Business Ethics: Gender Pay Gap in Kwit Fit

This report discusses the ethical issues related to the gender pay gap in Kwit Fit, a car servicing and repair company in the UK. It highlights the negative impact of this practice and provides recommendations to improve the situation in the future. The report also discusses ethical theories and their application, ethical leadership, compliance, and integrity.

Running Head: BUSINESS AND CORPORATION LAW 0
Business Ethics
2/24/2020
Student’s Name

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Contents
Part 1..........................................................................................................................................................2
Overview 2
Ethical issues 2
Role of business 2
Affected stakeholders 3
Good and bad ethics 4
Recommendation 5
Part 2.................................................................................................................................5
Ethical theories and application 5
Pros and Cons of theories 6
Question 3..........................................................................................................................7
Ethical leadership 7
compliance and integrity 8
Conclusion 9
References.......................................................................................................................11

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Part 1
Overview
It is well known that each business work to earn profit but it does not mean that the
same should only think of shareholders. In addition to shareholders, other stakeholders
are also there that includes employees of the business, creditors, debtors, suppliers,
customers, society, and the environment. This report is based on the topic of the gender
pay gap, which is an emerging issue, and exists in many of the organizations. To
discuss this topic in more detail, the car servicing and repair company of the United
Kingdom, Kwit fit is selected. The purpose will highlight the issue of the gender pay gap
and will inform why the same is important to discuss from an ethical perspective. In
conjunction with this report will also highlight the negative impact of this practice and
recommendations to improve the situation in the future.
Ethical issues
To start the discussion on the subject, firstly it is to inform that the situation of the
company was way better in 2017 where it had a negative gender pay gap and female
employees have received more remuneration in comparison to the male employees.
Nevertheless, in 2018, the situation became worse where a 14% median gender pay
gap can be seen in favor of male employees. Here it is to say that the median pay gap
reflects the difference between middle-ranking man and middle-ranking woman (Lawrie
and Guibourg, 2019)
Here senior managers of the business are required to understand that this is an ethical
issue where the company failed to act in a fair, justified, and moral manner with its
female employees. The issue clearly shows that the company is treating its male and
female employees in an unequal manner where they are getting different pay for the
same work. It shows that the position of women is not as strong as males in society.
Role of business
Every business has some responsibility towards its employees where the same needs
to act responsibly and to pursue those actions, which are in the best interest of them. It
is a matter of morality and ethics where the business treating two workgroups differently

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based on their gender. It is not about equal pay given under the Equality Act 2010 but it
is something different that is also about the individual group of female employees of the
organization. Some people may think that the role of business in a society is to only
earn profit but whereas on the different side, some may think about its extended version
considering responsibility towards people and the planet.
Affected stakeholders
The issue is likely to affect the public image of the Kwit fit in a very influencing manner.
Every person wants to be an employee of a responsible enterprise. In addition to the
same, investors of today are smart, they want to be associated only with those entities
that care for its employees. Not only the investors but also consumer wants to purchase
the product of the company that works ethically. The issue of gender pay difference is
significant as it shows that the company did not pay any attention to the problem and
did the unequal treatment. It also shows that the diversification in the company only a
term to mention in annual reports and disclosures but the actual company does not care
about each group of employees. In this manner, the incidents are very much likely to
spoil the image of the company. In addition to being, an ethical issue the gender pay
gap is also a social issue and in this way, society does not consider such businesses as
responsible, which defeats their values (Priola, 2017). The issue of the gender pay gap
reflects an inefficient employment structure as it motivates the proportion of males in the
highest paying jobs and makes the situation of female employees worst. Neither
government nor non-government organization appreciates such business and therefore
this issue might influence the public image of the company. The gender pay gap
pursued by Kwit fit affected society very badly were not only female employees received
less remuneration but their situation has been presented weaker in comparison to male
employees. If to discuss the stakeholders affected out of this incident, this is to state
that the lead stakeholder group is female employees. The company has made fewer
payments to female employees and in this way discriminated between them and male
employees (McCulloch, 2019). Another stakeholder that affected is the government that
is certainly involved in this issue. Government is responsible to regulate equal pay
situation and the activities committed by Kwit fit clearly sees breaching those
regulations. There are multiple factors behind the issue of the gender pay gap and

