Operationalisation Of Ethical Theory And Corporate Responsibility Commerce Essay

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According to Trevino (2010), business is conducted in the real world as it exists and not as individual notions of business ethics would rather have it be. BHP Billiton is described as the world's largest natural resources company. The company deals in aluminium, metallurgical coal, energy coal, copper, gas, diamonds, manganese, iron ore, uranium and nickel among other resources.

The company's code of conduct "BHP Billiton Code of Business Conduct" represents the organizations commitment to doing business in an ethical manner and to uphold international standards, legal expectations and obligations. The code of conduct is applied throughout the group of companies regardless of which country the company is operating in. The code covers several different areas including correct policies and guidelines that should be observed with regards to workplace relations, working with governments and communities, working with business partners and proper conduct when using business resources.

The company's policies and practices are centred on different aspects of ethical theory such as utilitarianism, kantian deontology, justice and rights among others which guide the company's workers as well as other associates that work with the company, all are required to observe the code of conduct and put it into practice.

Utilitarianism

According to DeGeorge (2010), Utilitarianism is an ethical theory that states that an action is right if it produces the greatest amount of good for the greatest number of people. Utilitarianism is often viewed as being appropriate as long as a strong notion of human rights guarantees that it will not violate the rights of small groups and minorities. There are two different types of utilitarianism, act and rule utilitarianism. Act utilitarianism looks at the consequences of each act and calculates utility each time the act is performed while rule utilitarianism focuses more on the consequences of everyone following a rule and then calculates the overall utility of accepting or rejecting the rule.

When looking at the BHP Code of conduct, the code has embedded the utilitarian theory in its business practices and policies particularly when dealing with communities in the areas in which they operate. The business of mineral extraction can be harmful to the environment and the organization takes steps to safeguard against this. The company has community investment programs in the countries it operates in and it ensures that these programs are aligned to its business objectives. These programs help the people in these communities and take note of any concerns that the people have as well as take necessary steps to safeguard the environment.

Kantian Deontology

According to DeGeorge (2010), Kantian Deontology is a theory that states that whether actions are considered morally right or wrong is independent of their consequences. Morality is viewed as being as self-imposed and it is equal to reason. This theory emphasizes the fact that moral life is centred on duty and these duties are moral obligations that individuals freely impose on themselves. Reason is seen as being the same for all human beings and so therefore morality is seen as being objective.

According to Kant's categorical imperative which explains reason, the three formulations state that for an act to be moral is must be possible for it to be made consistently universal, it has to respect rational humans as an ends in themselves and it has to respect the autonomy of rational beings. When focusing on universality, Kant stated that for an action to be considered moral, it must apply to all and in this sense everybody should be able to carry it out, no one person should be prevented from doing it.

Kant concluded that to respect people is to treat them as ends in themselves instead of treating them as a means to an end. Autonomy is viewed as being made up of three different aspects namely freedom, self-imposition of the moral law and universal acceptability of the moral law. The BHP Code of Conduct states that all staff members are encouraged to use the BHP Quick conduct test when making decisions about concerns that they have. The tests include analyzing whether the decision fits with the employee's values, follows the law, and passes the safety and newspaper tests. If the matter at hand does not pass the tests then the employee should raise the matter with higher level management. In this way the company is recognizing that their staff members are knowledgeable and capable of making decisions because they are trusting them to have exercise their good judgement as well as use the code for guidance when making decisions.

Justice (Rawls and Nozick)

Justice is mainly concerned with the standards of fairness and views ethical behaviour as being impartial and fair in treating people according to guiding rules and standards. There are five main types namely; compensatory, commutative, retributive, procedural and distributive justice.

Compensatory justice deals with compensation for past injustice and harm and it states that compensation offered should be proportional to the harm caused while retributive justice deals with the imposition of punishments and penalties on wrongdoers. The BHP code makes it clear that all employees should follow the laws and policies in the code and failure to do so will result in necessary actions being taken by management. If the breach of code involves a violation of the law, the matter will be directed to the appropriate authorities.

Procedural justice deals with fair decision procedures, practices or agreements. The BHP code includes procedural justice particularly with regards to the company's business practices. Employees are encouraged to do company business legally and are advised not to accept gifts, bribes or any favours in return for favourable outcomes or maintaining supplier relationships.

Commutative justice deals fairness in transactions such as fair pricing, and competition. BHP Billiton's policy with regards to competition and anti-trust states that employees should take into consideration the anti-trust ramifications when dealing with a competitor and that the company's anti-trust standards should always be adhered to. Staff members are encouraged to adhere to BHP's independence in judgement when it comes to matters such as pricing, marketing and selling products and should act lawfully.

According to Rawls veil of ignorance, all people are rational and value their own good, in their original position people do not know anything about themselves personally or their situations and so they are forced to choose principles of justice impartially. Rawls theory encourages equality of resources instead of gains in utility. This theory affects business in areas such as government regulation, autonomy in advertising and the use of bribes.

When dealing with governments in other countries particularly in poor nations, BHP Billiton has a strict policy that its staff should not offer any gifts or hospitality to government official's in return favourable outcomes. Employees are encouraged to abide by the laws and do business legally and should at all costs avoid any situations that could be interpreted as trying to seek favour or offer bribes to governments in return for favourable outcomes.

The organizations policy on bribes and corruption states that the company prohibits bribery and corruption in all its business across all the countries it operates in. However, there is an exception that states that if an employee has reason to believe that they cannot escape serious harm unless they meet a demand for payment, it would be permissible to make the payment in that situation due to the company's staff health and safety policies.

