The importance of ethics in business

One of the most important issue in business is business ethics to introduce this issue it is not bad to know that what is ethics definition, ethic standards are principle of the actions and decision from individual, organization, government, ethics can helps every body in social, effects of ethics separated to four areas, first is social, social is the biggest area for ethic, every body is living in society so ethics will effect every one who has different culture, beliefs, religion in different location, ethics has profit for every one, the next area is legal or law, in this area first should consider to meaning of law so what is law? Law is set of rules that are enforceable by court, by understanding this definition it is obvious that every body is responsible for the rules that govern by law, next step is organization should has set of rules to support and protect the right of individuals and customers or suppliers and government, ethics for organization is very important point and by setting these standards like codes of conduct or consumerism , organization will show their responsibility to others , last step in ethics is individuals, when we look at the definition of ethic and after researches around this subject, we will reach to this point that every body is responsible to their work and their work and actions or decision, in this step there are some reasons that can has effect on the ethics on this level, culture, beliefs, religions, these are only some the many point that will have effects on ethics from individuals, this is very important notice when we study about ethics, difference between the ethics and law, by understanding meaning of these two , it is obvious that in the law, standards might not be a ethic action or decision, in addition to reach to the better understanding of business ethics also should consider to some points about that, first is responsible business conduct, which is set of actions the employee against to enterprise stack holders, second is responsible business enterprise; which is set of policies and management practices to protect environment, core values and vision of organization, the third point is business ethics programs, the program that govern by managers of an organization to support their business conduct by engaging stakeholders and also can say that business ethic programs are structures from organizations to support employee and stakeholders, to illustrate the business ethic program should point to some way to set the program and structure which could support the business conduct, like planning, strategy and programming, building a responsible enterprise, and finally adopting a design review and approved process.

To look at the issues of business ethics, it is very important to know some characteristics of business ethic which include by general business matters such as bribing ways of accounting, it is not bad to know a bit about the bribery, Bribery, a form of pecuniary corruption, is an act implying money or gift given that alters the behavior of the recipient. And practices in five areas, first in country, by many public and private research it was showed that Denmark is the first country in the world that receive money by others as bribery, and Norway is the first country in the world by giving money in bribery, in this ranking there are many countries like Sweden, Germany, Finland, and others. Another area in bribery is industry that included by some regions like government, defense, aviation, energy, and construction, next is employee that by educate the staff monitoring and auditing also making open channels with employees can reduce the bribery in this area, next is joint venture, also by monitoring, auditing, setting the lead office and apply a strong contract can control bribery in joint venture, last area of bribery is agent, to reduce bribery risk in this area first of all organizations should ask themselves than is agent necessary for them or not, in addition in case of necessary they should make a valid and strong agreement and also include all polices for bribery and document all and also by making head office and monitoring and auditing should control bribery and reduce the risk.

Marketing and Advertising:

it is very important to all organizations that act as fair in their marketing practices and advertising, to practice ethical program in marketing there are some points that should consider to that like organization environment, individual environment, personal practices, professional environment and industrial environment, in addition for advertising I is very important that organization should not exaggerate about their products and say lie to people, there are two practices for controlling the advertising, first is trade practice and second is fair trade by AMP, in addition AMP introduce and gives information to people for better choice and pursued them to reach to that option,

Social contract:

Another characteristics from business ethics is social contract, the social contract responsibility is one of the most important subject in business ethics, it can divided to three parts, first is social responsibility which stakeholder responsibility included, second is profit responsibility of share holders, and last one is affirmative responsibility.

ETHICAL COMPANY:

According to the “ethisphere”2009 world’s most ethical companies, in this year this institute compare more than thousands of companies and industries from more than 100 countries and 35 industries and by ranking them in the companies selection process that some structure like methodology, In-depth analysis, further refinement, industry leadership and other method they gave the first place to Honeywell interactional from USA and in Aero Space and Defense, second place is for Harris corporation again from USA in Aero and Space and Defense, and third place is for Nike from USA in sport wearing and sport apparel and here are many famous companies in this ranking like DELL from USA and BMW from Germany, RaboBank form Netherlands, Xerox and Intel from USA are some other companies in this ranking, in industrial ranking the first place is for ACCENTURE and gave to Douglas G.Serivener, general counsel, secretary and compliance officer, the second place is for ED Scott, chief ethics and Compliance officer from CATERPILAR and third place is for Roderick A. Palmore, executive vice president, general counsel, chief compliance and Risk management officer from General mills industry are ranked in this list, In addition Philips, Unilever and T-Mobile are in next places.

Unethical companies and practices:

What are the unethical companies and industries in the world, of course there is no evidence for that and in fact it is impossible to compare unethical companies to each another but form some judgment of courts can understand some of these companies, for example Nestle company and McDonalds are some of these unethical companies,

Nestle:

There are some unethical activities by nestle company in it’s history like exploiting of employees in 1989, in nestle chocolate planet in brazil, and supporting brutal which nestle had financial supports rise in Brazil, China, Egypt, Colombia and other countries.

