In the age of competitive business environment, particular attention must be paid to ethical and moral features of the organization. Undoubtedly, business and moral values are inseparably linked. However, there are many different definitions of both ethics and business ethics in common usage. This essay will mainly discuss the role of ethics in business and managerial practices. In addition, it will also highlight the importance of dealing with ethical issues and creating an ethical workplace in the supermarket industry.
Nature of ethics
One of the definition of ethics is as follows: "Ethics is concerned with the study of morality: practices and activities that are considered to be importantly right or wrong, together with the rules that govern those activities relate." (Deming, 1993, citied in Laurie J. Mullins 2005). Ethics is a general term that defines how people should distinct between right and wrong and how they should define their moral judgments.
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Another definition emphasizes the suitability of one's actions in relation to other people and their privileges. "Ethics refers to appropriateness of your behavior in relation to the rights of those who become the subject of your work, or are affected by it." ( Mark Saunders, Philip Lewis, Adrian Thornhill, research Methods for Business Students, Fourth Edition 2007, Chapter 6. Negotiating access and research ethics, 6.4 Research ethics, page 178, Prentice Hall, Financial Timeâ€¦) It is evident that each human being has an individual's set of value that is very complex and
In ethics people must rely on facts gained through experience to justify information about themselves. Not only does morality involve action but it also involves thoughts and attitudes. Having said that, values are a combination of cognitive and emotive factors. (Theory of knowledge)
The matter of ethics in business practices
Ethics in business can be perceived as an example of applied ethics. As previously mentioned, ethical issues and business practices are interconnected and dependent on each other. Nowadays all different kinds of values such as shared values, value driven, corporate values, professional ethics and managerial ethics are pressing on the organizations. ( Griseri, 1998 ) One of the definition of ethics stresses the importance of the position of the human being in the corporation and his moral values in relation to the working environment. "Ethics is one part of the business that is related to absolute standards and moral principles within company. It is concerned with human character and conduct, the distinction between right and wrong and the absolute duties and obligations that exist in all situations."(Pettinger, 2000).
There are three levels of ethical issues concerning business and public sector organizations. Matters concerning the role of international business are placed at the macro level. Nevertheless, conducting business in the international area is a very complex task. Different cultures usually have different ethical standards. There are two different approaches to this problem. Firstly, "ethical imperialism says that while doing business with other country the ethical beliefs should be imposed in that country." ( Greenberg, Baron, )
Imposing ethical standards on countries that had made already their own judgments is an ethically questionable issue. This approach emphasizes the presence of only one set of values and what is different than commonly known ethical standards is considered wrong.
Contrary to the ethical imperialism, there is also ethical relativism that is a belief higlihting the no culture's ethics are better than any other's and there are no internationally acceptable standards of right and wrong. In fact, such way of thinking may lead to moral disobedience (Greenberg)
At the corporate level, issues are connected with corporate social responsibility The behavior and the performance of the individual is rozpatrywany at the individual level (Richard)
Measures of ethical performance in business practices
There are several important issues and elements, such as social, economic and environmental matters, that should be taken into consideration when measuring ethical performance of the given company. One of the most important social issues is whether a good relationship with employees, stakeholders, consumers and importers ( especially the Third World importers ) is sustained or not. There are also other problems that managers should consider. Does bullying and emotional abuse occur in the workplace ? What is an attitude towards staff and what are the obligations? Managers should always take control all The totality of organizational attitudes, values and beliefs, values and beliefs, the ways in which they are applied, with emphasis on equality and fairness of treatment, conduct of disputes and grievances, and the attitudes of management and staff.