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therefore the government cannot make a single policy to prevent this issue
(gwageg.weebly.com, 2020). The government seems to be one of the important
stakeholders as the incident has put a big question mark on the regulatory framework
and attracted the notice of the government. The third type of stakeholder is the
company itself. The reason for that the same has paid less payment to female
employees is not clear. Maternity leaves of them can be a potential reason but it
affected the image of the company adversely. Kwit fit has been reported as one of the
four top companies that reported a huge gender pay to authority. Further as mentioned
earlier, it is a social issue hence also affected UK society by making an impression of
the weak position of women. It shows that society values women and their work less
despite the efficiency and effectiveness of the same (Mccormack, 2015).
The last group of stakeholders that seems affected by this incident is investors of the
company that wants the organization to be more diverse and inclusive. They understand
the importance of closing the gaps. It is far clear that the production of the entity has
relied on employees and a good performance cannot be expected where employees are
not satisfied with the entitlements they received from their organization. The gender pay
gap affected the efficiency of Kwit fit’s employees that further affected the overall
working of the company and profits. Here investors and shareholders of the company
have been affected by this issue indirectly.
Good and bad ethics
Kwit fit is not the only one that has been unethical in its practice but some others are
also there. For instance, Nestle, multinational food and Beverage Company pursued
unethical action where the adopted irresponsible market practice to sell baby milk in
developing countries. Similarly, Coca Cola has also been marked as unethical in its
practices where the same violated the rights of workers at its bottling plants (Hunt,
2018). If to move the discussion towards the ethical companies, mention of Lush seems
to important which is a company of the UK providing fresh handmade cosmetics. This
company adopted many measures in the best interest of society and the environment
where the same refused to test on animals. Similarly, another company named Marks

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and Spencer has also proven itself as ethical by fulfilling its commitments towards the
environment (Hunt, 2019).
Recommendation
It is far cleat that the issue of the gender pay gap is huge and unethical as it affected
many of the stakeholders of the business. Now thinking of a solution is also required.
Some recommendations can be made here adopting which Kwit fit can be ethical in
actions. The first recommendation to ensure that in the shortlist of qualified candidates,
there is more than one woman. Secondly, the organization should set an internal audit
system to ensure that all the employees are getting their remuneration in a justified
manner. At the time of recruitment and promotions where the wage of employees are
used to decide, the company should encourage the negotiation skills of female
employees. Lastly, it is recommended to the company to be transparent in its working
by providing details about pay, promotion, and reward process. By considering these
recommendations, Kwit fit is expected to resolve the issue of the gender pay gap.
Part 2
Ethical theories and application
Ethical theories are different ethical concepts, which are there to guide the actions.
According to a different theory, a different course of action is considered as ethical as
these theories have their own beliefs. Some commonly known ethical theories are
deontology, virtue ethics, utilitarianism, and ethical egoism. Conduct of Kwit fit can be
judged through these theories. Two theories selected for the discussion hereby are
deontology, and utilitarianism. While discussing the first selected theory i.e. deontology,
this is to state that the same focus duties rather than the results. Under this theory,
every action is ethical if the same has been done according to duties irrespective of the
results. For example, if a government officer rejects a bribe for approval of a project that
could resolve water issues for many numbers of people then such rejection is treated as
an ethical act despite its negative results. If to apply this theory to the case of Kwit fit,
the actions of this company seem unethical as they have instituted a social gap
between male and female members of society. No business works in isolation and this

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manner, it becomes the liability of every business to consider the interest of society
while planning the business activities. Kwit fit performed unethical in actions where the
same provided different pay to different workers for the same work. It was the duty of
the company to treat all the social members equally and to promote gender equality
through its actions nevertheless the same did otherwise. Since the theory does not
focus on results hence focusing only on action, this is clear that the action itself was
immoral. Even if the same would have brought positive outcomes, the action looks
unethical as it is against the duty and social obligation of the business.
Now to understand another theory i.e. utilitarianism this is to mention that the same only
focuses on results and neglects the action itself. It is an adverse concept to the
deontology theory that is action-based. Under utilitarianism, every course of action is
treated as ethical if the same is expected to bring positive outcomes for a maximum
number of people. For example, if taking a bribe and doing an unallowed task bring
benefit to a greater number of people then the action of taking bribe does not amount to
an unethical task. To apply this theory to the studied case of Kwit fit, this is to state that
the same resulted in adverse situations for female employees. The company pursued a
gender pay gap and due to the same female employees have received less payment
even when the same has done similar tasks as their male colleagues. It presented their
weak situation in society and has represented that women do not have bargaining
power equivalent to males. When employees feel that are being fairly rewarded they
feel more involved in their work which also affected overall production. The actions of
the company did not make good to anyone apart from the organization. The
organization also benefited for short period only and in long term, it is also likely to bring
adverse results hence it can be stated that as per this theory also, the actions of Kwit fit
are not ethical.
Pros and Cons of theories
Actions of Kwit fit seem unethical according to both of the discussed theories, but here
this is also necessary to state that these theories have some pros and cons which are
necessary to discuss. Starting the discussion over the theory of deontology, this is to
state that it has many advantages and in many of the situations, it guides correctly.

