This assignment provides a detailed report on business ethics, including its importance, ethical dimensions, and impacts of different stakeholders' choices. It also discusses qualities for ethical leadership such as justice, honesty, respect for others, humanity, encouraging initiative, and value-driven decision making.
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Business Ethics and Responsible Management
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Table of Contents INTRODUCTION...........................................................................................................................1 PART 1............................................................................................................................................1 Ethical issue and the role of business in society.........................................................................1 Impact of ethical choices on stakeholders...................................................................................2 Two ethical theories....................................................................................................................4 PART 2............................................................................................................................................6 Qualities recognised for ethical leadership.................................................................................6 Creation of an ethical organisation.............................................................................................7 CONCLUSION................................................................................................................................7 REFERENCES................................................................................................................................8
INTRODUCTION Ethics are moral principles that represent a person or a group. Business ethics are much more deeper topic and more complex then simple trials faces by an individual. It basically determine how companies conduct themselves in their practice and policies, refers to system of moral principles and rules of conduct applied to business. In other word it can be defined a form of applied ethics or professional ethics, that examines principles or problem that arise in a business environment (Weiss, 2014). In this report the organisation chosen is Nike, Inc. is an American multinational corporation that is engaged in design, development, manufacturing and world wide marketing and sales. Such as footwear, apparel, equipment, accessories and services. This report is going to analysis an ethical case study of Nike, marketing including pictures of young blackmodel. It is going to identify ethical issues related to picture of model along with ethical theories. Moreover, discussing how ethical leader or managers manges business on high ethical standard. PART 1 Ethical issue and the role of business in society The Nike has launched the NikeLAb NRG Beryllium Balaclava x MMW but conduct the marketing of new product through picture of it worn by a young black model. It create a criticism at large level as it promote the gang inspired look among people which impacts negatively on mind sets of children and young individuals who are considered as future of their country. However, ethical issues in marketing can be linked to product, price, promotion and distribution in which promotional criticism is observed in due to new product of Nike Balaclava. There are several issues faced by Nike including certain dimensions which are given below – Social issue– This involves the personal values, morals and standards of behaviour of people living in a society (Crane and Matten, 2016). It includes problems relevant to these factors including promotional activities of specific company which hurts social values & norms ofpeople.However,thebalaclavaofNikehadattempttheirmarketingactivitieswith inappropriate pictures which conveys perception of promoting gang-inspired looks among society which is not suitable for people. In addition to this, people follow brands & their tag lines as businesses and their social activities of marketing highly impacts on mind sets of citizens. 1
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Stakeholders– The business organisations are required to obey and consider the ethical values of their stakeholders including customers, government authorities, employees, owners and investors. They all plays an important role for running business successfully along with attaining better profits with facilitate to achieve further growth of company (Godemann and et. al., 2014). In context of Nike, their new product i.e. balaclava has promoting activities that impacts negatively on society which disappoint government agencies, customers and other stakeholders in terms of not completing their desired needs. Additionally, government authorities and client's disappointment results into criticism of given product at large scale in society due to which Nike requires to stop these advertisements and spent money get wasted. Government– The government authorities has several rules and regulations which are required to be followed by every organisation while conducting operations and marketing procedures in proper way. It involves to conduct ethically correct processes and obey legal rules in order to provide required product to customers without harming them in any manner. In case of Nike their product of balaclavaresult into claims of people that it is promoting the gang culture through their business which may inspire youngsters to follow actually the same and that is not appropriate for the whole nation. Productimage– This involves the packaging and promotional features associated with it which make perception about specific product in minds of people. In context of balaclava product of Nike, they make their image of promoting gang inspired culture which is against ethics of society and impacts negatively on people which results into high criticism. It is necessary to analyse these ethical issues before promoting product among customers which facilitate to avoid such criticism those impacts negatively on good will of brand. Impact of ethical choices on stakeholders Ethics can be described as such rules & norms which make people know about right and wrong as per their own perceptions (Doh and Quigley, 2014). It involves that appropriate principles related to correct and inappropriate attempt by people regarding specific aspects. However, ethical norms based on personal values, beliefs, religious norms and thoughts to make view point about particular aspects. The business organisations should take suggestions of stakeholders including government, customers, employees and investors which provide support to analyse ethical norms which should be followed to avoid relevant issues in society. In context of Nike, they must take suggestions about ethical choices of stakeholders before launching and 2
