Tag: Ethics

7-Eleven, Volkswagen cases show why we should push back on – corporate ethics #business

#business ethics articles

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7-Eleven. Volkswagen cases show why we should push back on ‘corporate ethics’

Professor of Management and Organization Studies, Macquarie University

Disclosure statement

Carl Rhodes does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.

The Conversation’s partners

The Conversation UK receives funding from Hefce, Hefcw, SAGE, SFC, RCUK, The Nuffield Foundation, The Ogden Trust, The Royal Society, The Wellcome Trust, Esmée Fairbairn Foundation and The Alliance for Useful Evidence, as well as sixty five university members.

Republish this article

We believe in the free flow of information. We use a Creative Commons Attribution NoDerivatives licence, so you can republish our articles for free, online or in print.

Chairman and major shareholder of 7-Eleven Russ Withers sits in a Senate Committee hearing in Melbourne. Julian Smith/AAP

There is perhaps no phrase more hackneyed in the corporate world than: “good ethics is good business”. Against the image of the ruthless business baron who will stop at nothing in the pursuit of wealth and power, the slogan tells us there is no friction between being good and being successful.

As luck should have it (for corporations that is) it is argued organisations can stand up and be righteous about their do-gooding, and this will actually lead to the achievement of self-interested business results. The cake can be had and eaten.

But does this ethical catch phrase really hold sway in the corporate world? Events this September suggest not.

The month of the corporate scandal

September 2015 was mired in corporate scandal. German car manufacturer Volkswagen was raked over the coals for installing software in its cars that ensured it falsely passed emission tests. Eleven million cars were involved over a period of seven years. VW’s CEO Martin Winterkorn resigned over the affair and now faces possible criminal charges .

American corporation Turing Pharmaceuticals was publicly vilified for its predatory pricing when it raised the price of the drug Daraprim by 4000%. This is a drug used to treat infections associated with HIV and AIDS. Turing’s CEO Martin Shkreli was described by the Washington Post as “the most hated man in America”.

In Australia trouble arrived at convenience store chain 7-Eleven when the ABC’s documentary series Four Corners revealed its use of exploitative and illegal work practices to reduce its labour costs. Employees were being paid less than half the legal minimum wage. Young and foreign workers were especially targeted. The scandal saw the resignations of 7-Eleven’s chairman Russ Withers, and its CEO Warren Wilmot.

Bad ethics is good business

Each of these scandals has been scrutinised in terms of business ethics. We are not talking here about contentious and nuanced debates about the nature of morality. In these cases the ethical issues relate to cheating, lying, deception, law breaking, exploitation, and merciless profiteering. As far as any common understanding of ethics is concerned these things are on the far side of the thick and grey line that separates right from wrong.

What do these cases have in common? Each one suggests there was an ethos in place in these corporations that held that “bad ethics is good business”. Seven years of highly orchestrated cheating at VW meant increased sales. In 2009 VW became the world’s biggest car manufacturer .

Institutionalised wage fraud and labour exploitation at 7-Eleven kept store costs down, increasing profits both for franchisees and (especially) for the parent company. 7-Eleven has twice been names Australia’s “franchisor of the year”. Price gouging at Turing meant a drug listed on The World Health Organization’s essential medicines list could bolster the company’s profits by exploiting the sick and vulnerable.

Just don’t get caught

The “bad ethics is good business” approach was going well for these businesses until they got caught. These three cases have triggered debates still raging in all sectors of society. Heads have rolled and bottom lines are jeopardised.

Does this really confirm that “bad ethics is bad business”? Of course not. There is no doubt many other corporations are profiting handsomely from deceit, lies, fraud and exploitation. The scandals of September 2015 show that “bad ethics is good business … unless you get caught”.

It’s not just about not getting caught. It is also about the political, legal, social and economic implications of being found out. In the cases of VW, 7-Eleven and Turing there has been a massive public and media outcry about their reprehensible and selfish behaviour.

Bringing these corporations to justice was not the work of one heroic individual, nor the result of government action. It was a collective effort that involved NGOs, scientists, academics, politicians, the media and the general public. This was a victory of civil society and democratic dissent.