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Firstly, it considers the value of every person. Unlike the utilitarian theory which focuses
on a group of maximum people, the theory emphasis on respect for all human being in
an equal manner (bbc.co.uk, 2020). The second benefit of the theory is that it provides
some certainty. One is not required to wait for the result to check whether a task is
ethical or not. Now to discuss disadvantages of the same this is to state that many of
the times an action is absolute wrong where it affects people negatively but this theory
suggests the performance of the action regardless of the outcome (Junker-Kenny,
2013).
Further to mention the pros of the theory of utilitarianism, this is to state that the same is
easy to use. One may think over the outcomes and can decide what is ethical to do
(connectusfund.org, 2019) . Secondly, it follows democratic principles. The majority of
the number and effect of an outcome on them decide what actions should be taken
(Kaswan, 2010). Nevertheless, the theory does not seem practical in the application in
many cases because happiness cannot be measured tangibly. Every person has
different emotions differently and the results are not sure in any situation. People under
this theory decide whether an action is ethical or not based on uncertain results
(connectusfund.org, 2020). The second disadvantage is that it allows people to pursue
actions ignoring their moral duties considering the happiness of others that sound rude
itself. Therefore, to state that none of the discussed theory is correct in every situation
and both of them has their advantages and limitation.
Question 3
Ethical leadership
Ethical leadership can be understood as a feature of a leader where the same guides
people to do the right things pursuing moral virtues in their behavior without abandoning
organizational or personal values. Honesty, justice, integrity, value-driven decision-
making are some of the key attributes of ethical leadership. To make organizational
culture-positive and ethical, there are many things that an ethical leader must keep in
mind. The role of an ethical leader becomes more crucial in an unethical organizational
culture where they are required to implement rules and code of conduct to regulate the

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behavior of followers. Ethical leadership promotes a high level of integrity that develop a
sense of trustworthiness and help subordinate to follow the vision by accepting the
same (theworkplacecoach.com, 2020).
Compliance and integrity
If to discuss the qualities of ethical leadership then it is to state that the same mainly
consist of fairness and honesty. An ethical leader is the one who treats subordinates as
well as another person at a workplace with dignity and respect. An ethical leadership
reflects where an employee believes in their leaders and knows that the same (leader)
would take care of and protect the rights of all the subordinates. Among all the features
of ethical leadership, compliance and integrity seem to be the most important. Now, this
is necessary to understand that in what ways these two aspects cab be pursued and
maintain at the workplace.
To answer the query made above this is to state that there are a thousand ways in
which integrity and compliance can be maintained. Firstly, Integrity can be understood
as a concept of methods, measures, expectations, principles, and outcomes. To
maintain integrity, a leader needs to ensure that he/she listening to others. Further the
same need to establish a culture of ethics along with the boundaries in the workplace.
This can be understood as an example that I have experienced at my workplace where
the last leader never listened to anyone. This made the situation poor and the
environment of the workplace unethical. The ways that are being discussed here can be
adopted to maintain integrity at ethical as well as the unethical environment. Another
way is to make the responsibilities clear. One another way to maintain integrity at the
workplace is to clarify the responsibilities (Jordan, 2014). I have learned this way from
my current manager where he makes the responsibility of every person clear to remove
conflicts. He has developed certain policy and procedure on a project basis where each
person know what he/she is expected to do. This practice of my manager has reduced
the number of conflicts and also turned employees into responsible ones. Employees
are integrated to their jobs where they take personal accountability of their actions. For
every person, ethics has a different meaning and in such a situation, to maintain
integrity development of ethics and compliance program seem to be another good

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option. The application of this program created a strong ethical culture. In several
pieces of research, it has been found that the ethics and compliance program helps to
create an ethical culture where people pursue integrity in their environment.
Further compliance can be maintained by adopting various measures. In my current
workplace, the leader has created many policies and practices that are accessible to all
the employees. These policies inform us to fulfill legal requirements on a timely basis
and ensure a good level of compliance. Further setting deadlines for each compliance is
another effort that can be made here. This step is very beneficial while ensuring that all
the legal requirements are being done on time. In our organization, the manager
ensures compliance by setting weekly meetings with subordinates to ensure that they
understand applicable compliance and would fulfill the same. A compliance audit is also
a good option that identifies the incidents where an organization fails to comply with the
applicable compliance. This measure becomes more important in case of an unethical
business environment where chances of breach of compliance are high in comparison
to the ethical environment.
In a business environment, the compliance management team is the one, which
manages compliance risk appropriately. Hence, this is another way in which compliance
can be maintained at ethical as well as the unethical environment. This team looks after
the compliance status and ensures all the compliance is being fulfilled on time. The
team is solely responsible for compliance management, in this manner reflects, and
promotes ethical leadership.
Conclusion
To conclude the report, this is to state that Kwit fit pursued the gender gap and therefore
ethics of the same came under a question of ethics. An ethical business environment is
needed for the performance of the ethical business practice. The actions of Kwit fit
cannot be justified ethically based on either deontology theory or utilitarianism. In the
last part of the report, the focus has been made on ethical leadership. Integrity, fairness,
honesty are some of the lead characteristics of ethical leadership. Where one side
integrity can be ensured by listing and development code of practice and standards,

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maintenance of compliance is based on the development of compliance team, the
conduct of compliance audit and setting up the deadlines.
References
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Kaswan, M.J., 2010, March. Happiness and Democratic Theory: Jeremy Bentham and
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