Business Ethics

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INTI International University *

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2203

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Management

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Nov 24, 2024

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docx

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Uploaded by jayquartarone

Business ethics Business ethics is a fundamental aspect of corporate governance that addresses the moral and ethical principles guiding the behavior and decisions of organizations. (TWIN, 2023) The different approaches to business ethics a) Profit Maximization Approach : It prioritizes financial gains above all else and may disregard ethical considerations. In the case of "Computing Supplies Ltd.," their decision to pay minimum wages to employees and relocate manufacturing abroad to cut costs demonstrates a profit maximization approach. b) Stakeholder Approach : It emphasizes considering the impacts of business decisions on all stakeholders. In this approach, "Computing Supplies Ltd." would take into account the welfare of its employees, the local community, and the environment when making decisions. They would prioritize fair wages, responsible disposal of electronic waste, and sustainable practices. c) Corporate Social Responsibility (CSR) Approach : This approach involves integrating social and environmental concerns into business operations and taking proactive measures to address them. In the case of "Computing Supplies Ltd.," they would have implemented policies and practices to ensure fair wages, safe working conditions, responsible recycling of electronic waste, and community development initiatives. (Scott, 2011) The ethical issues that could affect the operations Profit Maximization Approach Stakeholder Approach Corporate Social Responsibility (CSR) Approach

 Child labor and hazardous environmental practices : The documentary revealing children in Africa stripping down obsolete computers for gold, while exposing them to dangerous fumes, creates a significant ethical concern for CSL.  Minimum wage and living wage : Paying the majority of employees the minimum wage to maximize profit is an ethical issue, especially considering the rising cost of living. Failure to negotiate a living wage can lead to employee dissatisfaction, unionization, and negative publicity.  Relocation and subcontracting: Planning to relocate manufacturing abroad to cut costs raises concerns about potential exploitation of local workers, wage cuts, and negative environmental impacts, such as water usage reduction (Team, 2022) “Absolute” and “Relative” ethics Absolute Ethics: It refers to ethical principles that are considered universally right or wrong, regardless of the circumstances or consequences.  Exploitation of child labor: The use of child labor in hazardous conditions is universally considered unethical and a violation of children's rights.  Environmental pollution : Burning computers and releasing dangerous fumes into the environment violates ethical principles related to environmental protection and sustainability. Relative Ethics: Child labor and hazardous environmental practices Minimum wage and living wage: Relocation and subcontracting

It takes into account the context and specific circumstances when determining the ethicality of actions.  Wage policies: While paying minimum wages to employees to maximize profit may be considered ethically questionable in terms of fair compensation, it can be argued that the company is operating within legal boundaries. However, the failure to negotiate a living wage for employees despite their efforts and the negative impact on their quality of life raise ethical concerns.  Relocation of manufacturing : The decision to relocate manufacturing abroad to cut costs may be seen as a relative ethical consideration. While cost reduction is a legitimate business objective, the potential negative impacts on local communities, including reduced wages and water usage, raise questions about the company's social responsibility and the relative importance given to profit over local well-being. (mbaknol.com, n.d.) A mind map of the stakeholders (Sridharan, n.d.) Stakeholders Employees Children in Africa Clients Shareholders and Owners Senior Management Team

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The implications for each stakeholder when operating ethically • Employees – Fair wages, safe working conditions, and opportunities for professional growth and development. • Children in Africa – Protection of children's rights, ensuring their well-being, education, and preventing their involvement in hazardous labor. • Clients – Trust, reliability, and positive reputation due to responsible and ethical business practices. • Shareholders and Owners – Long-term sustainability, risk mitigation, and positive brand value. • Senior Management Team – Responsible leadership, adherence to ethical standards, and accountability for the company's actions. Potential conflicts between the stakeholders • With employees if the company resists providing a living wage or fails to address workplace safety concerns. • With children in Africa if the company continues to employ child labor or fails to support alternative education and protection initiatives. • With clients if the company's unethical practices, such as child labor or environmental pollution, damage its reputation and lead to contract termination. • With shareholders and Owners if the company's ethical practices, such as fair wages or responsible sourcing, impact short-term profitability or return on investment. • With Senior Management Team if the management prioritizes short-term profits over ethical considerations or fails to address the concerns raised by employees, clients, or other stakeholders. (Anon., 2023)

The regulatory framework for Corporate Social Responsibility (CSR) Corporate Social Responsibility (CSR) refers to the legal and policy guidelines that govern and encourage companies to operate in a socially responsible and sustainable manner .  Disclosure Requirements: This promotes transparency and enables stakeholders to assess a company's social and environmental impacts.  Labor and Employment Laws: These laws aim to ensure fair treatment and proper working conditions for employees.  Environmental Regulations: These regulations set standards for companies to minimize their environmental footprint and prevent harm to ecosystems and communities.  Supply Chain Regulations : These regulations encourage companies to assess and mitigate risks throughout their supply chains.  Consumer Protection Laws: Regulations that protect consumer rights, including accurate product information, fair pricing, and protection against fraud and misleading advertising. These regulations ensure that companies prioritize consumer welfare and ethical marketing practices. (indoramaventures.com, n.d.) References

Anon., 2023. bbc. [Online] Available at: https://www.bbc.co.uk/bitesize/guides/znf7nrd/revision/10 Carroll, A. B. &. B. A. K., 2019. Business and society: Ethics, sustainability, and stakeholder management. Cengage Learning.. s.l.:s.n. Ferrell, O. C., Fraedrich, J., & Ferrell, L., 2019. Business ethics: Ethical decision making and cases. Cengage Learning.. s.l.:s.n. indoramaventures.com, n.d. indoramaventures. [Online] Available at: https://www.indoramaventures.com/en/sustainability/social/csr/csr- framework#:~:text=Corporate%20Social%20Responsibility%20%2D%20or%20CSR,social%2C %20environmental%2C%20or%20economic. mbaknol.com, n.d. mbaknol. [Online] Available at: https://www.mbaknol.com/business-ethics/business-ethics-theories-and-approaches/ Scott, G. G., 2011. fibre2fashion. [Online] Available at: https://www.fibre2fashion.com/industry-article/5571/the-three-major-ethical-approaches- managers-might-use-in-making-ethical-choices#:~:text=Thereare%20three%20major%20ethical %20approaches,and%20disadvantages%20of%20each%20one. Sridharan, M., n.d. thinkinsights. [Online] Available at: https://thinkinsights.net/strategy/stakeholder-map/ Team, I. E., 2022. indeed. [Online] Available at: https://uk.indeed.com/career-advice/career-development/ethical-issues-in-business TWIN, A., 2023. investopedia. [Online] Available at: https://www.investopedia.com/terms/b/business-ethics.asp

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