So, we can reformulate our proposal: “Bad ethics is good business … unless you get caught … and as long as you aren’t the subject of a public outcry”.

Democratic business ethics

When corporations speak of business ethics their idea is that they can keep it all in house. The ethics of business is largely seen as a matter of corporate self-regulation so that pesky outsiders won’t stick their noses into corporate affairs. The September scandals suggest an entirely different ethics.

If we want ethics in business, what we need is more corporations being caught and more public outcry. For business ethics to be effective they must be pushed onto corporations against their will. Business ethics is democratic, not corporate.

What we can learn from the business events of September is that ethics cannot be left to corporations themselves. Business ethics requires a vigilant democracy where the public and its institutions will hold corporations to account for their actions.

Business ethics, to borrow a phrase, is about keeping the bastards honest.





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Journal of Business Ethics #business #reviews

#business ethics

#

Journal of Business Ethics

ISSN: 0167-4544 (Print) 1573-0697 (Online)

Description

The Journal of Business Ethics publishes only original articles from a wide variety of methodological and disciplinary perspectives concerning ethical issues related to business that bring something new or unique to the discourse in their field. Contributors examine moral aspects of systems of production, consumption, marketing, advertising, social and economic accounting, labor relations, public relations and organizational behavior. In order to promote a dialogue between the various interested groups as much as possible, papers are presented in a style relatively free of specialist jargon.

From its inception the Journal has aimed to improve the human condition by providing a public forum for discussion and debate about ethical issues related to business.

The style and level of dialogue involve all who are interested in business ethics – the business community, universities, government agencies and consumer groups.

FT 50 – This journal is one of the 50 journals used by the Financial Times in compiling the prestigious Business School research rank

Thomson Reuters Journal Citation Reports® Ranking by Category

– Ethics 8/52
– Business 47/120

Latest Articles

  • Impact Factor 1.837
  • Available 1982 – 2016
  • Volumes 137
  • Issues 668
  • Articles 7,517
  • Open Access 111 Articles




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Business ethics #business #applications

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Business ethics

I think being ethical would be an objective of most business orgnizations. It is undeniable that some firms may hold the idea that making profit is the most important goal, in this case they could sometime being unethical like giving workers very low wages or produce a lot of pollution. In this way, although the company may get high profit in a short period of time, thier reputation will be really bad and consumers might stop buying their products in the future.

Anglo American has recognised the importance of taking social responsibilty. I think this will be a opportunity of them. In my own prospective, if one company can not only obey the law but also treat most stakeholders equally, they will finally obtain a lot of benefits. For instance, if Anglo American have wonderful working conditions for their employees, they will easily recruit new workers will good skills due to their good reputation. If company can pay supplier on time they may easily to get a discount in the future.

Promise not break the law is just a really basic regulation for business today. Taking social responsibility and being ethical are become increasingly important for most company. Although there is no doubt that the cost of business will rise when they choose to being ethical, they will benefit from that in the near future.

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Business Ethics and Social Responsibility #business #franchise

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Business Ethics and Social Responsibility

Also See the Library’s Blog Related to Ethics and Social Responsibility

In addition to the articles on this current page, also see the following blog that has posts related to Ethics and Social Responsibility. Scan down the blog’s page to see various posts. Also see the section Recent Blog Posts in the sidebar of the blog or click on next near the bottom of a post in the blog. The blog also links to numerous free related resources.

About Ethics, Principles and Moral Values

Simply put, ethics involves learning what is right or wrong, and then doing the right thing — but the right thing is not nearly as straightforward as conveyed in a great deal of business ethics literature. Most ethical dilemmas in the workplace are not simply a matter of Should Bob steal from Jack? or Should Jack lie to his boss?

What is Business Ethics?

