It applies to all aspects f business conduct from boardroom strategies and how companies treat their suppliers to sales techniques and accounting practices. Ethics goes beyond the legal requirements for a company and is therefore a matter of choice. Business ethics applies to the conduct both individuals and to the organization. It is about how a company does its business and how its activities affect all of its stakeholders. Ethical behavior within a particular business is different from an ethical business.
An ethical business sets out from the beginning to work ethically and ethics from a part of its strategic aims. What Is Business Ethics? Business ethics is an organization which works to achieve corporate aims. The aims are dictated by the kind of organization itself. A public service organization, for instance, must deliver government services such as social services. A private business seeks profit for the benefits of its owners. Business managers in these organizations are paid to make decisions that will help the business to achieve its aims and objectives.
These decisions can be related to staff, financial investment, marketing strategy, products or location. Issues connected to ethics in business arise because some businesses make or operational or strategic decisions. These decisions can hurt local people, the staff and the customers. Other businesses make mistakes, sometimes, individuals within businesses act incompetently. Operational activities refer to anything a business does in order to achieve its aims. Marks & Spencer, USDA, Tests and Ginsburg each have retail outlets all over the I-J.
This is an aspect of these businesses: operating in order to sell. Their operational activities including buying, storing delivering and advertising, Ethical Activities An ethical business has a board agenda and focuses on making a positive nutrition to the community. An ethical bank such as Co- operative Bank, states that it seeks to make the world a better place by taking a different approach to banking. In the case of this type of business, ethics becomes at lease as high a priority as profitability.
Ethical trading and activities is increasingly recognized as an important aspect of business strategy. This applies especially to high profile companies e. G. Tests and USDA because good business ethics can generate a favorable public image. By contrast, failure to act responsibly can result in bad publicity, which can be extremely damaging to a business. Ethical Trading is essentially directed at employees to ensure that their working and living conditions are safe and decent. Ethical Trading is now an important issue, because there is convincing evidence that substantial abuse does occur.
For example, there can be: Very poor working/living conditions Failure to pay National minimum wage Failure to comply with Health & Safety legislation Extremely long hours Unlawful deductions from wages In the UK the driving force is the Ethical Trading Initiative (ET) which is an alliance of companies and trade unions working together to identify and promote Ethical trading. It has two main aims which are: To encourage companies to implement codes of conduct embodying agreed labor standards on human rights in the workplace To develop and encourage the use of best practice, monitoring and independent verification methods. Http:/ /www. Prestidigitation’s. Com/scarlet_blob/about/ Primary Primary is an Irish clothing retailer, operating in Austria, Belgium and Germany, Portugal, Spain, Netherlands and the KICK. Primary first opened in June 1 969 in Dublin. Primary sells clothes at the budget end of the market. The company sources cheaply, using simple designs and fabrics in the most popular sizes and the company buys stock in bulks. Ethical trading is a key part to Primary.
Primary have expanded their ethical trade team significantly on the ground in the countries Primary source from the UK to provide us port to their suppliers and they buying teams, ensuring that ethical trading is integrated in their supply chains. Http://www. Primary- disintegrating. Co. UK/newsman/FAQ Values Of Businesses In business a value is a measure of what something is worth. Schools and colleges have a monetary value. Personnel values are not written down because they are a state of mind.
Parents and careers might try to ensure hillier are bought up with good personal values. Personal values affect the way people behave, both at work and in their private life. Primary values: Primary is a subsidiary company within Associated British Foods (ABE), and as part of the ABA family we share its core values: taking care of our people, being good neighbors, and fostering ethical business relationship. We also share the group’s overriding principles in relation to human rights, employment conditions, business practices and engagement with suppliers and stakeholders.
As an international business with a global supply chain and growing retail base, we believe that business has a responsibility to act and trade ethically, and that by doing so, it can be a force for good. Primary directly contributes to the employment of more than 700,000 workers across three continents and ensuring that their rights are respected is important to Primary’ growth. Http://womb. Primary-disintegrating. Co. UK/our-values Professional Ethics Professional ethics can lead to dilemmas in the workplace.
An example of this would be the professional duty to whistled which conflicts with a sense of loyalty to a company. Professionals are governed by the rules of conduct laid own by their professional institutes. Failing to comply with these can result in professionals losing the right to practice. Professional ethics relates to how people behave in relation to their chosen careers. Doctors, Lawyers, accountants, engineers and other professionals are expected to behave in certain Ways or follow specific codes Of conduct. This helps to guard against their action bringing their profession into disrepute.
Individual ethical behavior Once a business grows beyond a particular individual it becomes a corporation with a legal personality all of its own. However, all corporations consist of individual personalities. No matter what ethical principles a corporation might claim to possess, if individuals within a business take unethical decisions, these may have negative effects. Corporate governance The governance of a medium to large business is important.. There re are rules about shareholders rights. The specific means by which individual businesses consult and control the various decision makers within the corporation are crucial.
