Business Ethics and Responsible Management

This study material explores the importance of business ethics and responsible management. It discusses ethical dimensions, impact on stakeholders, and the role of ethical leaders and managers. The case study focuses on Ladbrokes: online way to save job.

Business Ethics and
Responsible Management

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
(a). Determination of ethical dimensions along with the impact over stakeholders..............1
(b). Application of two different ethical theories in determination of the views over the
concept of ethics in relation to the selected case study..........................................................4
PART 2............................................................................................................................................5
Identification of points that help to build as ethical leader and contribution of ethical manager
in conversion of an organisation to a high ethical standard...................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9
.........................................................................................................................................................9

INTRODUCTION
Business ethics is refers as the use of fair medium for operating business functions. This
includes the implementation and adherence of different policies and practices that will provides
an opportunity to deal effectively with controversial subjects. The aspects which are majorly
concerned under this concept in context to business includes corporate governance, insider
trading, discrimination, social responsibility and fiduciary responsibilities. This can be sustained
within the organisational environment, but in the situation of having effective management.
Responsible management has the duty related to compliance of all the necessary rules,
regulations, standards and legislations within an organisation. This will directly resultants into
creation of positive working culture where all the determinants like ethics, morals and principles
are exist in positive form. The case study selected for carrying research in part one of this report
is named as Ladbrokes: online way to save job. The main objective of part one report is
determining importance of business ethics within an organisation (Ahn and Park, 2018).
This report is divided into two parts. Part one covers about ascertainment of ethical
dimensions and impact over stakeholders, organisational role toward society, influence of good
and bad choice of ethics over organisation and application of the two different ethical theories in
determination of the points over aspect of ethics in selected case. Second part covers about points
that help in formulation of ethical leader and contribution of ethical manager in building
organisation of high ethical standard.
PART 1
(a). Determination of ethical dimensions along with the impact over stakeholders
The case chosen for further analysis and identification of the ethical issues is named as
Ladbrokes: The online way to save job. Ladbrokes is the organisation that has business of
Gambling activities. This was played for the purpose fun. The nature of this game is destructive
as lots of individual lost their everything i.e. money and families. This organisation has
headquarter in London, UK. In 2001, change had been introduced by the betting shops about
introduction of Fixed Odds Betting Terminals. This is the super slot machine which is used by
the punters regarding wining or losing big. Here, allowed to bet up to £100 in each 20 seconds.
This was the reason that large number of people are going to loose big amounts and lost their
everything. This becomes the reason that government took the step of limiting the amount of
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betting. So, in this condition government changed the rule and allowed the maximum limit of
betting is £2. Now, this changed the scenario from the perspective of an organisation where
betting shops are getting hue loses. From the overall changes, ascertained by an organisation that
required to reduce almost 5000 jobs and close down the 1000 shops out of 3500. This aspect has
huge loss for an organisation along with diminishes the growth opportunity too. In this regard,
decision was taken regarding persuasion of consumers behaviour about opening of their new
online account. Also, the two different approaches are adopted to support this decision and attain
results towards the direction of earning profit that targeting of vulnerable people to open online
account and safeguard the job of employees who got maximum score in the work of persuading
behaviour of consumers to open online account (Chandler, 2017).
The two main ethical issues exist in this case are application of unethical HRM practice
and targetting of vulnerable people. The justification in respect to the unethical nature of these
two issues is presented below along with factors that contributes in occurrence of same.
The factors which were main cause behind the occurrence of these issues includes
government intervention regarding setting up of betting limit, usage of inappropriate practice of
eliminating employees and targetting vulnerable people that are easy nature targets. The
government intervention is must because of the destructive nature of game. Big losses
pressurized the government to build new rules. The reason behind accepting scoring policy for
eliminating employees is speedy transfer of physical business to online. Also, fear of job loss
forces the employees to work hard beyond to their expectations. Target over vulnerable people
was provided because they are easy to influence and persuading their behaviour is simple
because of the nature of availing continuous gambling activities (Cui, Jo and Na, 2018).
The two main issues are unethical in nature because using HR policy for safeguarding the
job through scoring high in persuading the behaviour of consumers to open online account
irrespective to their contribution towards an organisation, period of employment, experience etc.