The concept has come to mean various things to various people, but generally it’s coming to know what it right or wrong in the workplace and doing what’s right — this is in regard to effects of products/services and in relationships with stakeholders. Wallace and Pekel explain that attention to business ethics is critical during times of fundamental change — times much like those faced now by businesses, both nonprofit or for-profit. In times of fundamental change, values that were previously taken for granted are now strongly questioned. Many of these values are no longer followed. Consequently, there is no clear moral compass to guide leaders through complex dilemmas about what is right or wrong. Attention to ethics in the workplace sensitizes leaders and staff to how they should act. Perhaps most important, attention to ethics in the workplaces helps ensure that when leaders and managers are struggling in times of crises and confusion, they retain a strong moral compass. However, attention to business ethics provides numerous other benefits, as well (these benefits are listed later in this document).

Note that many people react that business ethics, with its continuing attention to doing the right thing, only asserts the obvious ( be good, don’t lie, etc.), and so these people don’t take business ethics seriously. For many of us, these principles of the obvious can go right out the door during times of stress. Consequently, business ethics can be strong preventative medicine. Anyway, there are many other benefits of managing ethics in the workplace. These benefits are explained later in this document. (Extracted from Complete (Practical) Guide to Managing Ethics in the Workplace .)

Managing Ethics in the Workplace

Managing Ethics Programs in the Workplace

Organizations can manage ethics in their workplaces by establishing an ethics management program. Brian Schrag, Executive Secretary of the Association for Practical and Professional Ethics, clarifies. Typically, ethics programs convey corporate values, often using codes and policies to guide decisions and behavior, and can include extensive training and evaluating, depending on the organization. They provide guidance in ethical dilemmas. Rarely are two programs alike.

All organizations have ethics programs, but most do not know that they do, wrote business ethics professor Stephen Brenner in the Journal of Business Ethics (1992, V11, pp. 391-399). A corporate ethics program is made up of values, policies and activities which impact the propriety of organization behaviors.

Bob Dunn, President and CEO of San Francisco-based Business for Social Responsibility, adds: Balancing competing values and reconciling them is a basic purpose of an ethics management program. Business people need more practical tools and information to understand their values and how to manage them. (Extracted from Complete (Practical) Guide to Managing Ethics in the Workplace .)

Developing Codes of Ethics

According to Wallace, A credo generally describes the highest values to which the company aspires to operate. It contains the `thou shalts.’ A code of ethics specifies the ethical rules of operation. It’s the `thou shalt nots. In the latter 1980s, The Conference Board, a leading business membership organization, found that 76% of corporations surveyed had codes of ethics.

Some business ethicists disagree that codes have any value. Usually they explain that too much focus is put on the codes themselves, and that codes themselves are not influential in managing ethics in the workplace. Many ethicists note that it’s the developing and continuing dialogue around the code’s values that is most important. (Extracted from Complete (Practical) Guide to Managing Ethics in the Workplace .)

Developing Codes of Conduct

If your organization is quite large, e.g. includes several large programs or departments, you may want to develop an overall corporate code of ethics and then a separate code to guide each of your programs or departments. Codes should not be developed out of the Human Resource or Legal departments alone, as is too often done. Codes are insufficient if intended only to ensure that policies are legal. All staff must see the ethics program being driven by top management.

Note that codes of ethics and codes of conduct may be the same in some organizations, depending on the organization’s culture and operations and on the ultimate level of specificity in the code(s). (Extracted from Complete (Practical) Guide to Managing Ethics in the Workplace .)

Resolving Ethical Dilemmas and Making Ethical Decisions

Perhaps too often, business ethics is portrayed as a matter of resolving conflicts in which one option appears to be the clear choice. For example, case studies are often presented in which an employee is faced with whether or not to lie, steal, cheat, abuse another, break terms of a contract, etc. However, ethical dilemmas faced by managers are often more real-to-life and highly complex with no clear guidelines, whether in law or often in religion.

As noted earlier in this document, Doug Wallace, Twin Cities-based consultant, explains that one knows when they have a significant ethical conflict when there is presence of a) significant value conflicts among differing interests, b) real alternatives that are equality justifiable, and c) significant consequences on stakeholders in the situation. An ethical dilemma exists when one is faced with having to make a choice among these alternatives.

Assessing and Cultivating Ethical Culture

Culture is comprised of the values, norms, folkways and behaviors of an organization. Ethics is about moral values, or values regarding right and wrong. Therefore, cultural assessments can be extremely valuable when assessing the moral values in an organization.

