Business Ethics and Responsible Management

This study material explores the concept of business ethics and responsible management. It discusses the ethical dimensions and their impact on stakeholders, as well as the role of leaders and managers in building an ethical organization. The case study of Ladbrokes is used to illustrate these concepts.

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
Ethics is known as values, norms and belief that help in governing the behaviour of
individuals. In society, this will depend over culture and existing conditions. There is huge
impact of this part over the functioning of an organisation. Here, it is known as business ethics
that guide towards the using of fair means for operating business functions. Ethics works as the
standard within an organisation where all employees have to adhere in performance of their
individual functions. This will help to develop the culture of uniformity in policies. Acceptance
of same within an organisation help to deliver morally correct outputs that does not have any
kind of harm over society individuals or environment. The concept of ethics has wide scope. The
aspects which are simultaneously recognised as unethical in nature includes insider trading,
discrimination and non-fulfilment of social responsibility. The presence of ethics is visible in an
organisation where management is effective (Ahn and Park, 2018). The effectiveness of
management is ascertained from their capability of fulfilling responsibilities. They have the duty
regarding adherence and compliance of all necessary industry policies, legislations,
organisational standards etc. The case study presented in the report is of Ladbrokes.
The report has two different parts. The aspects covering in part one includes role of an
organisation toward society, impact of ethical dimensions over stakeholders, impact ascertained
by an organisation due to acceptance of good and bad ethical choices and application appropriate
theories for understanding the concept. The second part depicts about the concept of effective
leader and manager along with contribution towards building an organisation ethical.
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
headquartered 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 winning 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 lose big amounts and lost their
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everything. This becomes the reason that government took the step of limiting the amount of
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 consumer’s 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 targeting 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 targeting 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
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but here, focus is provided over vulnerable and addicts that can be easily attract towards online
gaming activities.
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 (Frynas and Yamahaki, 2016).
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;
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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 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 that must to apply the ethical practices within an organisation
irrespective to the any nature. The working should be designed in the manner that only has
positive results will be delivered towards all associated stakeholders along with its moral
correctness in nature. The organisations must work in direction of removing unemployment,
providing quality products and building positive working environment. This help the
organisations to create separate image against to the competitors exist in market.
(b). Application of two different ethical theories in determination of the views over the concept
of ethics in relation to the selected case study
Ethics or good way of thinking is a branch of theory that includes systematizing, shielding,
and prescribing ideas of good and bad conduct. The field of morals, alongside style, concerns
matters of significant worth, and subsequently contains the part of reasoning called axiology.
Ethics tries to determine inquiries of human thoughtful quality by describing ideas, for
example, great and malicious, good and bad, righteousness and bad habit, equity and misconduct.
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As a field of scholarly request, moral way of thinking likewise is identified with the fields of
good brain research, graphic morals, and worth hypothesis.
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
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. There are
many other drawbacks associated with the acceptance of this idea of ethics that the people who
are genuine in nature and wants to get right in life is unable to get the same. This is so because
the idea of theory is not based upon the aspect of morally correct performance, totally focus is
provided over the number of persons who get benefit. This clearly depicts that this theory works
in the favour of an organisation where they adopt the practices on the name of ethics which are
work in the favour of an organisation and provides the opportunity to fulfil their personal targets
instead of focusing over the benefits of society and doing the activities that are morally correct in
nature.
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 targeting 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). The drawbacks
present in this theory are least in number. These are also perceived by the organisations because
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its impacts the ability to earn more profits through the use of unethical behaviour. This is the
theory where idea of accepting any activity is based upon the point of its morally correct in
nature. The drawback from the perspective that it proves against to the objectives framed by an
organisation. Also, they unable to meet the needs of the most stakeholders who have interest
within the organisation on the basis of attaining higher return. But, this will help the organisation
to build positive image in market where they able to attain long term growth and sustainability in
market.