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When it comes to the economy, an attitude to money and finance is a key point . Does the salary accurately reflect how much effort is put in work? Do the managers pay salary and rewards on time? In fact, in case of redundancy the company is usually obliged to pay statutory redundancy pay if people have worked for their employer for at least two years. The amount is calculated based on their weekly pay, age and continuous employment with the employer.(http://www.direct.gov.uk/en/Employment/RedundancyAndLeavingYourJob/Redundancy/DG_10029836)
When it comes to the environmental issues, not only does resource utilization raise the controversy nowadays but also the use of materials is an important issue when it comes to environment. It is worth mentioning that there is a growing interest in business ethics as a consequence of immoral behavior during last few years. The public's acceptance of unethical acceptance have changed and nowadays the standards are higher ( Eugene McKenna) Despite all the attention that have been recently paid to ethical issues, ethical scandals are very commonplace. One of the most popular unethical actions during last years was Jerome Kerviel. He is a is a FrenchÂ traderÂ who has a pending appeal of his conviction in theÂ January 2008 Société Générale trading loss incidentÂ forÂ breach of trust,Â forgeryÂ and unauthorized use of the bank's computers, resulting in losses valued atâ‚¬4.9Â billion. the economicts artcle.
Being ethical versus being unethical in business
Undoubtedly, setting up the fully ethical company is not an easy task. Nevertheless, there are some organizations in the world that strive for ethical perfection. The Ethisphere Institute in New York City releases annually a list of World's Most Ethical Companies. These companies have got at least 100 employees and their annual profit reaches million dollars. The data was collected basing on previous organization's projects and their initiatives. The stress was put on workforce sustainability, ethical values and good scheme for the future. The most ethical companies are Adobe System, Ford Motor Company and Starbucks. As it is evident, all of these companies produce different products. It proves the theory that it is possible to be ethical no matter what company you run. http://www.forbes.com/2010/03/22/ethisphere-ethical-companies-leadership-citizenship-100.html
One of the main features that ethical company must possess is a good customer care. After many years of struggling and having problems with complaining customers, Swedish operator Stena Line implemented a scheme that monitors all of customers needs and their complaints. If people have any complaint in respect of services provided by Stena Line they can inform the management on the spot. In addition, Stena Line presents clear and fair terms of business available online for every customer. The result of this ethical policy is very successful as now Stena Line company.
On the other hand there are many factors that encourage unethical behavior. Being unethical in organizational practices is very usual, as such actions happen on regular basis and many managers take it for granted or even promote such practices. Practices implemented in business that are contrary to ethical standards are known as organizational counter-norms. For instance, one of the societal norms of ethics is taking responsibility for your actions. It is generally dictated that it is appropriate to be in charge . On the other hand, the opposite practice. Following the rules at all costs is another norms of ethics but in most cases . One of the prevailing societal norms of ethical is following the rules at all costs. Within organizations, however, it's often recommendable and desirable to do whatever it takes to get the job done, against all odds. There are many organizational counter-norms that promote unethical behavior.
One of the other reason why immoral organizational behavior occurs is stonewalling. The act of stonewalling is popularly known as hiding relevant information. BP p.l.c, the fourth largest global oil and gas company in the world was accused by drilling company of stonewalling relating to the last oil drill. It was said that BP was hiding information intentionally to prevent people from investigating the origin of the incident. http://money.cnn.com/2010/08/19/news/companies/transocean_bp/index.htm
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Thirdly, managers develop some ways of thinking that promote unethical behavior. One of the perspective suggests that "anything is right if the public can be convinced that it's right". This way of thinking is known as Madison Avenue mentality and is based on hiding unethical actions or justifying them and them as completely normal. (Chapter twelve). Enron Corporation is one of the world's leading electricity companies based in Texas. Company officials were charged with creating fake partnerships that allowed managers to shift debt off the books. It was said that anyone who could not understand the practices of this corporation
Many managers would go to any lengths in their pursuit for staying profitable. Managers usually rationalize that their action are ethical and the benefit for their corporations will be outstanding. This kind of interesting perspective that encourages an ethical behavior is the bottom line mentality
The profit motive is generally accepted, of the main motives in business is becoming profitable. People should not accept it as an excuse to for ignoring, not obeying the basic standards of being good. With increasing urgency, market and social forces are rewriting the roles and responsibilities of business as well. One ( zrodlo)
The obvious conclusion to be drawn from these facts is that one of the most important issues is that business owners have learned that a business ethics program, when implemented, helps owners and managers make profits, improve their business performance and contribute to economic progress. Still, there are some companies that prefer acting unethically as it is People think that being profitable requires being unethical and in most cases it is not true. Now we should take a look Positive relationship with a customer can be built on basis . Consequences of illegal actions are not usually realized until much later than when the act is committed. Although an organization can make an immediate profit by convincing others that they have behaved appropriately. But from a long-distant perspective it is not the best option for the company to follow this way.