Ethics Training

The ethics program is essentially useless unless all staff members are trained about what it is, how it works and their roles in it. The nature of the system may invite suspicion if not handled openly and honestly. In addition, no matter how fair and up-to-date is a set of policies, the legal system will often interpret employee behavior (rather than written policies) as de facto policy. Therefore, all staff must be aware of and act in full accordance with policies and procedures (this is true, whether policies and procedures are for ethics programs or personnel management). This full accordance requires training about policies and procedures.

Some Contemporary (Arguably) Ethical Issues

General Resources Regarding Managing Ethics in the Workplace

Social Responsibility

Social responsibility and business ethics are often regarding as the same concepts. However, the social responsibility movement is but one aspect of the overall discipline of business ethics. The social responsibility movement arose particularly during the 1960s with increased public consciousness about the role of business in helping to cultivate and maintain highly ethical practices in society and particularly in the natural environment.

Boards and Corporate Social Responsibility

General Resources Regarding Social Responsibility

There are many online resources in regard to social responsibility. The following will help to get your started.

For the Category of Ethics:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.

Recommended Books

Business Ethics

The following books are recommended because of their highly practical nature and often because they include a wide range of information about this Library topic. To get more information about each book, just click on the image of the book. Also, a “bubble” of information might be displayed. You can click on the title of the book in that bubble to get more information, too.

Social Responsibility

The following books are recommended because of their highly practical nature and often because they include a wide range of information about this Library topic. To get more information about each book, just click on the image of the book. Also, a “bubble” of information might be displayed. You can click on the title of the book in that bubble to get more information, too.

Also see





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The importance of ethics in business – Ethical business practices – Cadbury Schweppes #internet

#ethics in business

#

Ethical business practices
A Cadbury Schweppes case study

Page 1: The importance of ethics in business

Ethics concern an individual’s moral judgements about right and wrong. Decisions taken within an organisation may be made by individuals or groups, but whoever makes them will be influenced by the culture of the company. The decision to behave ethically is a moral one; employees must decide what they think is the right course of action. This may involve rejecting the route that would lead to the biggest short-term profit.

Ethical behaviour and corporate social responsibility can bring significant benefits to a business. For example, they may:

  • attract customers to the firm’s products, thereby boosting sales and profits
  • make employees want to stay with the business, reduce labour turnover and therefore increase productivity
  • attract more employees wanting to work for the business, reduce recruitment costs and enable the company to get the most talented employees
  • attract investors and keep the company’s share price high, thereby protecting the business from takeover.

Unethical behaviour or a lack of corporate social responsibility, by comparison, may damage a firm’s reputation and make it less appealing to stakeholders. Profits could fall as a result.

Along with good corporate governance, ethical behaviour is an integral part of everything that Cadbury Schweppes does. Treating stakeholders fairly is seen as an essential part of the company’s success, as described here: ‘A creative and well managed corporate and social responsibility programme is in the best interests of all our stakeholders – not just our consumers – but also our shareowners, employees, customers, suppliers and other business partners who work together with us. *’

Ensuring that employees understand the company’s corporate values is achieved by the statement of ‘Our Business Principles’ which makes clear the behaviour it seeks from employees.

Cadbury Schweppes’ good practice was recognised when it was voted one of the ‘most admired companies for community and environmental responsibility’ by Management Today magazine in 2003. It was also ranked second in the Food and Drink sector in the Business in the Community ‘Per Cent Club’ Index of corporate giving for 2003, with an investment in the community of around 3of its UK pre tax profits.

* Cadbury Schweppes Corporate and Social Responsibility Report 2002

Cadbury Schweppes | Ethical business practices





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7-Eleven, Volkswagen cases show why we should push back on – corporate ethics #free

#business ethics articles

#

7-Eleven. Volkswagen cases show why we should push back on ‘corporate ethics’

Professor of Management and Organization Studies, Macquarie University

Disclosure statement

Carl Rhodes does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.