In actual, mentioned other aspects are main factors to ascertain about acceptance of candidate for
job or not. This creates the negative impact over the workability of employees that breaks their
trust towards the practices of an organisation. Other practice of targeting vulnerable consumers is
unethical because it is the prime duty of an organisation to safeguard the interest of consumers
but here, focus is provided over vulnerable and addicts that can be easily attract towards online
gaming activities.
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The key main stakeholders of the organisation are employees, consumers, government,
investors etc. All these are important part of an organisation and help them in operation of their
business activities in market. Employees of an organisation have the main work related to
carrying business activities, customers are involved in business through usage of betting
facilities, government work towards regulating operations and investors through investing
amount in business activities. The interest and power of all in organisational operations is of
important in nature. This was the reason that impact over some stakeholders is high. The major
impact was ascertained by employees and investors. Employees have to lose their jobs on the
position of scoring low points. So, employees are effected in way of jobless in future due to
firing up from their positions in case of non fulfilment of targets. Investors are going to be bear
loss due to the occurrence of situation like elimination of 5000 employees and closing down of
1000 shops. Investors are affected in the manner of losing invested amount (David and David,
2016).
The organisations needed to think that common role of business in society will be provide
such products and services which are qualitative in nature and able to provide some value to end
consumers. They have to adopt such approaches which are always beneficial from the point of
view of consumers and society like providence of quality products at reasonable price, less
environmental pollution due to their business activities and donation towards development of
societal infrastructures. Organisations are also required to change their objective of profit
maximisation towards society and economic development of nation. They have to focus over
creating large number of job opportunities to provide jobs to unemployed and contribute towards
the reduction in rate of unemployment in nation.
Ethics is the important aspect that has direct positive or negative impact over the
operations of an organisation operating in all over the world. It is must for all to adopt good
ethical practices to grab positive contributions towards an organisation. In case, organisation
does not adopt the ethical practices and focus over usage of unethical practices then this will
have long term negative impact over their operations along with its image in market. Some of the
examples are presented below to provide the same;
TATA motors is the organisation that provides large number of profit amount towards
the development of society (Eriksson and Svensson, 2016). They work with the aim of
contributing towards the society along with earning profit. This is the ethical practice of
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returning back to society in some effective way that aid towards developing and improving new
determinants in society. In this regard, the programmes were started includes Aarogya for health,
vidyadhanam for eductaion, seva for volnteering etc. From all these exercises positive impact
was ascertained by organisation related to high brand image, profitability, employee engagement,
consumer satisfaction and government support. This clearly depicts the positive impact of
adopting effective ethical practice upon business operations of an organisation (TATA CSR,
2019).
Volkswagen is the organisation where its official indulge in the activities related to use of
devices to hide pollution in emission testing. They take the help of unethical practice to operate
function in market. After the determination of this act, negative impact was ascertained by an
organisation in the form of taking back all the cars that reduces the profitability of an
organisation in market. Also, the impact was seen over the brand image that resultants into loss
of market share. It is clear that adoption of unethical practice resultants into negative impact over
business (Use of defeat device by Volkswagen, 2019).
It is recommended to the organisations exist in all over the world that adopt the practices
which are ethical in nature includes creating job opportunities, providing quality product at
reasonable cost, focus over elimination of negative impact of business activities over
environment and adoption of approaches which are beneficial for both employees and consumers
of an organisation. All these practices help in the way of building effective working culture along
with building unique brand image in market which will be distinct from other competitive
organisations (Frynas and Yamahaki, 2016).
(b). Application of two different ethical theories in determination of the views over the concept
of ethics in relation to the selected case study
The two theories which are selected to understand the view over ethical issues exist
within the case study includes Utilitarianism and deontology.
Utilitarianism: This theory of ethics focus over determining the large number
determinants that can get benefits from the decision irrespective to the loss for any other or
inappropriate in nature. In accordance to this theory, the two decision about focusing over
vulnerable consumers and retaining the employees able to persuade the behaviour is ethical in
nature. This is so because the number of stakeholders which are going to be benefited from this
decision includes employees, consumers and investors (Hamidu, Haron and Amran, 2015). This
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majority proves the decision ethical in accordance to the idea of this theory because large
number of stakeholders are get the benefits. The one who loose is government as their step
regarding reduction in destructive business activities will be not work in future. Originally,
approaches adopted by an organisation is not ethical but as per the view of this theory it proves
ethical in nature. The negative impact of this idea in future will be that unable to grab the trust of
stakeholders which are working for the development of society or in positive direction.