Supermarket industry as an example of applied business ethics
Having presented the role of ethics in business, it is worth to discuss the supermarket industry as a one of the examples of applied business ethics. What is a supermarket? According to Merriam-Webster dictionary, "Supermarket is a self-service retail market selling especially foods and household merchandise." It offers a wide variety of products such as foodÂ and householdÂ merchandise. The stores are usually organized into departments. "http://www.merriam-webster.com/dictionary/supermarket.
The UK supermarket industry
One of the most powerful supermarkets in the UK is Tesco p.l.c. Founded in 1919, it is now the second largest retailer in the world measured by profits. ItÂ is a global grocery rapidly heading for a 30 percent of share of the UK grocery retail market, having nearly 2000 stores in the UK. Not only is Tesco popular in the UK but it is also reaching such countries as Poland or Japan. In order to expand its business, Tesco opens both convenience shops and Express stores. As a result, Tesco is now more prominent on the high street. Because of the rapid rise of the supermarket industry around the world Tesco has to overcome many problems connected with ethical pressures facing on it.
Treatment of the overseas workers has raised a criticism, as it is in its interest to sustain a good relation with its suppliers. Workers in the third world face horrendous condition and earn far below the living average. However, The exploitation of workers' responsibility for compliance Treatment of the overseas workers is represented as a problem because the code does nothing to prevent unjust trading relationship between Tesco and a supplier that compromises its commitment to ethical practices. According to Oxfam, the organization â€¦. , ethical pressures on South African fruit, tea and wine suppliers include being paid below the cost of production and having pay for promotions. Women working on the farms usually become seasonal workers even though they are on contracts to work 8-11 months a year, working 11 hours a day. Tesco with its market-leading position has power to push down prices. The prize is usually below cost of production, paying poverty wages and exposing women to unethical working and living condition. It is worth mentioning that favouring imports over British produce is also considered as unethical. Because of that some of UK farmers are on the brink of bankruptcy while overseas suppliers receive very low wages in the same time. It is ethically questionable.
Treatment of the workers
When it comes to working in Tesco, it is usually a low-paid job that demanding physical challenge. Industry is faced with continuous pressure to downsize and restructure to sustain competiveness in an increasingly global economy. Working conditions for many of these labourers have been
Demanding slotting fees
One of the common ethical pressures facing the major-brand supermarkets is demanding slotting fees from suppliers. "Slotting fee is a sumÂ paidÂ by aÂ vendorÂ orÂ manufacturerÂ to aÂ retailÂ chainÂ orÂ establishmentÂ for making room for a product on itsÂ storeÂ shelves". http://www.businessdictionary.com/definition/slotting-fee.html It is one of the most ethically questionable issues whether paying fees to retailers for the display to pay and sale of their products has become common practice is a bribery or just a plain competition.
Fair trade in Tesco
The definition of the fair trade is as follows: "A fair trade is a system of trade in which workers receive living wages and employment opportunities for the goods they produce. This system serves as an alternative approach to conventional international trade for producers who are typically economically disadvantaged artisans and farmers from developing countries." (http://www.sustainabilitydictionary.com/f/fair_trade_fairtrade.php) In fact, Tesco has the largest range of fair trade goods in the country
Import of fair trade's roses from Kenya rose criticism among member of Friends of the Earth. One of ethically questionable matters is the overtime The tension between the usual fair trades standards and
Tesco and the environment
Undoubtedly, Tesco contributes to environmental damage. Its stores are energy efficient, especially when it comes retail or light sector.