The Conversation’s partners

The Conversation UK receives funding from Hefce, Hefcw, SAGE, SFC, RCUK, The Nuffield Foundation, The Ogden Trust, The Royal Society, The Wellcome Trust, Esmée Fairbairn Foundation and The Alliance for Useful Evidence, as well as sixty five university members.

Republish this article

We believe in the free flow of information. We use a Creative Commons Attribution NoDerivatives licence, so you can republish our articles for free, online or in print.

Chairman and major shareholder of 7-Eleven Russ Withers sits in a Senate Committee hearing in Melbourne. Julian Smith/AAP

There is perhaps no phrase more hackneyed in the corporate world than: “good ethics is good business”. Against the image of the ruthless business baron who will stop at nothing in the pursuit of wealth and power, the slogan tells us there is no friction between being good and being successful.

As luck should have it (for corporations that is) it is argued organisations can stand up and be righteous about their do-gooding, and this will actually lead to the achievement of self-interested business results. The cake can be had and eaten.

But does this ethical catch phrase really hold sway in the corporate world? Events this September suggest not.

The month of the corporate scandal

September 2015 was mired in corporate scandal. German car manufacturer Volkswagen was raked over the coals for installing software in its cars that ensured it falsely passed emission tests. Eleven million cars were involved over a period of seven years. VW’s CEO Martin Winterkorn resigned over the affair and now faces possible criminal charges .

American corporation Turing Pharmaceuticals was publicly vilified for its predatory pricing when it raised the price of the drug Daraprim by 4000%. This is a drug used to treat infections associated with HIV and AIDS. Turing’s CEO Martin Shkreli was described by the Washington Post as “the most hated man in America”.

In Australia trouble arrived at convenience store chain 7-Eleven when the ABC’s documentary series Four Corners revealed its use of exploitative and illegal work practices to reduce its labour costs. Employees were being paid less than half the legal minimum wage. Young and foreign workers were especially targeted. The scandal saw the resignations of 7-Eleven’s chairman Russ Withers, and its CEO Warren Wilmot.

Bad ethics is good business

Each of these scandals has been scrutinised in terms of business ethics. We are not talking here about contentious and nuanced debates about the nature of morality. In these cases the ethical issues relate to cheating, lying, deception, law breaking, exploitation, and merciless profiteering. As far as any common understanding of ethics is concerned these things are on the far side of the thick and grey line that separates right from wrong.

What do these cases have in common? Each one suggests there was an ethos in place in these corporations that held that “bad ethics is good business”. Seven years of highly orchestrated cheating at VW meant increased sales. In 2009 VW became the world’s biggest car manufacturer .

Institutionalised wage fraud and labour exploitation at 7-Eleven kept store costs down, increasing profits both for franchisees and (especially) for the parent company. 7-Eleven has twice been names Australia’s “franchisor of the year”. Price gouging at Turing meant a drug listed on The World Health Organization’s essential medicines list could bolster the company’s profits by exploiting the sick and vulnerable.

Just don’t get caught

The “bad ethics is good business” approach was going well for these businesses until they got caught. These three cases have triggered debates still raging in all sectors of society. Heads have rolled and bottom lines are jeopardised.

Does this really confirm that “bad ethics is bad business”? Of course not. There is no doubt many other corporations are profiting handsomely from deceit, lies, fraud and exploitation. The scandals of September 2015 show that “bad ethics is good business … unless you get caught”.

It’s not just about not getting caught. It is also about the political, legal, social and economic implications of being found out. In the cases of VW, 7-Eleven and Turing there has been a massive public and media outcry about their reprehensible and selfish behaviour.

Bringing these corporations to justice was not the work of one heroic individual, nor the result of government action. It was a collective effort that involved NGOs, scientists, academics, politicians, the media and the general public. This was a victory of civil society and democratic dissent.

So, we can reformulate our proposal: “Bad ethics is good business … unless you get caught … and as long as you aren’t the subject of a public outcry”.

Democratic business ethics

When corporations speak of business ethics their idea is that they can keep it all in house. The ethics of business is largely seen as a matter of corporate self-regulation so that pesky outsiders won’t stick their noses into corporate affairs. The September scandals suggest an entirely different ethics.