Deontology: It is the theory of ethics which focus over moral of decision. In this regard,
the two decisions taken are not correct morally as effective penetrate is not done with employees
and targetting vulnerable is inappropriate in manner. This proves as per the idea of this theory
that both the decisions of an organisation unethical in nature. The benefit of this theory will be as
help in development of effective operations of an organisation which have positive impact over
end users. This will aid growth in positive direction (Hwang and Chung, 2018).
PART 2
Identification of points that help to build as ethical leader and contribution of ethical manager in
conversion of an organisation to a high ethical standard
Leaders and managers are different from each other on the basis of their functioning and
role perform within an organisation along with the qualities and characteristics possess by them.
The main role of leader within an organisation is motivate the workforce and build working
environment. On the other hand, manager has the role about creation of standards and allocation
of duties and responsibilities in accordance to the capabilities have by employees. Both are
considered to be ethical in nature in performance and completion of activities, when able to
deploy activities fairly without any discrimination and biasness. In general, ethics are principles
which are must to be adhere by all present within an organisation (Kourula, Pisani and Kolk,
2017). The main purpose of this concept is to build uniformity where all work equally by
adhering existing standards. According to me, there are some qualities that are must to have by
an ethical leader includes respect towards all member's of team, valuing their contributions,
compassionate towards them, providence of equal opportunities, generous in nature and
consideration of the opposing viewpoints too. All these qualities help the leader to be ethical in
nature while performing their functions within an organisation. This will allows all the
employees to grab equal opportunities and become the importance part of an organisation. The
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justification of qualities as ethical is understood from the point that satisfied all the determinants
of the concept includes fair, reliable, effective, corporate governed, socially responsible and anti
discriminative in nature.
In accordance to me, the relation between ethical leader and manager is direct. Unethical
behaviour of any one resultants into non performance of ethical functions by another. The reason
behind is interrelated nature of functions. For ex., If manager is unethical in nature and build
biased standards in nature then not possible for ethical leader to adopt and adhere same while
performing their functions and if manager is ethical & formulate common standards then
unethical behaviour of leader restricts their application at ground level. So, the relationship
between both is direct that supports each other in formulation of sustainable working culture
which will be ethical in nature for longer period of time.
The organisation will be ethical when its operating authorities are performing activities
ethically. The main responsibilities to handle different organisational activities is over managers
of an organisation (McLeod, Payne and Evert, 2016). So, if manager is ethical in nature and
perform their functions ethically then this will automatically creates the ethical culture within an
organisation. This will also supports the employees of an organisation to adopt ethical practices
in completion of their activities and create overall ethical working environment. Finally, this will
allows the organisation to attain the mark of ethicality in market because adhering effective and
common practices help to deliver positive results which are qualitative and differentiate from
others.
The role of my own personal ethics is also prime in development of ethical environment.
I have the ethics related to providence of equal opportunity, adherence of standards, listening to
the views of others etc. This provides the opportunity to spread positive environment at
workplace that also motivates others to adopt same practices in performance of their functions.
This will creates the chain where everyone perform activities by considering others belief's &
values that support in completing organisational objectives instead of focusing over individual
goals.
According to me, the major conditions that will promotes the presence of unethical
practices and policies within an organisation includes non consideration of the views of each
other, non supportive behaviour of manager and leader , negative relationship between manager
and leader, non adherence of common values, beliefs and norms etc. For ex., if managers and
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leaders are not going to consider the views of other then employees are also not going work in
the faith of an organisation that resultants into deliverance of low quality products. So, this will
creates the structure and environment where no one have trust over each other and work in
accordance to their own preferences.
There are many values and methods which help the organisation to develop themselves as
ethical in market (Setó‐Pamies, 2015). These values and models provides an opportunity in
development of the culture of complying corporate governance norms, social responsibility
activities, anti discrimination policies etc. The some of them values and tools are known as
implementation of common norms and principles of working and adherence of democratic style
of leadership within an organisation. Adhering common principles help to bring equality among
all the different personnels work within an organisation. This will creates the trust that all equally
important irrespective to their post and role. This trust will be further turns out as development of
ethical working culture within an organisation. This value or practice has great importance
towards creating environment which will be responsible for long term growth of an organisation.
