Business Ethics and Responsible Management

This study material discusses the importance of business ethics and responsible management. It covers the nature of ethical issues, the role of business in society, and recommendations for ethical practices. It also explores the application of utilitarian and deontological ethics. Subject: Business Ethics, Course Code: N/A, Course Name: N/A, College/University: N/A

Business Ethics and
Responsible Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
A) Writing the report.......................................................................................................................1
Nature of ethical issue and role of business in society................................................................1
Identification of key Stakeholders and the way they are been impacted and example of how
ethical choices dis/benefited other businesses............................................................................5
Recommendations for the company emerging from analysis.....................................................7
B) Application of two ethical theories.............................................................................................7
PART 2............................................................................................................................................8
Qualities recognised for ethical leadership and for creating ethical organisation.......................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Business ethics and having responsible management can help the businesses to have an
effective reputation in market and also helps to bring business profitability(Crane and et.al.,
2019). Present study is based on the firm TUI UK Ltd, that is a travel agency in UK and offers
family trips, business tours, picnics etc. Report will include Nature of ethical issues and also the
role of business in the society. Report will further identify different stakeholders and the way
they are been impacted by the business activities. Report will also include recommendations for
TUI for having an effective ethical practices. Report will also include application of two ethical
theories and finally will analyse ethical leadership practices and its benefits to the business.
PART 1
A) Writing the report
Nature of ethical issue and role of business in society
Gender pay gap as an ethical issue:-
Gender pay gap is basically the gap between the male and female earnings and it
generally effects the lifetime earnings and pensions of all the working women. This also leads to
poverty and impact the economy of the nation. TUI UK limited is working effectively in order to
overcome the gender pay gap as it not only creates ethical issues for the business but also creates
social issues for the business(Azmat and Ferrer, 2017). Office for national statistics(ONS)
collects the data on earnings in the UK in order to collect gender pay differences. There are 78%
of the companies in UK that are in favour of men with respect to the wages that they distribute
between women and men. According to ONS it is been analysed that the average pay gap for the
UK in last year is about 18.4%. It is undoubtedly seen that the Equal pay act of UK is somehow
flouted and for many businesses of UK it is an ethical issue(Gender pay gap a symptom of deep
prejudice, 2019). Women also contributes effectively for the business success and if an
organisation is doing discrimination on bases of the pay that they get, it results in different
ethical issues for them. On bases of the equal pay act 1970, if an organisation is conducting less
favourable treatment between men and women with respect to the pay and working conditions
provided to them, strict actions can be taken by the government on that business. As it is the right
of people working in an organisation to get equal pay for their equal work.
Figure:- 1
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From the above data, it is been analysed that Men are getting more median hourly pay
than compared with the women that are working in organisations of UK. It creates an ethical
issue for these businesses and also impacts the morale of the organisations. It also results is high
turnover rate of the talented employees and impacts the economy of the nation as it leads to
poverty.
Reasons Company have to look at this issue from an ethical perspective of ethics:-
Businesses are required to look at the issue of equal pay gap from a ethical perspective as
it creates the morale of the organisation and government of UK have set different laws in order
to protect the rights of the working women. Not following the laws, may leads to different ethical
issues and strict actions from the government side that may be inform of penalties. As the
women are playing an active role for the UK's economy, politics and also public life, businesses
are required to work effectively and have to adopt equal pay policy in their organisation(Lawton
and Páez, 2015). This ethical perspective also helps TUI UK limited to retain the women
employees for long period and also makes an effective image of the organisation in front of the
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Illustration 1: Gender pay gap

working employees and also to the society. This also results in economic boost and reduce the
poverty, that helps the business in getting support from the government ethically and also
financially.
The way ethical issue influence public image of the company:-
If the companies are working effectively on gender pay gaps, it helps the business to have
an effective image in market. TUI UK limited works effectively to empower the women and also
to achieve the gender equality and this helps the business to have sustainable development.
Nowadays, customers prefer to have products and services of those businesses that are working
of sustainability of their business activities(Johnson, 2017). TUI UK limited have started
promoting equality at the workplace as it helps the business to have active participation of the
women and that reflects an effective image of the business in eyes of the public. They gain an
image as socially responsible business and also helps the business to have greater efficiency and
personnel performance. The percentage of committed employees also get raised and that also
helps the business to improve hiring that finally leads to business profitability and an effective
public image of the company.
Figure:- 2
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Illustration 2: Pay Quartiles TUI UK Ltd.

