Amazon and Ethics

This report evaluates the business ethics and practices of Amazon, including poor working conditions and tax evasion. Recommendations for promoting ethical practices are provided.

Amazon and Ethics

EXECUTIVE SUMMARY
Amazon is a multinational technology company which focuses on e-commerce and was founded
by Jeff Bezos in the year 1994 in Washington, United States. In the following report, business
ethics and practices of Amazon have been evaluated to determine the current poor working
conditions and tax-evasion unethical practices that are being implemented in the company. The
report evaluates that different group of workers and customers agree that ethics should be the
primary and main priority of an organisation which can improve its public image and goodwill.
Recommendations such as development of ethical standards and code of conduct, improving
working conditions and better compensation and proper payment of tax-obligations have been
provided to the management for promoting ethical practices at Amazon

Contents
INTRODUCTION...........................................................................................................................1
ANALYSIS......................................................................................................................................1
Amazon Ethics and CEO.............................................................................................................2
Amazon Ethics and Workers.......................................................................................................3
Amazon Ethics and Customers....................................................................................................3
CONCLUSION................................................................................................................................4
RECOMMENDATIONS.................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Business ethics can be termed as the moral principles and set of values which govern the
behaviour of an organisation in ethical dilemmas and in the wider-context of business
environment (De George, 2011). According to the ethical conduct of business, every decision of
the organisation should be evaluated from its positive as well as negative impacts on various
stakeholders such as customers, employees, suppliers, government, society and community.
Business ethics is significant for building a positive relationship between the business and the
society within which it operates. An organisation which follows ethical conduct improves its
public image and goodwill which also builds the confidence of the customers in its products and
services (Ferrell and Fraedrich, 2015). In the following case study, ethical and unethical practices
of Amazon are being evaluated by considering aspects such as poor working conditions, illness
and safety, tax-evasions etcetera. Amazon has faced criticism for funnelling of funds to escape
tax obligations and despite an increase in the revenue of the firm, the tax-payments have
decreased over the years. In a warehouse of the company near Birmingham, there were 118
ambulance call-outs in a period of three years as compared to another warehouse nearby owned
by TESCO Ltd. which had only 8 ambulance call-outs. In the following report, an attempt is
being made to evaluate the different perspective of management, customers and employees on
whether business ethics should be the main priority of an organisation and based on the analysis
and conclusion, provide recommendations that can be implemented for improving and promoting
the ethical conduct in the organisation.
ANALYSIS
Amazon being the global leader in retail industry, influences and impacts the world
community and society which makes it imperative for the company to follow an ethical business
conduct for co-creation of a positive work atmosphere with high development potential. With a
mega-corporation becoming a pervasive and ever present part of the daily lives of many people
across the world, an alternative to ethical business practices can’t be sought. This report
primarily aims to understand the perspective of different stakeholders at Amazon including top-
management, workers and customers whether ethics should be the main priority of the company
by conducting research from valid sources of information.