Implementation of democratic leadership style within an organisation provides an opportunity to
all the employees regarding sharing of their own ideas and working on the basis of own values
and belief. Under this leadership style, equal power is provided to all in relation to share their
views and perform activities (Waddock and Bodwell, 2017). The ethical nature of organisation
will be build in the form of supporting environment where all wants to work for each other in
accomplishment overall organisational objectives. So, the compliance of such value and tool has
great importance within an organisation in direction of creating ethical environment along with
satisfaction.
CONCLUSION
It has been concluded from the above report that ethics is important aspect to adhere
within an organisation for the purpose of attaining success in market. Business ethics provides
the opportunity to maintain effective level of culture and performance capabilities in accordance
to the needs exist in market. The role of management is prime in nature in relation to
implementation of ethics, principles, norms and belief within an organisation. The importance is
ascertained in the manner of high productivity, good employees, team work, less employee
turnover and high profitability. The most important role of any kind of business within an
organisation is to satisfy the demand of customers. They also have the obligation that not only
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work for profit but contributes towards the society in their positive development. The main
ethical issues identified from the case is related to use of ineffective HR practice and
pressurisation over vulnerable consumers. The main stakeholders of an organisation which are
affected includes employees, consumer, government etc. The major impact was ascertained over
the employees and consumer. The use of ethical theories is effective in nature regarding
identification of deep information on ethical issue. The qualities which are important to have
ethical leader includes fair, respect towards all member's of team, valuing their contributions,
compassionate towards them, providence of equal opportunities and generous in nature. The role
of leader and manager in development of ethical organisation is prime through acceptance of
effective tools and values.
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REFERENCES
Books and Journals
Ahn, S. Y. and Park, D. J., 2018. Corporate social responsibility and corporate longevity: The
mediating role of social capital and moral legitimacy in Korea. Journal of Business
Ethics. 150(1). pp.117-134.
Chandler, D., 2017. Strategic corporate social responsibility. SAGE Publication: Thousand
Oaks, CA, USA.
Cui, J., Jo, H. and Na, H., 2018. Does corporate social responsibility affect information
asymmetry?. Journal of Business Ethics. 148(3). pp.549-572.
David, F. and David, F. R., 2016. Strategic management: A competitive advantage approach,
concepts and cases. Pearson–Prentice Hall.
Eriksson, D. and Svensson, G., 2016. The process of responsibility, decoupling point, and
disengagement of moral and social responsibility in supply chains: Empirical findings
and prescriptive thoughts. Journal of Business Ethics. 134(2). pp.281-298.
Frynas, J. G. and Yamahaki, C., 2016. Corporate social responsibility: Review and roadmap of
theoretical perspectives. Business Ethics: A European Review. 25(3). pp.258-285.
Hamidu, A., Haron, M. and Amran, A., 2015. Corporate social responsibility: A review on
definitions, core characteristics and theoretical perspectives. Mediterranean Journal of
Social Sciences. 6(4). pp.83-95.
Hwang, J. and Chung, J. E., 2018. The roles of business ethics in conflict management in small
retailer–supplier business relationships. Journal of Small Business Management. 56(2).
pp.348-368.
Kourula, A., Pisani, N. and Kolk, A., 2017. Corporate sustainability and inclusive development:
highlights from international business and management research. Current opinion in
environmental sustainability. 24. pp.14-18.
McLeod, M. S., Payne, G. T. and Evert, R. E., 2016. Organizational ethics research: A
systematic review of methods and analytical techniques. Journal of Business
Ethics. 134(3). pp.429-443..
Setó‐Pamies, D., 2015. The relationship between women directors and corporate social
responsibility. Corporate Social Responsibility and Environmental Management. 22(6).
pp.334-345.
Waddock, S. and Bodwell, C., 2017. Total responsibility management: The manual. Routledge.
Online
TATA CSR. 2019. [Online]. Available Through: <https://www.tatamotors.com/corporate-social-
responsibility/>
Use of defeat device by Volkswagen. 2019. [Online]. Available Through:
<https://www.bbc.com/news/business-34324772>
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