If we want ethics in business, what we need is more corporations being caught and more public outcry. For business ethics to be effective they must be pushed onto corporations against their will. Business ethics is democratic, not corporate.

What we can learn from the business events of September is that ethics cannot be left to corporations themselves. Business ethics requires a vigilant democracy where the public and its institutions will hold corporations to account for their actions.

Business ethics, to borrow a phrase, is about keeping the bastards honest.





Tags : , , , , , , , , , , , ,

What are business ethics? Business ethics and corporate social responsibility – Anglo American #franchise

#business ethics

#

Business ethics and corporate social responsibility
An Anglo American case study

Page 2: What are business ethics?

Business ethics are moral principles that guide the way a business behaves. The same principles that determine an individual s actions also apply to business.

Acting in an ethical way involves distinguishing between right and wrong and then making the right choice. It is relatively easy to identify unethical business practices. For example, companies should not use child labour. They should not unlawfully use copyrighted materials and processes. They should not engage in bribery.

However, it is not always easy to create similar hard-and-fast definitions of good ethical practice. A company must make a competitive return for its shareholders and treat its employees fairly. A company also has wider responsibilities. It should minimise any harm to the environment and work in ways that do not damage the communities in which it operates. This is known as corporate social responsibility.

Codes of behaviour

The law is the key starting point for any business. Most leading businesses also have their own statement of Business Principles which set out their core values and standards. In Anglo American s case, this is called Good Citizenship .

A business should also follow relevant codes of practice that cover its sector. Many companies have created voluntary codes of practice that regulate practices in their industrial sector. These are often drawn up in consultation with governments, employees, local communities and other stakeholders. Anglo American has played an active part in initiatives such as the Extractive Industries Transparency Initiative, the United Nations Global Compact and the Global Reporting Initiative.

Anglo American has also contributed to the Voluntary Principles on Security and Human Rights. This code sets out principles and practices for ensuring that a company s need to ensure the security of its employees and operations in volatile countries does not adversely impact upon the local population. Thus the Principles provide guidance on how both private and public security forces assigned to protect a mining operation or an oil and gas facility should be vetted, trained in human rights, monitored and controlled.

Anglo American also aims to ensure that it plays a role in protecting the human rights of its employees and local people in countries in which it operates. The company supports the principles set forth in the Universal Declaration of Human Rights.

All companies need to make a profit. However, Anglo American recognises that this objective must take account of ethics as shown in its statement on corporate responsibility: Though providing strong returns for our shareholders remains our prime objective, we do not believe that these can or should be achieved at the expense of social, environmental and moral considerations. Indeed a long-term business such as ours will only thrive if it also takes into account the needs of other stakeholders such as governments, employees, suppliers, communities and customers.

Stakeholders

An important process used by Anglo American is that of stakeholder engagement. This enables it better to understand the perspectives and priorities of external groups that are affected by its activities and to factor them into its decision-making processes. To support this work at a local level, Anglo American has developed a Socio-Economic Assessment Toolbox or SEAT process.

This toolbox helps managers to measure the impact of activities on the company and communities. It also helps to improve a mine s contribution to development through, for example, using its supply chain needs to generate new businesses or to improve the water or electricity infrastructure. They use this toolbox to engage with stakeholders including community representatives.

Sometimes communities have to be resettled, with government sanction, in order for important mineral deposits to be accessed. This can cause controversy and divisions in the communities concerned. International best practice sets out a number of key stages in such a process including the need for structured consultation, fair compensation and the importance of restoring and enhancing the livelihoods of people in their new locations.

Recently Anglo American has had to undertake two such relocations in South Africa at the villages of Ga Pila and Motlhotlo. These were undertaken with the support of the provincial government and local tribal leadership and after consultation with local people lasting for several years leading to agreement with each householder. New villages have been built with better houses and infrastructure and more land for farming. The relocation programme was voluntary. The relocation programme at Motlhotlo is still under way but at Ga Pila 98% of those living in the old village took up the offer to move to the new village.