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 are different from manager on the basis of functioning and role they played within
an organisation. Manager has the main role regarding the continuation of business functions
through allocation of duties. Whereas, leader has the main role of guidance to employees for
completion of the assigned duties within given period of time. The difference between both is
also exist on the basis of the characteristics and qualities they possess. The role of a leader is
concerned more important as compared to manager while seeing upon the development of
employee’s performance. They always try to adopt the measures that motivate the employees and
build positive working environment. It is the duty over both manager and leader to adopt ethical
practices while deploying their functions within an organisation. This will provide the
opportunity in completion of work without any discrimination and biases. The principle of ethics
work in positive direction because it contains the determinants like values, norms and belief that
are needed to adhere commonly by all within an organisation. Also, these will help in
performance of the only activities which are morally correct in nature and beneficial towards
society and environment. The main purpose behind the application of this concept is about
creating equal working conditions for all irrespective to any difference. In my opinion, the
concept of leader is wide on terms of functioning and accomplishing organisational objectives. In
this regard, it is must for a leader to possess different qualities that direct towards the direction of
becoming an ethical leader. These qualities include respect towards all, giving equal chances,
polite in nature, praise their work and ascertaining their view points. At some point, the
integrated effect of these help to become an ethical leader who makes morally right decisions
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from the sake of employees and other associated stakeholders. The direct impact of these
qualities will be visible on the performance of employees (Kourula, Pisani and Kolk, 2017).
They are more passionate towards their work and feel valuable asset for an organisation. This
improves their engagement towards work and help organisation to get rid of the issues like
employee retention. This nature of development clearly depicts the fulfilment of all ethical
determinants like socially responsible, corporate governed, reliable, fair, anti-discriminative etc.
As per my opinion, leader and manager has direct relation within an organisation. No one
is able to attain their targets without the support of each other. The unethical behaviour of any
party impacts the ability of another party in functioning of appropriate functions through
adoption of ethical measures. The interrelated functioning in between both will be understood
from the example provided below:
If manager distributes the role unethically then in this condition ethical leader is not able to
direct the person who get the role and not even motivates the other who no get opportunity
according to possessed qualities. On the other hand, if manager is ethical and distributes the role
properly but if leader is unethical then possible to direct the correct person in right manner and
provides the support to those who against to the authorised functioning.
The organisation will turn to be ethical when all the personnel perform work through
adherence of determined standards, values and norms. This will provide the opportunity to an
organisation regarding accomplishment of their objectives in ethically correct manner. The main
authority lies on the hand of manager. This depicts the ethical nature of manager is must within
an organisation. This automatically motivates the other employees of an organisation to adopt the
norms in performance of work which are morally correct in nature. The end result of same is
ascertained in the form of building ethical organisation who is able to stand sustainably in market
and society (McLeod, Payne and Evert, 2016).
It is understanding by me that role of my own personal ethic determinants is high within
development of positive working environment within an organisation. The determinant of ethics
present in me includes able to listen other views, focus on following standards and providence of
equal opportunity to all. The positive impact of same will be assessed within an organisation in
form of friendly working environment where everyone has trust on each other and provide
support in completion of individual and overall targets. I also seen that the influence of my
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ethical determinants is not limited towards to me. All others are feel motivated and try to follow
the same path.
I think the points that create unethical practices and policies within an organisation will
be ignorance of someone views, negative attitude of leader and manager, not focusing over
following standards, values & norms and negative relation between leader and manager. This
will be understood from the example like if manager or leader is not going to hear the views of
employees and ignore their demands then, it automatically creates negative perception against to
the organisation where they use unethical practices for completing work (Setó‐Pamies, 2015).
It is an obligation over the organisations to adopt the practices that help them to perform
ethically within the market. The contribution of practices will be ascertained in the form of
creating positive culture which includes the existence of determinants like fulfilling social
responsibility, equal treatment with all and compliance of corporate governance norms.
Acceptance of such common principles have the positive contribution in the direction of creating
equality. This will motivate them through considering themselves as important part of an
organisation irrespective to their authority and role. The positive culture and high level of
motivation has contribution towards long term growth of an organisation. The leadership style
which will be best to develop ethical culture within an organisation is democratic. This the style
where each and every one has the right to share their views and application of own ideas in
performance of work within an organisation (Waddock and Bodwell, 2017). Here, this will help
in providence of equal importance and power to all members of an organisation. This style of
leadership has end last positive contribution towards an organisation where they can easily
accomplish organisational objectives. This clearly depicts that the role of all aspects defined
above has equal importance towards creating ethical organisation.
CONCLUSION
It has been concluded from the above report that acceptance of ethics is important from the
point of positive changes and attaining long term sustainability within an organisation. In
organisations, this concept is known as business ethics that help to bring equality at environment
that improve the performance capability of all employees. The role of manager and leader is
optimum in the direction of building ethical organisation. The support of both is must needed for
creating good organisation that can fulfil social responsibilities and demands of society
individuals. There are large number of benefits will be gathered through adherence of ethics
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principle includes good team, positive working environment, high level of employee motivation
and low staff retention rate. The style which is most important for creating the environment of
ethics is democratic. This will provide the opportunity to all staff members in sharing of their
own ideas and complete the organisational goals in efficient manner.
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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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