When a business corporation is bought into existence someone Will have to make decisions. A limited company consists f board directors who are responsible for overarching strategies direction Corporate social responsibility Corporate social responsibility to the extent that a business considers what it does in relation to the wider world. All businesses are expected to think about what they do. The UK government encourages CARS; an example of this is in the following passage from the government’s gateway web ‘the government sees CARS as the business contribution to our sustainable development goals.
Essentially, it is about how a business takes account of its economic, social and environmental impacts in the way it operates’ Environment There are many examples of environmental issues and can relate them to many businesses, one of them is Ryan, It has many environmental problems and therefore an ethical issue. The emissions coming from the aircraft that are believed to have a bad effect on the earth’ atmosphere is leading to global warming, which affects everyone. It is now widely felt that most of the global warming that has taken place over the last 50 years has been caused by human activity.
The emission of carbon dioxide into the earth’s atmosphere, these are cause by petrol engines, oil burning and coal burning among other industrial activities. Some facts regarding global warming include the following: Seven of the wardresses in the 20th century were in the 1 ass’s. Since the start of the 20th century, the earths average surface temperature has increased by 0. C The 20th century saw temperature increases greater than in the previous 400 – 600 years. Some effect of global warming includes: The arctic ice pack has lost approximately 40 per cent of its thickness in the last 40 years.
Mountain glaciers all over the world are melting all over the world are melting Plants and animals are changing their range of behaviors in response to climate change. Global see levels have risen three times faster over the last 100 years than over the previous 3,000 years. Sustainability While there is no universal agreement on this, the evidence is Strong that our planet cannot sustain for too long increasing levels of industrial development – particularly development that uses carbon dioxide which then produces technology. This is a sustainability question and is something that affects all of us.
Human Rights Human rights revolve around some very important questions, many having to do with discrimination. E. G. It is illegal in the Lookout treat people differently on he grounds of race, gender, religion, sexual orientation or disability. These are basic human rights. Other human rights are also built into the legal system. We are entitled to a contract of employment, to work part time, to be able to join a union and to have a hearing against wrongful dismissal. Corruption Corruption arises in many forms and can be a major public concern.
A person or a business corporation is corrupt if they use influence or unfair means to gain business or personal advantage. Local councils may employ a lot of building companies to carry our construction work in their areas e. G. O build roads, bridges and houses. An example of corporation is if the one of the officers or councilors are related to a builder and that builder was given the job. These are examples Of serious corruption. Trading fairly Fair trade is where a business is carried on in an open manner, it also when competition takes place on grounds that are equal for all parties.
Furthermore, fair trade is where consumers can feel secure that the goods and services they are buying are going to be of satisfactory quality. Legal and urge Traitor compliance Regulatory compliance describes the goal that corporations or public agencies aspire to achieve in their efforts to ensure that personnel are aware of and take steps to comply with relevant laws and regulations. Due to the increasing number of regulations and need for operational transparency. Also, there are several areas of law that businesses must follow.
These are designed to protect a business’s consumers, its employees and others in the wider environment. Consumer Law When a consumer makes a decision to buy something there is an elements of trust involved. An unethical trader could give a false description of something or overcharge for a product. Businesses are therefore subject to the law. It is illegal to give a false description or to mislead consumers. This body of law is known as Consumer protection law. Consumers have rights and businesses must respect these.
The well-known acts of parliament in this area are: The trade description act 1968 The sale of good act 1 979 The consumer protection act 1987 These acts give ministers the right to make future regulations that further control what businesses can do. Business practices the law covers the main ethical issues that can affect many hey stakeholders in a business, including consumers, staff and the neighborhood, but there is till a potential for actual business practice to fall short of legal requirements. If this was not the case, there would be no need for regulations. Businesses exist to achieve their aims and objectives.
Every business manager has a degree of pressure to meet targets. Managers themselves are employees and have senior management as well as shareholders to consider. These pressures can sometimes result in neglect or malpractice. A business manager may neglect to comply fully with health and safety regulations, because to do so would cause delay. An accident caused as a result of this will eave serious consequences for the business. Working Conditions When people start working for a business organization, they are entitled to a set of minimum working conditions, which are not just about wages and salaries.
They also cover aspects of work such as hours, holidays entitlement, privacy, harassment and discrimination. It is up to employers to create working conditions that are fair. Trade unions have the traditional role of defending workers rights against bad employers. Individual Ethical Responsibilities Individual as well as businesses have ethical responsibilities. Individual ethics determine THE basic values and standards of behavior. Management is responsible for staff working in a business. The human resources function tries to employ the right people who will carry out their job roles well.