Anglo American | Business ethics and corporate social responsibility





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Journal of Business Ethics #business #travel

#business ethics

#

Journal of Business Ethics

ISSN: 0167-4544 (Print) 1573-0697 (Online)

Description

The Journal of Business Ethics publishes only original articles from a wide variety of methodological and disciplinary perspectives concerning ethical issues related to business that bring something new or unique to the discourse in their field. Contributors examine moral aspects of systems of production, consumption, marketing, advertising, social and economic accounting, labor relations, public relations and organizational behavior. In order to promote a dialogue between the various interested groups as much as possible, papers are presented in a style relatively free of specialist jargon.

From its inception the Journal has aimed to improve the human condition by providing a public forum for discussion and debate about ethical issues related to business.

The style and level of dialogue involve all who are interested in business ethics – the business community, universities, government agencies and consumer groups.

FT 50 – This journal is one of the 50 journals used by the Financial Times in compiling the prestigious Business School research rank

Thomson Reuters Journal Citation Reports® Ranking by Category

– Ethics 8/52
– Business 47/120

Latest Articles

  • Impact Factor 1.837
  • Available 1982 – 2016
  • Volumes 137
  • Issues 668
  • Articles 7,517
  • Open Access 111 Articles




Tags : , , ,

The importance of ethics in business – Ethical business practices – Cadbury Schweppes #buy

#ethics in business

#

Ethical business practices
A Cadbury Schweppes case study

Page 1: The importance of ethics in business

Ethics concern an individual’s moral judgements about right and wrong. Decisions taken within an organisation may be made by individuals or groups, but whoever makes them will be influenced by the culture of the company. The decision to behave ethically is a moral one; employees must decide what they think is the right course of action. This may involve rejecting the route that would lead to the biggest short-term profit.

Ethical behaviour and corporate social responsibility can bring significant benefits to a business. For example, they may:

  • attract customers to the firm’s products, thereby boosting sales and profits
  • make employees want to stay with the business, reduce labour turnover and therefore increase productivity
  • attract more employees wanting to work for the business, reduce recruitment costs and enable the company to get the most talented employees
  • attract investors and keep the company’s share price high, thereby protecting the business from takeover.

Unethical behaviour or a lack of corporate social responsibility, by comparison, may damage a firm’s reputation and make it less appealing to stakeholders. Profits could fall as a result.

Along with good corporate governance, ethical behaviour is an integral part of everything that Cadbury Schweppes does. Treating stakeholders fairly is seen as an essential part of the company’s success, as described here: ‘A creative and well managed corporate and social responsibility programme is in the best interests of all our stakeholders – not just our consumers – but also our shareowners, employees, customers, suppliers and other business partners who work together with us. *’

Ensuring that employees understand the company’s corporate values is achieved by the statement of ‘Our Business Principles’ which makes clear the behaviour it seeks from employees.

Cadbury Schweppes’ good practice was recognised when it was voted one of the ‘most admired companies for community and environmental responsibility’ by Management Today magazine in 2003. It was also ranked second in the Food and Drink sector in the Business in the Community ‘Per Cent Club’ Index of corporate giving for 2003, with an investment in the community of around 3of its UK pre tax profits.

* Cadbury Schweppes Corporate and Social Responsibility Report 2002

Cadbury Schweppes | Ethical business practices





Tags : , , , , , , , , , ,

7-Eleven, Volkswagen cases show why we should push back on – corporate ethics #online

#business ethics articles

#

7-Eleven. Volkswagen cases show why we should push back on ‘corporate ethics’

Professor of Management and Organization Studies, Macquarie University

Disclosure statement

Carl Rhodes does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.

The Conversation’s partners

The Conversation UK receives funding from Hefce, Hefcw, SAGE, SFC, RCUK, The Nuffield Foundation, The Ogden Trust, The Royal Society, The Wellcome Trust, Esmée Fairbairn Foundation and The Alliance for Useful Evidence, as well as sixty five university members.

Republish this article

We believe in the free flow of information. We use a Creative Commons Attribution NoDerivatives licence, so you can republish our articles for free, online or in print.