An interesting concept related to carbon footprints is that of "food miles" means the distance food travels from where it is grown to where it is ultimately purchased or consumed by the end user. The more food miles that attach to a given food, the less sustainable and the less environmentally desirable that food is. The term food miles has become part of the vernacular among food system professionals when describing the farm to consumer pathways of food. http://www.gdrc.org/uem/footprints/food-miles.html
Tesco transports millions of tones of food and non-food products using different means of transport. It heavily contributes to climate change resulting in 22 percent of total greenhouse gas emission in the United Kingdom.
Thirdly, Tesco generates a huge amount of packing waste, much of it is plastic which only about 7 percent is recycled in UK. Undoubtedly, another problem is a food waste. A single store may spend 10 000 pounds a week getting rid of food waste.
Another ethically questionable mater is connected with pesticide and organic food. Tesco claims that the usage of pesticides is kept to minimum. Yet still the profit motive is the most important issue and the organization overprices organic food. They are usually 50 percent more expensive. Organic foods are foods that are grown without synthetic chemical pesticides or fertilizers: consumers who buy organic are looking to avoid dietary ingestion of such chemicals. (http://www.trustyguides.com/healthy-eating8.html )
Selling products with dangerous chemicals
According to the latest news, Tesco is now selling products with dangerous chemicals such as carcinogenic, mutagenic and other toxic substances. An European consumer group revealed that there are were products containing "substances of very high concern" which are very dangerous for human beings. The items such as such as earphones, shoes, pencil cases, erasers and bath toys contained an SVHC. They were also found in tablecloths, wallpaper etc. (http://www.guardian.co.uk/money/2010/oct/22/tesco-carrefour-dangerous-chemicals)
It helps the supermarket to develop and cater for all their customer's needs.
How these ethical problems can be overcome? What can be done to promote ethical behavior within the supermarket industry?
Implementation of a code of ethics can be one of the ways to prevent unethical behavior. One of the most important issues is that business owners have learned that a business ethics program, when implemented, helps owners and managers make profits, improve their business performance and contribute to economic progress.
7. How to overcome this problem?
First of all managers should test the ethics of any decision they are considering. They should ask themselves simple question: Is it ethical? Is it harm environment? Is it beneficial for the customer?
2. Implementing the codes of ethic. The code is a document describing the rules of conduct. It is a document that includes a general description of general rules such as being honest, avoid arguments, .
3. Conducting an ethics audit that is a general assessment of an organization's ethical practices and activities by actively investigating and documenting incidents of ethical value, discussing them in an open and honest fashion. Developing a concrete plan to avoid such actions in the future.
4.Challanging one's rationalization about ethical behavior in a supermarket industry. (From psychological point of view, people usually convince ourselves that they are right and do things that are morally acceptable, although they are wrong.)
5. Ethics helplines (Stenaline ferries). There are special telephone lines that employees and customers can call to ask a question or report any errors.
6. Ethics officer - a high-ranking spokes-person, usually it is the general counsel or vice president of ethics who is expected to provide strategies for ensuring ethical values inside the company.
7. Ethics committee - a group composed of senior-level managers who assist a firm in making ethical decisions and cooperate with each others in order to evaluate some ethics policies.
Thirdly, Ethics committee that is a group of managers, usually the most experienced ones and , coming from different backgrounds and areas of the organization who can cooperate and evaluate a plan. The best way to get the best results is It is a necessary for a company to survive. The work of ethics officers is to provide strategies for ensuring ethical conduct throughout an organization.
8.Stakeholder management - is to support an organization in achieving its strategic objectives by interpreting and influencing both the external and internal environments and by creating positive relationships with stakeholders through the appropriate management of their expectations and agreed objectives
9. Instead of using refrigerators that damage environment, it is beneficial to use second loop. Low initial cost, simplified piping and low cost of operation. Are easy to maintain.
10. People should buy products locally produced.
Conclusion: general ideas:
Taking everything into consideration, A policy that Tesco promotes is generally based on customer's needs. What the customer needs is what Tesco will provide, against all odds. However behind the customer there is always stakeholder whose needs take a priority in most cases.
Consistency between values and behavior in the age of the green consumer and ethical investor.