It is up to the HER specialist, as well as line managers across a business, to make sure that staffs follow ethical guidelines of a firm. However, it is up to individuals to follow their own ethical principles at all times. Examples of poor ethical trading in Primary. One of Primary’s UK suppliers was found to be employing illegal workers and paying staff less than the minimum wage. Primary clothes were being made n India by factories using child labor, they sacked three suppliers in Tripper that had subcontracted the work to the factories using children after the news came in June last year.
Terms and conditions have not been improved in Bangladesh factories supplying Primary for two years. The first report had disparaged the same factories in Bangladesh for having precarious working conditions and ridiculous play. A member of the ethical trading initiative with a supplier charter, Primary appeared to tick all the boxes on preventing poor practice. Http://www. Dragonflies. Com/comment/Primary-pays-price-for- ethical-blunder/ 1 675975. Article Businesses including Primary will need to deal with ethical issues as it will give them bad publicity therefore give Primary a bad name and also they will lose customers.
Also if they are losing customers they will be losing profit as not many customers are coming into Primary. MI – Assess how a selected business could improve the ethics of their operations. Primary can deal with the issues that they are facing in many ways some of them are: Review of suppliers – if Primary get good reviews of suppliers they can put it on their website to show everyone that they are eating good reviews. Therefore it will try and clear the bad publicity that they have been getting form the public.
Go out to do stop checks – Primary can go out and do stop checks e. G. Primary can employee someone that goes to Bangladesh and see the working conditions if they are good or if they are bad then report back so then they can improve, and also see if they the staff are getting accurate wage. Also in Bangladesh where women represent 80% of the workforce in garment manufacturing these jobs (Primary jobs in factories) create important opportunities for poverty alleviation and women’s empowerment. However, women in developing countries offer suffer from anemia and poor hygiene.
In Bangladesh, Primary have partnered with BBS and the award foundation on the health enables returns (HER) project to provide health care education for women. The benefit of this programmer includes increased women’s health awareness and knowledge of where to access services when they need them such as visiting local hospitals and clinics. There is also a high empowerment impact, women are seen as leaders in their community; and within the factory, and overall communication improves. It is important that business trade ethically, because if they are not trading ethically they can face many problems.
Trading unite scaly can mean that businesses such as Primary will face bad publicity and therefore if they have bad publicity not many customers will enter their store. Trading unethically can also mean that customers, whether end users or supply links, could pressure the business. However, trading ethically can show that the business is strong and offers the company to stand out in markets. Also trading ethically can mean that the staff working for the business would be ore professional than other staff as they know that the business trades ethically.
Also a business that proves to trade ethically will have a reputation of a very considerate and respecting business. I personally think that Primary are responsible for ensuring ethical trading. Primary say that they do trade ethically, however if you go behind the company you will find out that they are not ethical as a Panorama video shows this. Primary sell their products at cheap prices this is because Primary get them at cheap prices, the reason for this is because the use of child labor and the wages Primary suppliers are eying the workers. Also Primary should not leave workers unsatisfied.
Child labor should not be used weather the products are cheap or expensive. It also against the human right to offer app a day as a wage for a child. Primary should also raise this matter with their suppliers, although Primary buy the products from their suppliers, they should still discuss the conditions and wage of the workers. I have never shopped at Primary and wouldn’t as they trade unethically. Many other people may feel the same way because of Primary trading unethically. This will also mean that Primary will be losing ore customers which may lead Primary to close.
If Primary start to trade ethically they would face many changes in a good way. Some of the benefits of this will be that they will have a good reputation and publicity and a good view in the press, this would also mean that they would get more customers shopping from their stores again because of all the good publicity. From this, the profits and prices of the business will increase therefore the shares will go high and shareholders will be happy. The staff at Primary will also be happy as they would get at last national minimum wage.
Primary have also improved their factories as the graph below shows the improvement achieved by those factories which had a rating at the end of 2008. All the factories that had a follow up audit in 2009, 44% improved their rating by a whole grade (grade 1 being the best and 3 the weakest). Nearly of these factories which were grade 3 at the end of 2008 improved by at least one whole rating by the end of 2009. This demonstrates the strength of Primary’s remediation programmer. Http://www. Primary-disintegrating. Co. UK/reporting_and_assurance/ performance_data Primary have improved their training by:
Developing a range of guidance of tools for suppliers and factory managers, focusing on code of conduct implementation, providing practical solutions for addressing common issues. Delivering six days of ethical trade training to all its buyers. All new buyers were required to undergo ethical trade trading as part of their induction programmer. Hosting two full day ethical trade workshops in the UK, attended by all UK suppliers who participated in session ranging from health and safety to employment law. Primary held two specialist health and safety full day workshops for Chinese suppliers.