promoting the product i.e. balaclava as it facilitate evaluate problem of gang-inspired culture and solved immediately at organisational levels. Moreover, it will provide support to remove that specific threat in order to gain positive response for customer. Meanwhile, impacts of ethical choices on stakeholders – Customers– The ethical rules and norms are responsible to provide correct path for conducting various business procedures and activities to complete their goals of increasing profits (Wood and et. al., 2015). It is helpful for an organisation to manufacture accurate products as per actual desires of consumers to satisfy them and motivating them to convince for purchasing through appropriate promotional activities. Moreover, it is essential to analyse actual ethical values of target customers in order attain positive response of people along with avoiding relevant problems. In context of Nike, they should considers ethical beliefs of clients and drop idea of pictures for promotion and adopt some another concept favourable to society. The idea of black model of given company impacts negatively on mind sets of youngsters and children as it reflects about gang culture. Staff members– The ethical norms should be followed by company because they provide support to fulfil needs of people appropriately without creating any social issue. It is helpful to boost up productivity as well as profitability of particular product which facilitate to improve incentives of employees working in organisation. The Nike ignore ethics regarding the balaclava product which results into criticism at large level which impacts negatively on image of that product due to that it will not able to gain desired profit. The efforts of marketing employees get wasted and incentives of them also get reduced. Government authorities– This involves different legal rules & regulations which are made by government authorities for protecting customers and ensure accuracy of services (Ferrero and Sison, 2014). It helps customers to avoid frauds and wrong attempts by companies with them and gain desired products to fulfil their actual neds and wants. In addition to this, companies pay taxes to government from their achieved profits which increase annual income of country which can be used in development of the nation. In case of Nike, they did not consider ethicalnorm and create social issue by their black model which impacts negatively on government by reducing their own profitability and increase expense of government agencies to solve relevant criticism. 3
Investors– The investors are people who invest money to collect overall capital of company which spent to conduct product and other related procedures to manufacture better quality of products respectively. It is necessary for business concern to increase their profits on which profit return of investors depends (Hoffman, Frederick and Schwartz, 2014). The criticism of balaclava product of Nike will not provide any profit to their investors as product image get affected by social issue of black model pictures which reflects about gang culture. Two ethical theories Ethical theories involves principles of morality and well defined standards of right and wrong aspects, it will provide support to an individual to conduct in terms of obligations, rights, rules, benefit for society, fairness and many more. However, the ethics encompasses human rights and responsibilities in such a manner which leads to a better life, language of right or right for citizens as well as society. Ethics can be classified into three categories including meta- ethics, normative- ethics and applied- ethics. The different types of ethical norms relevant to personal values, thoughts, religious beliefs and morals of people which make them capable to evaluate right or wrong aspects to select correct things to attempt in daily life. Moreover, there are several ethical theories such as Teleological or Utilitarian, Deontological, Virtue and System development. Thus, two of them are explained further – (Source: Deontology and Utilitarianism, 2018) 4 Illustration1: Deontology and Utilitarianism
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Teleological or Utilitarian Ethical Theory –This involves greatest good for people at large levels in order to fulfil their actual desires in proper manner. It can be considered as ethics that derives role of moral obligation to determine desired aspect to be achieved. However, it is a consequence based view of ethical values in which right & wrong attempts can be identified through results or outcomes. The Nike can obey this theory of ethics as it helps to avoid criticism in society to get rid off negative impacts on brand image by obeying certain principle differences among pleasure and happiness. Initially, happiness is linked with mind and remain for long duration but pleasure is connected to body for remaining short period of time. Moreover, happiness may encompasses pleasure & pain and it is observed that there is an evaluative component in happiness versus pleasure (Kumar and Steinmann, 2015). At the other hand, Nike can adopt the utilitarian theory as it helps them to make correct decision among with ensuring the accuracy of their choice. It will provide support to the business concern for evaluating forthcoming threats of outcomes regarding prepared decisions for launching new product i.e. balaclava. If Nike had adopted this ethical theory then they can analyse possible problems of promotional activity which facilitate to avoid criticism of the same for increasing gang inspired culture in society. Deontological Ethical Theory– This refers to rule based view of ethics to determine correct aspects through actions. It includes an effective idea that people should be treated with dignity and respect. However, it will provide support to determine an individual's duty and actions accordingly. In addition to this, this ethical model is more effective as well as efficient in order to establish healthy and strong relationships with customers. It will facilitate to attract new clients along with retaining the current ones in terms of improving profits of business which helps to achieve growth as well. Moreover, this theory is favourable to make healthy public relations with brand which facilitate to grab more profit share in market along with establishing strong position among competitive firms (Jones Christensen, Mackey and Whetten, 2014). In context of Nike, they are required to maintain appropriate public relations as it helps to reduce negative impacts of future problems with new products. Additionally, effective public relations may not create a high levelled criticism and they get feedbacks for changing the pictures which avoid negative effects in brand value in market. 5
