Business Essays - Ethics Principles Trade


Ethics Principles Trade

What is business ethics?

Business ethics can be said to be a form of art which includes applied ethics which follow ethical principles used to find solutions to moral and ethical problems which can arise in a business environment. In the recent past there has been increasing pressure on businesses to ensure that they operate within a framework of some ethical principles. This has been pressurelized by enactment of some laws aimed at ensuring that businesses operate within some ethical principle which defines the limits of their operation. In broader description, business ethics can be normative or descriptive.

Take an example in which the business will observe ethics as a meter of corporate practice. This will be normative since it becomes part of normal operations of the business. Business ethics can also be descriptive in away when it takes an academic angle. This means that business ethics will be a part of academic description. Social issues on the other hand refer to the problems or moral issues which affects the members of the society. Some examples of social issues include suppression of human rights, social injustice, and violence among others. (Robert, 2002 pp 12).

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You find that most of the consumers have been exploited so much by the producers. This is because of the code of ethics which have been established by the producers. Here consumers are supposed to act morally when certain unethical problems occur when carrying out these businesses. You find that due to the restrictions which are made on some products say the case with fair-trade cotton, the consumers are only forced to buy that product.

In this case, you find that this consumer will not have time to taste other products since they are restricted on purchasing only that product. As it is defined above, business ethics is supposed to consider the social issues of both the producer and the consumer and their rights should be protected. They should have a choice to purchase every product they want and no restrictions should be made on these products. (Robert, 2002 pp 12).

Understanding and analysis of ethical issues

There are many forms of business ethics which governs the whole spectre of business operations. Business ethics are narrowed to address some specific issues which affect specific parts of the operations of a business. Professional ethics defines some practical ethical problems and phenomena concerned with some particular areas of the business professions.

Professional ethics address specific aspects of business like accounting, wages, compensations, consumption and others. Accounting ethics defines the way in which accountants should conduct their work by ensuring that they don’t give falsified financial analysis. In this case am going to talk about fair-trade cotton in the market. (Duska, 2003, pp 11).

Fair-trade certified cotton is used to address the development needs of all small holder cotton farmers in most of the developing countries who are said to face a severe poverty and this is out of the subsidies which have been enacted by most of the already developed countries say in the U.K. that distort the global market.

The fair-trade certification have been put to ensure that the farmers who produce these products have been protected by receiving a fair price for their cotton and fair-trade premium for them to invest in environmental, economic and social developments in their communities. All those companies which sell garments which are made with fair-trade certified cotton are supposed to abide to the rules and regulations of this agreement.

Under business ethics, it is quite ethical for business to have rules and regulations to ensure that their business has been run well. But, for this case, not all companies which abide to these rules and hence becoming quite unethical. (Duska, 2003, pp 11).

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There are also other products which are not made of cotton. There are several fibre products which are also good as when compared to the cotton products. So it is unethical for these consumers to only purchase products which are made of cotton only. This is because there are also other producers who still need to be protected in this case. For example the producers of other fibres say linen, polyester among other products.

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Since fair-trade is supposed to protect producers of cotton only, it’s quite unethical since there are also other potential producers who not only fall under this agreement. So, it is said to be immoral for the U.K consumers to only purchase those products which are certified by the agreement and neglect the other products. Under business ethics, it should provide the human rights of every consumers and producer and none should be neglected. For example, in this case, cotton only provides 1 percent of the world cotton which is produced. (Duska, 2003, pp 11).

Cotton is one of the vital fibers crop for the global textile industry. It also plays a key role in both social and economic development of most of the developed countries say in the united states Despite its meteoric rate of growth, Fair-trade cotton still makes up less than 1 per cent of the fiber produced worldwide. In this case, ethical issues are going to apply in this case. This is because moral issues usually affect the consumers of these goods.

One of the injustices in this case is poor quality products. You find that the cotton fair-trade is still increasing but it is producing poor quality products by the greedy producers simply because they are protected under this agreement. So in this case, you find that it is quite injustice for the consumers to continue buying these products. This is because of the poor quality with these products. They are producing poor quality products since they know that cotton is one of the major cloth products which are liked by consumers.

So in this case, it is not ethical for these producers to sell such products to the consumers. This is because with the definition of business ethics, you find that in includes both the normative and social issues of both the produce and the workers. So in this case, the moral issue will apply in this case. This is because the consumer’s rights have been violated. This is because they are forced to buy poor quality products thinking that these products are actually good for them. (John, 2001).

Another moral issue which is arising in this case is exploitation of the developing countries. You find that U.K protects its cotton producing countries and also have imposed subsidies and quotas to ensure that there are no imports to this country. So it is due to this that the rest of the countries that are producing cotton are not supposed to export these products to the United States. As a result, you find that the consumers are not exposed to a wide variety of goods to purchase from.

They do not have a variety of products to choose from but are only forced to purchase only cotton products that are produced in the United States. You also find that most of the products which are made from cotton come from different varieties say from animal products say wool and leather. These products can be produced by other countries say in china. As a result, you find that the consumers are only restricted to purchase clothing which is made from U.K only. The consumers are denied the taste of other products which are also produced by other countries.

A good example in this case is the issue of fair-trade in china and U.K.More recently, in order to limit the economic impact of clothing’s which are produced in China, the global clothing industry has been locked in to a system of subsidies and quotas. This means that all those countries that recently produce clothing have been protected from a free market that would overwhelm them. So you find that these countries are protected from exporting cotton products to the United States. (Thomas, 1993).

Another area of concern in this case is the conditions of working by those people who work in these factories and firms. It is the labor market that we are specifically dealing with. What is this labor market? The labor market can be described as a place where there is actual exchange of labor. In the labor market there are some moral values that should be put into consideration if the market has to succeed.