Another unethical behavior from nestle is abusing animals, 50%of L’Oreal company owned by nestle and L’Oreal abuse animal in testing and making experiment on animals, some groups boycott in response to L’Oreal claims.

McDonalds:

Another company that has many cases in many courts in all over the worlds is because of this its unethical actions and decisions and behaviors is McDonalds, some of these actions are like supplely environment. 35% of the UK population gave the worst rating to McDonalds for the way it traits, staff, suppliers, costumers and environment.

Adidas company an example of ethical company:

Adidas AG is one of the most famous and popular sport wear company in the world that started it’s job form 60 years ego, in the history of Adidas it came that the company founded in 1924 by Adolf Dassler, after foundation of Adidas in several decades many things happened to company, in 60’s, Adidas tried to help all athletes, Adidas design some equipment consider as ” fringe Sport”. This equipment could made revelation in high jumping, in 80’s Abdi Dessler death and after him his family, his wife , son and his daughter continue his job and his business, in 90’s they apply new management by new CEO’s they change the manufacturing and sell company to marketing company, in 1995 Adidas went to public on Frankfurt and Paris stock exchange, and in 1996, Reebok combined with Adidas and could made more benefit of world wide platform, and these two made stronger and wide range of products.

It is a German Based company, Adidas is a manufacture of sport apparel and also consist of Reebok, there are two companies which names are Taylor Made-Adidas Golf and Rockport that produce many Sport products like shoes, bags and shirts and watches, in addition Adidas is the second biggest sport wear manufacture after Nike in all over the world but it is the biggest manufacture in Europe, this is not bad to introduced some statically and financial information about the Adidas, Adidas founded by Adolf Dassler in 1924 but registered in 1949 and headquarters is Herzogrenuroch, in Germany and in CEO’s there are some famous people and businessmen like Herber Hainner, Erich Staminger, Igor Loudau and for financial statistic, Adidas had revenue of 10,799 billion euro(15.6 billion $) and profit of 642 million euro (933 million $), and there are 38980 employees are working for Adidas, Adidas product sport wear such as golf, soccer, rugby, tennis, Cricket and basketball and much more also some of products are accessories socks, watches, eyewear, bags and caps.” Jan Runau, Adidas AG”

What are ethics in Adidas Company?

Adidas is one of the most ethical company that always looking for ethical jobs, actions, decision and behavior also always they care about the environment but also sometimes unethical matter happened in there jobs, and there are some unethical matters in their portfolio.

Adidas is a global leader in supplier’s factories and decreasing environmental impact. In sport industry, Adidas also set of codes which named “supply chain code of conduct” and in these codes they apply set of standards about their stated intentions on ethical purchasing. In addition they also set rules for moral responsibility in the way of products, marketing and manufacturing and for international labor they create another standards named” workplace Standard” that introduce clear rules of conduct in many factors like labor, environment, children, hours of work and much more.

There are some statically information about these changes by Adidas, first is freight contributes 175 grams carbon dioxide CO2 and road freight 147 grams of CO2, and air freight by 903 grams of CO2.

In the air travel they use carbon offsetting to about the collision of air travel, in addition Adidas set many teams meanwhile for research for sea and road traveling.

Adidas shows that they are very serious and pioneer in many subjects related to ethical issue and they spend a lot of time and cost and energy to be a one of the ethical company in any subjects like labor, environment, customers,

Children and others.

Suitability code:

For details about the suitability code, there are several subjects that cover by this code; Stakeholders, suppliers, customers, environment, community, employees.

Stakeholders:

About the stakeholders of Adidas are employees, authorities, business partners, workers and opinion formers involve stakeholders to make decision that shape day-to-day operation, and also provide the clear and effective and honest report to their stakeholders, there are several activities that Adidas tries to engages stakeholders:

Responding to the SRI community

Engaging with employees

Responding to enquiries raised by customer, employee and NGO

Participation and collaboration with industry initiatives governmental and non-governmental initiatives and multi-stakeholders partnership

Out reach to academic and students.

About the partnership and ways of engaged in Adidas, to build trust relationship they have some ways like WFGSI and WCSBD in corporate response.

WFGSI stands for world federation of the sporting goods industry and WCSBD stands for world business council for sustainable development, in supply chain condition there are three conditions as fair labor association (FLA) and fair factories clearing houses (FFC), and last one is Round Table on Codes of conduct, and set of code in environment is AFIRM working group and better cotton initiative (BCI).