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Amazon Ethics and CEO
It is important to determine whether the CEO of Amazon considers business ethics as the
top-most and main priority of an organisation. Jeff Bezos, CEO of Amazon, has become the
wealthiest man alive in the world with the ownership of a trillion-dollar company that works in
the interest of customers. According to Jeff Bezos, business ethics is a key dimension for any
business organisation that can’t be escaped particularly when the organisation is a mega-
corporation with worldwide presence. Success of Amazon in the global economy and market is
attributed to the customers of the company by Jeff Bezos and the vision of the company directs
its workforce to adopt a customer-centric approach in every practice and operation. According to
Jeff Bezos, customer-loyalty can be expected only till a point another company starts offering a
better service which has become the fundamental principle behind operations of the company
(Byers, 2007). In the context of work culture, customer-centricity takes priority which further
leads to pressure and uneven working shifts for the employees of the company. However, Jeff
Bezos has condemned the unethical work culture to the extent of lack of empathy in the business
organisation which he describes as a result of ‘callous management’. By pointing out the earlier
mistakes, Jeff Bezos has made efforts to move past these errors and adopt an ethical code of
conduct for human resource management of the company. However, this doesn’t lead to ethics
being the first priority for the company and customer service still retains its position leading to
presence of some extent of unethical conduct in the company. It has been observed that
employees are expected to fear as a motivational strategy for innovation and creativity. Amazon,
despite an increase in the income from £24 million in 2016 to £72 million in 2017, paid tax
worth £4.6 million in 2017 falling from £7.4 million in 2016 (Amazon Tax, 2018). On tax-
evasion using funnelling and an apparent legal strategy, Jeff Bezos thinks his critics are wrong
and company adheres to the ethical business practices. In a warehouse of the company near
Birmingham, there were 118 ambulance calls in a period of three years which determines the
working conditions at the company (Briken and Taylor, 2018). However, Jeff Bezos is of the
opinion that working conditions of the company are suitable and healthy and in order to provide
the customers a high-quality service, pressure of work can sometimes be evident which is not
unethical (Jeff Bezos responds on working conditions, 2018). Based on above discussion, it can
be analysed that Jeff Bezos certainly doesn’t regard ethics as the main priority of the company
and customer-centricity takes over business ethics at Amazon. As per this discussion and
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analysis, ethics for the CEO of Amazon, holds priority only till the extent it doesn’t affect
company’s vision of being the market leader in customer retail service.
Amazon Ethics and Workers
To understand the opinion of workers at Amazon for ethics to be the main priority of the
organisation, it is important to consider existing criticism from different dimensions. As per the
opinion of employees working at the factory and warehouses of Amazon, high targets and
unsuitable working conditions takes priority over business ethics. Workers at the warehouse near
Birmingham reported 118 ambulance call-outs in a period of three years to showcase the
unsuitable working conditions with high mental pressure and exert (Amazon.com Inc., 2019). It
has been reported by the workers of the company that in order to fulfil high targets and quick-
shipping services, working conditions inside the warehouses have become miserable with unfair
amount of working hours and over-time hours beyond the legal restrictions. As reported by the
Chinese workers, the temporary and contractual working agreement made by the company in the
region violates the laws and guidelines. Workers have also reported very low compensation and
wages which are not enough to maintain a decent standard of living considering the basic living
cost of the area (9 key issues with Amazon's corporate culture, 2018). As per the group of
workers protesting against the award being presented to Jeff Bezos in 2018 for innovation and
social responsibility, having no empathy or concern for the people working in order to realise the
vision of the company to provide a distinct and incomparable service to the customers is
unethical and should have no existence in any business organisation (Jeff Bezos responds on
working conditions, 2018). Workers at Amazon consider that business ethics should be the main
priority for any business organisation and every decision which is expected to impact a group of
stakeholders should necessarily be evaluated from the perspective of business ethics. It can be
analysed that low-salary, poor working conditions, lack of empathy etcetera are unethical
business practices which shouldn’t be the case for a mega-corporation like Amazon. Hence,
business ethics in the company should prevail over customer-centricity as the latter leads to poor
work-life balance, illness and severe health conditions for the employees delivering that high-
quality of service which is claimed by the company.
Amazon Ethics and Customers
Determination of the perspective of customers on whether ethics should be the main priority
of an organisation is very significant as customers are the primary stakeholders of any
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organisation. Ethical code of conduct and business practices have become particularly relevant to
the modern-day customers where information about the business practices of a company can
easily be accessed to form an opinion on its ethical rating. It has been observed that customers of
Amazon, despite being satisfied with the quality of service being provided by the company, have
noticed a spark in the unethical business practices of Amazon and started to lose trust and loyalty
for the company. Increasing labour cases have affected the reputation of the company and caused
an extremely severe damage to the image which the company had in the minds of its customers.
Tax evasion issues and the declining amount of corporate tax paid by the company despite of
increase in revenue and incomes have also made the customers of the company unconvinced
about the ethical business practices adopted by Amazon (Amazon.com Inc., 2019). During a
survey, only 41% of the customers of the company felt that Amazon shares its values, only 39%
of the respondents felt that the company adopts a fair compensation scheme and treats the
employees in an ethical manner and only 19% of the respondents felt that Amazon contributes to
solving and addressing important social issues such as global warming, climate change, animal
rights protection, gender rights, affluence of chemical hazards etcetera (Consumers Love
Amazon, But May Be Questioning Its Ethics, 2019). Customers have a belief that the
organisation that follows an ethical code of conduct in all aspects and decision-making of the
company is based on ethical evaluation, is the best suited company for satisfaction of their wants,
needs and requirements. Thus, it can be analysed that the customers of the company believe that
business ethics should be the main priority of the organisation and the response of Amazon
considering the criticism on various ethical grounds is not strong enough to justify its business
ethics standards and expectations.