Regarding facilitation payments, it is noted that some countries may request these payments to low level government staff in return for routine services, staff is required to consult management and act in accordance with the relevant country's guiding laws. All staff are required to communicate the company's anti-bribery requirement to third parties via contract and monitor that these parties do not engage in bribery during the duration of their contracts.

Nozick's libertarian view of justice focuses on social and economic liberty and entitlement. This view attacks the redistributive function of government, looks at taxation on income as theft and attacks government regulation of businesses. Nozick argues that we have a right to own anything as long as it does not worsen anybody else's position in the society. The BHP code's rules make it clear that employees should not act in an unethical manner or take any actions that will put any partners at a disadvantage because the company strives to carry out its business in an upright manner. The code on company data states that staff members are not allowed to falsify information especially any information regarding finances or accounts and that staff should always cooperate with internal and external auditors. The company pays taxes as it should and makes sure company accounting practices are followed when preparing financial statements.

Rights

DeGeorge (2010) states that moral rights are defined as important, normative and justifiable claims or entitlements; technically a right is anything that we are entitled to.

There are positive and negative rights; positive rights are defined as entitlements to be provided with something or have something done for one while an example of a negative right would be the right to be left alone. Some important ethical rights in the workplace would be the right to be informed of risks and harms of one's occupation, the right to privacy, free expression, due process, fair wage, safety, meaningful work and equal employment.

In its code of conduct, BHP Billiton sets out guidelines relating to health and safety at work. The company states that it aims to meet all legal requirements as occupational accidents and illnesses can be prevented. Employees are directed to always follow health and safety standards, always wear protective equipment, know what to do in case of an emergency and that an employee should never undertake an work that they have not been trained to do.

The code also addresses personal information and privacy and states that it will respect its employee's privacy and will only collect information that is necessary and will not disclose it or use it in any way other than the purpose it is intended for. The company also takes measures to protect employee's private information against loss or unauthorized access or use.

Ethical Relativism

Ethical relativism is an ethical theory that claims right and wrong is subjectively determined by each culture. There are two types of relativism, descriptive and normative. Descriptive relativism states that it is evident that different cultures have different moral values while normative relativism states that since each culture views itself as being right we cannot make rational and objective moral judgements. There is no such thing as universal truth in ethics as the relativist code argues that there are only the various cultural codes therefore there are no universal rights or wrongs.

The Absolutist point of view argues that we should put our own cultural values first while Universalism looks at the fundamental principles of what is right and wrong that goes beyond cultural boundaries. Staff members at BHP Billiton are encouraged to take their values into consideration when making ethical decisions. When determining whether an issue of concern is in line with the company's code of conduct, employees are encouraged to carry out the quick test which requires staff to question whether the course of action or issue is in line with their personal values. In this way the company is respecting everyone's individual values and since the organization practices equal employment, there are people from different nationalities and cultures working for the company so their cultural values do influence the decisions they make.

Corporate Responsibility

Corporate responsibility looks at the proper role of business in society and the responsibilities that go beyond the economic and legal responsibility of a company. According to the European Commission as cited in Tengati, Perini and Pogutz (2004), companies should integrate social and environmental concerns in their business operations and interactions with stakeholders on a voluntary basis. The different areas that corporate social responsibility (CSR) covers are business ethics, legal compliance, philanthropy, employee rights and investment, environment management, human rights, corruption and corporate governance among other areas.

There are several different views of corporate social responsibility (CSR) the first being the classical economic view of CSR which states that the main purpose of a business should be to maximize profits within the law. It has been argued through the classical view that socially responsible actions lower efficiency by reducing profits, wages and in this way both the consumer and employer lose so this can deter companies from taking socially responsible approaches to their business. The broad socio-economic view states that organizations should do their best to prevent harm and cause no harm by doing what is right and fair while the broad maximal view states that companies should also strive to do good deeds by solving social problems.

All the different views of CSR are covered in the company code of conduct. BHP Billiton understands that their business does affect the communities they operate in and so the company takes steps to engage regularly with the people affected by their operations and take their concerns into consideration when making decisions.

The company has community investment programs in the countries it operates in and it ensures that these programs are aligned to its business objectives. The company's approach to environmental management states that they have an overriding commitment to health, safety, environmental responsibility and sustainable development.

The organization which operates in the resource extraction field can affect the environment significantly so the company identifies, assesses and manages its environment risks as well as sets targets that promote the efficient use of resources. All staff is directed to immediately stop any work that can lead to significant environmental or community harm. The company also tries to take care of the environment by working to reduce pollution and enhance biodiversity protection. This is achieved through arranging for the disposal of waste and product in a safe and environmentally and socially responsible, safe manner.

Conclusion

All organizations should inform employees about the values and goals of the company and clearly outline what behaviour is deemed as unacceptable. When dealing with large multinationals that have employees from diverse backgrounds like BHP Billiton does, it is important for the company to have rules and guidelines that assist the employees in their decision making and every day activities in the workplace so as to minimize the number of mistakes made due to bad judgement. BHP Billiton has done an excellent job of clearly outlining its company values as well as informing staff members on acceptable code of conduct and what is expected of each and everyone while they are at work. The code also evokes employee's moral values as each and every staff member is advised to take their values into consideration when making decisions and if they think there is a breach they are advised to consult with management.

This creates an open work environment where the employees are not afraid of victimization and mistakes are fewer because employees have the opportunity to seek assistance when unsure about a course of action. The code of conduct has embedded several different theories of ethical theory and most importantly takes corporate and social responsibility seriously because the business the company carries out can lead to sever environmental damage.

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