PART 2 Qualities recognised for ethical leadership Ethical leadership can be described as to follow ethical values or norms to leadership and management styles to make appropriate decisions in order to improve productivity as well as profitability of an organisation. It involves the criteria making required decision by following codes of ethics as it facilitate to conduct particular activity in proper manner. However, it is necessary become an ethical leader because it helps to cooperate with sub- ordinates properly along with completing required targets with mutual understanding as people respect their leaders and obey instructions appropriately. There are different traits which should be gained by a person to be considered themselves as an ethical leaders and few of characters are given below – Justice & honesty– The ethical leader is required to always favour for fair justice top their sub- ordinates in terms of benefits or other problems exist between people. It is also necessary to remain honest towards team members in order to communicate about their performance to top level management and orders to higher authority to employees in accurate way. Respect others and humanity– The leaders is require to behave respectfully with each worker which helps to establish an appropriate personality among them so that they will obey every instruction in correct way. It is necessary to follow humanity in respect of understanding genuine problems of sub- ordinates as well as render support to them or solving the same. Encourage initiative– This involves to ask for suggestions from employees which facilitate to gather number of options to select the best one option to make correct decision. It is necessary to motivate people for providing their innovative ideas and concepts along with giving to them appropriate awards for success of particular thought of product. Moreover, it will facilitate to improve profitability of business and make people loyal; for company which reduce employee turnover as well (Setó-Pamies and Papaoikonomou, 2016). Value driven decision making –This can be described as to make decision and evaluate them before implementing to make sure that they are according to desired values of organisation. It includes to obey rules and policies of company while making decision to boost up brand image of in market along with satisfying sub- ordinates as well. Meanwhile, it is essential to make correct decisions to conduct operations accurately to fulfil actual desires of customers properly. 6
Creation of an ethical organisation Ethicalorganisationreferstotoestablishandrunbusinessbyfollowingoverall organisational ethics in appropriate manner. It involves principals and standards through which businesses can operate as per required idea in order to fulfil needs of customers by gaining better outcomes. However, it is necessary for them to conduct their production activities through applying acts of fairness, compassion, integrity, honour and responsibility. In addition to this, ethical values are helpful to analyse actual desires of people and facilitate to put efforts in correct direction for achieving set goals and objectives successfully. Moreover, there are several methods which can be used to organise an ethical business concerns in which some of ways are given below. Initially, it is necessary to establish ethical stance and understand staff members in proper manner so that they can performin accurate way in terms of improving their productivity with perfection. However, it involves to recruit people for ethics, demonstrate ethical standards while conducting operations and other relevant procedure of business. Moreover, it is necessary to provide training to make ethical decision making and give benefits or rewards for appropriate ethical behaviour of employees. Additionally, overall ethical norms and values should be followed to establish a correct ethical organisation properly. CONCLUSION From the above report, it is conclude that business ethics includes several ethical rules or norms which should be followed toestablish business properly along with earning better profits. It involves ethical dimensions such as social issue, stakeholders, government and product image. In addition to this, impacts of ethical choices of different stakeholders including employees, government authorities, investors and customers. Moreover, it includes qualities for ethical leadership like justice & honesty, respect others & humanity, encourage initiative and value driven decision making. 7
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REFERENCES Books and journals Crane,A.andMatten,D.,2016.Businessethics:Managingcorporatecitizenshipand sustainability in the age of globalization. Oxford University Press. Doh, J. P. and Quigley, N. R., 2014. Responsible leadership and stakeholder management: Influencepathwaysandorganizationaloutcomes.AcademyofManagement Perspectives.28(3). pp.255-274. Ferrero, I. and Sison, A. J. G., 2014. A quantitative analysis of authors, schools and themes in virtue ethics articles in business ethics and management journals (1980–2011).Business Ethics: A European Review.23(4). pp.375-400. Godemann, J. and et. al., 2014. United Nations supported principles for responsible management education: purpose, progress and prospects.Journal of Cleaner Production.62.pp.16- 23. Hoffman, W. M., Frederick, R. E. and Schwartz, M. S. Eds., 2014.Business ethics: Readings and cases in corporate morality. John Wiley & Sons. Jones Christensen, L., Mackey, A. and Whetten, D., 2014. Taking responsibility for corporate social responsibility: The role of leaders in creating, implementing, sustaining, or avoiding socially responsible firm behaviors.Academy of Management Perspectives. 28(2). pp.164-178. Kumar, B. N. and Steinmann, H. eds., 2015.Ethics in international management(Vol. 84). Walter de Gruyter GmbH & Co KG. Setó-Pamies, D. and Papaoikonomou, E., 2016. A multi-level perspective for the integration of ethics,corporatesocialresponsibilityandsustainability(ECSRS)inmanagement education.Journal of Business Ethics.136(3). pp.523-538. Weiss, J. W., 2014.Business ethics: A stakeholder and issues management approach. Berrett- Koehler Publishers. Wood, D. J. and et. al., 2015.Global Business Citizenship: A Transformative Framework for EthicsandSustainableCapitalism:ATransformativeFrameworkforEthicsand Sustainable Capitalism. Routledge. Online DeontologyandUtilitarianism.2017.[Online].Availablethrough: <https://iamelectricalengineer.wordpress.com/2017/01/13/what-is-the-difference- between-deontology-and-utilitarianism/> 8