CONCLUSION
It can be summarised based on the above analysis that unethical business conduct leads to
the damage in goodwill and image of a business organisation irrespective of the quality of goods
and services being offered to the customers. Amazon follows an approach to maximise value for
its customers and in the pursuit, business ethics takes secondary position which hampers the
employee satisfaction and results into conflicting interests with many other stakeholders of the
company such as customers and government. Jeff Bezos, CEO of the company, should promote
the ethical business conduct in the organisation and interests of the workforce should be given
due consideration. There exists a need to improve working conditions and other important
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aspects related to work culture in the organisation to focus on an overall comprehensive business
growth and development. It can be concluded that interest of employees, government and
customers should be harmonised by adoption of ethical business conduct and practice by
Amazon.
RECOMMENDATIONS
With an objective of promoting ethics and fair conduct in the organisation, the management
of Amazon can consider implementation of following recommendations:
1. The first and foremost step which can be taken by the management and CEO of Amazon
for promotion of ethical conduct and safeguarding the interests of the workers is creation
and development of ethical standards and ethical code of conduct which outlines zero-
tolerance policy for any unethical behaviour that may be demonstrated by any member in
the organisation irrespective of the power and position held by the person. It will help the
CEO of the company to mitigate any vagueness and ambiguity with respect to the ethical
practices of the company and ensure that every member of the organisation is on the
same page about the desired ethical behaviour and conduct.
2. Improvement of the current working conditions in the warehouses and factories of
Amazon is essential for promotion of ethical business practices. With the primary
objective of improving the workers condition, management of the company should
involve employees in the decision-making process and targets for daily work should be
set only after mutual agreement. Long and uneven working shifts with high work
pressure needs to be eliminated and enough breaks between the shifts should be provided
by the management to ensure mental as well as physical peace for workers. Moreover,
compensation and payment needs to be revised after considering the basic cost of a
decent standard of living in the area and an equal chance for promotion and growth of
employees should be provided.
3. For promotion of business ethics in a comprehensive and effective manner, management
of Amazon also need to change its current tax-evasion planning and funnelling policies
which impact the image and reputation of the company. Ethical and a transparent process
of payment of tax-obligation as per the revenue and profits earned by the company
without any fabrication needs to be implemented by management of Amazon for
promotion of business ethics in the company.
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REFERENCES
Books and Journals
Briken, K. and Taylor, P., 2018. Fulfilling the ‘British way’: beyond constrained choice—
Amazon workers' lived experiences of workfare. Industrial Relations Journal. 49(5-6).
pp.438-458.
Byers, A., 2007. Jeff Bezos: the founder of Amazon. com. The Rosen Publishing Group.
De George, R.T., 2011. Business ethics. Pearson Education India.
Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases. Nelson
Education.
Online
Jeff Bezos responds on working conditions. 2018. [Online]. Available
thru<https://amp.businessinsider.com/jeff-bezos-responded-to-reports-on-amazon-
warehouse-working-conditions-2018-4>
Amazon.com Inc. 2019. [Online]. Available thru<https://www.ethicalconsumer.org/company-
profile/amazoncom-inc>
Consumers Love Amazon, But May Be Questioning Its Ethics. 2019. [Online]. Available
thru<https://www.marketingcharts.com/brand-related-108314>
9 key issues with Amazon's corporate culture. 2018. [Online]. Available
thru<https://www.beckershospitalreview.com/hospital-management-administration/9-
key-issues-with-amazon-s-corporate-culture.html>
Amazon Tax. 2018. [Online]. Available
thru<https://www.theguardian.com/business/2019/jul/07/amazon-25th-birthday-jeff-
bezos>
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