The second subject in ethical matter is supply chain, according to Adidas information on 31 Dec 2008 Adidas works with more than 1050 factories, in many countries, some of these countries such as china, Vietnam, Indonesia, Turkey, and Thailand, and the condition to support the suppliers they set the workplace standards, it’s included several of standards of general principle involved forced labor children, discrimination, wage and benefit, working hours, freedom of association and collective Barging and Disciplinary principle, next is heath and safety to protect environment and environment requirement, for example about the child labor all supplier should not work with children under 15 years old and about the working hours they set the rule to their supplier that employee should not work more than 60 hours per week, to protect and support this standards and also to be confirm all codes they apply a team to monitoring and verification which this team will audit and monitor supplier and will contact with any act against the standards, another way to protect codes is ratting and sourcing decision with them, by they rank and improve the supplier with has lower rank and praise. From higher supplier, for fair wage Adidas has strategy which named fair wage strategy which they set wage by mechanism depends on input, output, and effort of supplier, also benchmarks will pay higher wage that local wage, and also rewards for employee is another way that included in fair wage strategy. “Stakeholders, Adidas-Group”

Environment:

The third part of ethical issue is environment, Adidas always Responsible for their environment and always care about the natural environment, and to do this act and support the environment Adidas applied a system-based approach to managing environment, and this system covered two parts of production facility and supply chain, according to information about the environmental practice of Adidas company, more than 95% of Adidas groups using these performance. To protecting their environment and reduce environmental impact and reduce using of energy and waste the energy, and using lower material in their production. “Environment-Adidas Group”

This is a report about the environmental of Adidas:

“Herzogenaurach, 2009. Record year for the adidas Group Environmental” data for our main administration offices and own production sites 2008

Our main

administration offices

Energy consumption – Electricity (kWh/year)

Energy consumption – Heating (kWh/year)

Water consumption (m3/year)

Waste (tonnes/year)

HQ of the adidas Group,

Herzogenaurach, Germany

12,683,749

9,627,567

21,487

426.4

adidas America Inc.,

Portland, USA

6,472,600

1,403,705

36,306

not

reported

Reebok HQ,

Canton, USA

13,375,974

13,930,828

34,936

564.9

TaylorMade-adidas Golf HQ,

Carlsbad, USA1

3,185,966

20,554

42,654

551

Our own

production sites

Energy consumption – Electricity (kWh/year)

Energy consumption – Heating (kWh/year)

Water consumption (m3/year)

Waste (tonnes/year)

adidas Footwear Factory,

Scheinfeld, Germany

1,578,340

4,432,207

1,736

260.2

adidas Apparel Factory,

Suzhou, China

425,542

0

1,162

10.2

adidas Canada Assembly Factory, Brantford, Canada

382,393

212,520

454

14.5

Reebok-CCM Hockey Factory,

St. Hyacinthe, Canada

2,002,800

973,440

5,150

25.4

Reebok-CCM Hockey Factory,

St. Jean, Canada

2,637,900

3,193,460

2,082

72.2

Reebok-CCM Hockey Factory,

Edmunston, Canada

1,229,400

0

1,674

56.2

Reebok-CCM Hockey Factory,

Tammela, Finland

1,343,059

1,140,445

1,190

237.9

Reebok-CCM Hockey Factory,

Malung, Sweden2

n/a

n/a

n/a

n/a

Sports Licensed Division, Factory, Indianapolis, USA

10,844,350

120,158

19,822

455

Sports Licensed Division, Factory, Mattapoisett, USA

725,671

475,011

n/a

150.1

Sports Licensed Division, Factory, Cedar Rapids, USA

1,938,310

3,830,624

3,432

64

TaylorMade Assembly Factory,

Togane-Shi, Japan

422,380

740

1,335

14.4

1 Figures cover TaylorMade HQ and assembly factory

2 Figures are not available for 2008 because site is externally leased

Community:

Adidas has program for community and this program based on 3 studies, first is community project for people who need it and second is employee involvement, in this involvement employee support the company to reach to their goals, and last one is corporation giving which is about the financial contribution, product and services, Adidas by this program will support children and young people in face of their needs, by giving them cloth and sportswear supporting their sport goods,

Employee:

When ethics goes to employee it will separated to three parts,

1. Activity engaged

2. Not engaged

3. Activity disengaged

Adidas also set the reward rule for employee to support their employee and Adidas set the codes of conduct to support the employee and protect their rights, these set coming to global and will cover all employees of Adidas in all over the world, Adidas approach for employee it comes to 5 ways, talent management by ranking and praises of them, by identifying them and find the opportunities that those that those managers gain for company, employee and managers, performance management, by performance feedback and improving the learning.

Motivation:

Next is motivation that we covered before that company by giving gifts and rewards motivate their employee to keep going in addition promotes commitment is another way to motivating the employee, last action to help employee is communication with top managers set the meeting and other gathering to collect employees opinion to make decision, as an example in 2005 Adidas gather 350 staff to corporate responsibility and environmental affairs.

Awards and Recognition,

To clear of the Adidas practice there are many awards that Adidas collect from many festivals and many institutes and these are just some of them, in 2009Adidas got the 2009 industry leader and super sector leader in the DOW Jones sustainability Index and ” Sustainable retail business 2009″ and also awarded consumer organization in 2009 and FTSE4 good index in addition Adidas awarded 100 most sustainable corporation in the world and fair labor association in 2008, Adidas awarded reporting twice in 2004 and 2006. ” Awards and Recognition-Adidas Group”