail supermarket which is established by Peter and Fred Asquith in 1947. Its headquarter is situated at ASDA house, South Bank, West Yorkshire, England. They are offering variety of products like grocery, general merchandise, financial services and many more. There are approx 1,65,000 employees are working in respective company. The working partner of ASDA is Walmart and ASDA promote itself by using slogan “ Save money. Live Better” (Stanwick and Stanwick, 2013). Respective company operating there business through approx 700 stores in United Kingdom. There are various competitors of respective company such as Tesco, Ocado, Waitrose, Hotfrog, ikart, aldi and many more.
Respective company have faced ethical issues while operating there business operations and functions in marketplace of United Kingdom. Issues which is face by company is that they are doing discrimination between men and women workers. According to article of BBC news, women workers of respective company claim that they are not getting equal payment as compare to men staffs. Even they both are working at same working profile, due to this female workers are feeling demotivated and disconnected towards the company (Asda faces mass legal action over equal pay for women,2019). The female staffs of respective company want that there higher authority take same actions or they want to complain about it on legal basis. In this process male staffs are also taking part and encouraging and motivating females workers to fight for there right. This issues is effecting decision making of manager and leaders of ASDA. Along with this respective company profitability ratio, market shares and employees productivity get decreased. To overcome this issues manger and leader of respective company adopt various laws and legalisations such as minimum wages, equality act and many more. By adopting these they get overcome form this issues and now employees are also treated on equal basis which motivate them.
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Vodafone is a British telecommunication company which is founded by Ernest Harrison and Gerry Whent in Year 1991. its headquarter is in London and registered office is in England, United Kingdom. Respective company serving there telecommunication service in worldwide market. Areas in which Vodafone is operating there business are like Asia, Africa, Europe and Oceania and many more. Overall they are operating there business in approx 25 countries and they have near about 47 partners network countries. There are also several products which is offer by respective company such as fixed line telephone, mobile phone, broad bands, internet television, digital television, IPTV and many mores.
Ethical issues which is face by this company when they are bringing up 3rdgeneration mobile technology (3 G) that is going to enhance speed of internet and phone call quality. This technology is also expanding sales of Vodafone and other companies. Ethical issues which they feel is that how to prevent there new technology of high speed data from getting hacked from internal or external hacker (Vodafone Issues, Risks and Opportunities, 2019). For this manger and leader of respective company adopt varies strategies for security of data and informations related to new technology which they are going to launch. Along with this they also develop several strategies, policies and rules related to respective issues and they also adopt new and advance security system to protect there data in effective and appropriate manner.
From above discussed point it can be concluded and evaluated that business ethics is essential for an organisation in order to attain goal and objectives in appropriate manner. It is responsibility of a manager and leader of a company to maintain business ethics at there workplace. This is so because by it they able to various benefits such as increase in customers bases and goodwill of a company. Along with this by adopting business ethics company able to attract and satisfy customers as well as employees in effective manner. This will directly and indirectly enhance productivity and profitability of a company in effective and appropriate manner.
Books and journals
- Kolk, A., 2016. The social responsibility of international business: From ethics and the environment to CSR and sustainable development.Journal of World Business.51(1). pp.23-34.
- Crane, A. and Matten, D., 2016.Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
- Weiss, J.W., 2014.Business ethics: A stakeholder and issues management approach. Berrett-Koehler Publishers.
- Lawrence, A.T. and Weber, J., 2014.Business and society: Stakeholders, ethics, public policy. Tata McGraw-Hill Education.
- DesJardins, J.R. and McCall, J.J., 2014.Contemporary issues in business ethics. Cengage Learning.
- Ruggie, J.G., 2013.Just Business: Multinational Corporations and Human Rights (Norton Global Ethics Series). WW Norton & Company.
- Stanwick, P. and Stanwick, S.D., 2013.Understanding business ethics. Sage.