Chairman and major shareholder of 7-Eleven Russ Withers sits in a Senate Committee hearing in Melbourne. Julian Smith/AAP

There is perhaps no phrase more hackneyed in the corporate world than: “good ethics is good business”. Against the image of the ruthless business baron who will stop at nothing in the pursuit of wealth and power, the slogan tells us there is no friction between being good and being successful.

As luck should have it (for corporations that is) it is argued organisations can stand up and be righteous about their do-gooding, and this will actually lead to the achievement of self-interested business results. The cake can be had and eaten.

But does this ethical catch phrase really hold sway in the corporate world? Events this September suggest not.

The month of the corporate scandal

September 2015 was mired in corporate scandal. German car manufacturer Volkswagen was raked over the coals for installing software in its cars that ensured it falsely passed emission tests. Eleven million cars were involved over a period of seven years. VW’s CEO Martin Winterkorn resigned over the affair and now faces possible criminal charges .

American corporation Turing Pharmaceuticals was publicly vilified for its predatory pricing when it raised the price of the drug Daraprim by 4000%. This is a drug used to treat infections associated with HIV and AIDS. Turing’s CEO Martin Shkreli was described by the Washington Post as “the most hated man in America”.

In Australia trouble arrived at convenience store chain 7-Eleven when the ABC’s documentary series Four Corners revealed its use of exploitative and illegal work practices to reduce its labour costs. Employees were being paid less than half the legal minimum wage. Young and foreign workers were especially targeted. The scandal saw the resignations of 7-Eleven’s chairman Russ Withers, and its CEO Warren Wilmot.

Bad ethics is good business

Each of these scandals has been scrutinised in terms of business ethics. We are not talking here about contentious and nuanced debates about the nature of morality. In these cases the ethical issues relate to cheating, lying, deception, law breaking, exploitation, and merciless profiteering. As far as any common understanding of ethics is concerned these things are on the far side of the thick and grey line that separates right from wrong.

What do these cases have in common? Each one suggests there was an ethos in place in these corporations that held that “bad ethics is good business”. Seven years of highly orchestrated cheating at VW meant increased sales. In 2009 VW became the world’s biggest car manufacturer .

Institutionalised wage fraud and labour exploitation at 7-Eleven kept store costs down, increasing profits both for franchisees and (especially) for the parent company. 7-Eleven has twice been names Australia’s “franchisor of the year”. Price gouging at Turing meant a drug listed on The World Health Organization’s essential medicines list could bolster the company’s profits by exploiting the sick and vulnerable.

Just don’t get caught

The “bad ethics is good business” approach was going well for these businesses until they got caught. These three cases have triggered debates still raging in all sectors of society. Heads have rolled and bottom lines are jeopardised.

Does this really confirm that “bad ethics is bad business”? Of course not. There is no doubt many other corporations are profiting handsomely from deceit, lies, fraud and exploitation. The scandals of September 2015 show that “bad ethics is good business … unless you get caught”.

It’s not just about not getting caught. It is also about the political, legal, social and economic implications of being found out. In the cases of VW, 7-Eleven and Turing there has been a massive public and media outcry about their reprehensible and selfish behaviour.

Bringing these corporations to justice was not the work of one heroic individual, nor the result of government action. It was a collective effort that involved NGOs, scientists, academics, politicians, the media and the general public. This was a victory of civil society and democratic dissent.

So, we can reformulate our proposal: “Bad ethics is good business … unless you get caught … and as long as you aren’t the subject of a public outcry”.

Democratic business ethics

When corporations speak of business ethics their idea is that they can keep it all in house. The ethics of business is largely seen as a matter of corporate self-regulation so that pesky outsiders won’t stick their noses into corporate affairs. The September scandals suggest an entirely different ethics.

If we want ethics in business, what we need is more corporations being caught and more public outcry. For business ethics to be effective they must be pushed onto corporations against their will. Business ethics is democratic, not corporate.

What we can learn from the business events of September is that ethics cannot be left to corporations themselves. Business ethics requires a vigilant democracy where the public and its institutions will hold corporations to account for their actions.

Business ethics, to borrow a phrase, is about keeping the bastards honest.





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