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The labor market has been one of the long term areas of conflict in the business world. Going down the history, the labor market is recorded as having been a catalyst to some of the major changes that have taken place in the world. Remember the early struggle of the trade unions during the industrial revolution eras in Europe and the sugar plantation of America? These are some of the historical happening that depicts that there must be some basic rules that ought to be observed in the labor market.

It is obvious that these early struggles were not due to the satisfaction in the labor markets but rather due to the suffering the employees underwent through in their place of work. It was due to the breach of moral values and business ethics in handling of the employees. The relationship that exists between the employer and the employees is that of a superior and subordinate and hence there is a likelihood of breach of the rights of the subordinates. This is the reason why there is need for consideration of the rights of the employees in the work place. Moral values form an integral part of the relationship between the employer and the employee. (Thomas, 1993).

But it is the issue of wages that continue to draw mixed reaction and which is a cause of a long time struggle in the work place. A wage can be broadly defined as the compensation that someone receives in return for labor services offered. In the labor market this is the appropriate definition of wages. Which are the ethical issues surrounding wages in the work place?

The issue of wages has been dodged by controversy which leaves us with the question of what can be considered as the right wages. A right wage can be said to be a compensation for a service offered which equals the amount of effort that was used in the service. Going with the labor theories, employer has a moral duty of ensuring that they pay the employees a wage which is equal to their input in their services. An engineer will not be expected to be paid the same amount of wage as a casual laborer. These are some of the segmentation in the labor market that we have to agree with. (Thomas, 1993).

But why is it that those who use more efforts in their work are paid less than those who use less effort? Why is it that supervisors who does nothing more than standing and giving orders will be paid more than casual laborers who use so much effort in their work? These are all ethical issues that surround the labor market and which may take along time to resolve. This arises from the scarcity of skilled labor in the market. (Jackson, 2001).

For the economic progress of any nation, there is need to ensure that the labor is paid in accordance to the living standard of people in that country. This is the bed rock issue that surrounds the controversy of the wage. Working all day and getting paid 2 dollar while the living standard of that nation will force you to use more than the two dollars a day amounts to exploitation of labor. A country cannot develop if its minimum wage doesn’t satisfy the existence of those working under it.

Many people have dismissed the issue of minimum wage in the labor market terming is as a socialist gimmick or government control of the labor market which is supposed to be free operating on the force of demand and supply. What moral responsibility do consumers in the UK have to purchase such products produced under unethical working conditions? These employees are the same people to buy such products and good working conditions should be imposed say good wages. It is out of the good wages that the consumers will be in a position to purchase these products. But if they are not well paid, then they can not buy such products but will instead go for cheap products. (Jackson, 2001).

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Clothing is supposed to fulfill basic physical needs of the consumers such as shelter and warmth. If such basic needs are not fulfilled, then you find that the consumer is not satisfied with those products. Fashion in this case plays an important role in the world today. So, when compared to the other products, if the cotton product does not go with the fashion of the customers, then these consumers will in no way purchase those products. It is their right to choose the product they want when given a variety of products to purchase from. So in this case, it will be moral if the consumers don’t purchase that product if it does not meet the physical needs of the consumers. (Robert, 2001, pp 23).

Countries are supposed to benefit from fair-trade agreement. The fair-trade agreements since it was initiated to ensure that goods that are exported to the member countries are duty free, you find that U.K in this case does not go as per this agreement. It is due to this that the developing countries have been exploited since they are locked from exporting their products duty free. It is due to this that most of the infant industries at the developing countries have a slow growth and do not compete effectively with the industries at the U.K. As a result, the consumers in U.K are not ethically to purchase these goods since the other producer’s rights have been neglected. It is unethical to restrict producers from exporting products to that country.

So in this case, under business ethics, it is unethical for these consumers to purchase those products since the other producers have been denied their rights. Fair-trade cotton in U.K still makes up less than 1 per cent of the fiber produced worldwide. In this case, it means that there are other countries who are still members of the trade agreement who also produce cotton products. So it is not morally ethical for consumers at U.K to continue purchasing those products which are produced at their country while there are other countries who also produce high quality products. So in this case, we should consider the moral issue in this case whereby the other producers should also be allowed to trade their products in to other countries so that consumers can have diversified products to purchase from. (Robert, 2001, pp 23).

When producers are locked from exporting their products to other countries, you find that the prices for those products which are produced in that country will definitely go up. This is because there are no other producers to compete in the production of these products. So the consumers will definitely buy these products at a higher price. It is not ethical to exploit consumers from the increased prices. Prices should be standardized to ensure that consumers are not exposed to higher prices. So, in this case, despite the increased growth of cotton in U.K, it is unethical on the side of the consumers since these consumers will be forced to buy these products at a higher price. (Robert, 2001, pp 23).


Business ethics are important in ensuring that the business sector serves the consumer well. This ensures that the business makes profit which is ‘ethically justified’ and at same time the consumers are satisfied. All business should observe the code of ethics in their operation in order to look at the welfare of the society.


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Norman, E and Hogue, W 2005, Management Ethics. Blackwell Publishing, Malden.

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Schlegelmilch, B 1995, The influence of country and industry on ethical perceptions of senior executives in the U.S.Pp 24

Duska, R 2003, Business ethics, Blackwell Publishers, Malden, MA, pp 11

Thomas, R 1993, can ethics be taught? Perspectives, challenges and approach, Harvard Business School, Boston, MA

John, D 2001, The next phase of business ethics: Integration psychology and ethics, Amsterdam, New York.

Robert, S 2002, Morality and market: Ethical and virtue in the conduct of business, McGraw-Hill, Boston.pp 12.

Robert, S 2001, Ethics in social marketing, Georgetown University Press, Washington, D.C. pp 23.