TUI UK Ltd. is putting its efforts in order to reduce the gender pay gap and as a result it
is been analysed from the above graph that the upper class male are getting more pay than
compared with female. However, the upper middle, lower middle and also the lower class
females are getting more pay than compared with the males. This clearly indicates that the
business is somehow paying attention towards the women empowerment(TUI Gender pay gap
report, 2019).
Figure:- 3
It is also been analysed that TUI UK Ltd. is somehow lacking behind to provide equal
pay as the bonus payment structure indicates that the women are getting less bonus than
compared with the working men. Business is required to work effectively in order to minimise
this gap, otherwise it will directly impact the public image of the business.
Alternative ways to think about a business' role in society:-
Business is not only meant for the profit making purpose but it also plays a key role for
the society as it helps in economic, social and political growth of the country in which they
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Illustration 3: Bonus metrics of TUI UK Ltd

operate. There are many businesses that creates value for UK's economy and helps in growth of
the society(Hsieh, 2017). Role of the business is to maximize the value of the shareholders'
wealth and have concentration on the economic activities. Another alternative role that business
creates nowadays is to engage the environmental and social causes with different multiple
stakeholders mind and also to work effectively for economic growth of the business. Businesses
are getting engaged to environmental and social goals and that also refines the relation that
business is having with the society.
Identification of key Stakeholders and the way they are been impacted and example of how
ethical choices dis/benefited other businesses
There are different stakeholders that have trust on TUI and company works effectively in
order to increase the wealth of these stakeholders in order to build their trust on the business. The
different stakeholders are as following:-
Figure:- 4
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Illustration 4: Shareholder structure

 Unifirm limited:- As Alexey Mordashov has transferred about 65% of his stake in
Unifirm and as a result it holds 24.99% of TUI AG shares and is the long term
shareholder of TUI. This was done by Unifirm limited in order to have asset management
experience for its business(Shareholder structure, 2019). RIU:- RIU hotels and resorts is having 1,100,000 shares in TUI AG that is about 3.6%.
They are having business relation since 2004 and as a leading travel agency, company
have gained trust of its shareholder(Shareholder structure, 2019). Private investors:- There are different private investors that are having share of about
13.7%. There is a Hamburg based private investment firm GENUI that also invest for the
business of TUI and that have helped the TUI to sharpen their tour operator business and
also as a vertical integrated tourism group of UK(Private investors, 2019).
 Institutional investors:- There are two different institutional investors that are having
57.8% of share. These investors are Quadrant capital group LLC and Parametric portfolio
associates LLC(Institutional investors, 2019)
There are different financial decisions, operational decisions and also ethical decisions of
TUI that impacts the business. It is very important for TUI to work on its ethical decisions in
order to gain the trust of the business. As government have set norms for having equal pay to all
the working staff irrespective of the gender based difference, TUI have to work effectively in
order to develop the trusting relationship of company with that of its stakeholders. With the
ethical standard of the business, TUI is able to seek larger profits and also higher visibility. If
business is not obeying the regulations, it may damage the shareholders trust over the
business(Witt and Stahl, 2016).
Having good ethical decisions, helps the business to generate and also sustain the trust of
the shareholders. It generally indicates that the responsibility, respect and also fairness that firm
is having for its shareholders and also stakeholders. Ethical decisions are the foundation of better
decision making and helps the business to gain trust of its stakeholders. However, the unethical
behaviour such as having pay gaps between the working women and men may create
consequences for TUI as the business can lose potential staff and also shareholders. It also
impacts the reputation of TUI and if government takes strict actions than it may result to
financial loss of the business.
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Recommendations for the company emerging from analysis
TUI is required to identify its company's pay gap and have to review the salary of all its
employees in order to segment the salaries on bases of the salary and not on the bases of gender.
Business is also required to review the balance of men and women at different management
levels of the company and have to work effectively in order to maintain the balance as it is been
analysed that the senior positions are not balancing in any way. Lack of gender based diversity
may create ethical issues for the business and the shareholders may not have trust on TUI for
long period.
B) Application of two ethical theories
There are different ethical theories that business can adopt in order to work in an
effective manner. The two ethical theories that TUI can adopt are as Utilitarian and
Deontological ethics:-
Utilitarian Ethics:- This theory generally promotes different actions that business can adopt in
order to maximise the well being and also happiness of the working population of the
organisation. It determines the right and wrong as it is having its focus on the respective
outcomes. It defines the morality of actions that business is required to take in order to make the
working employees as well as the stakeholders happy. TUI have to adopt this ethical practice as
this approach provides moral reasoning to its business and also accounts for the costs and
benefits for the organisation(Playford, Roberts and Playford, 2015). However, it is tough for the
business to predicts the future results and it is tough to analyse whether the actions will be good
or bad for the business. The decision that organisation have to made, must be based on the
benefits that majority of people have as it helps in developing the trust of people that are having
relationship with TUI. While applying the theory business is also required to think about the
minority, as just befitting the majority may become unethical for TUI. It is therefore important
for TUI UK Ltd, to work for the minorities also that is benefiting the working women who are
getting less wages for their work and providing them equal opportunity to grow. This theory is
also known as consequentialism as it is all based on the consequences that decision may have on
the business.
Deontological Ethics:- It is a normative ethical theory that indicates that the actions of the
business have to be based on the fact that the taken actions are right or wrong on bases of the
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different rules and not on the consequences of actions that business will take. It is very important
for TUI to respect the dignity of its employees and also to respect their work. It is important for
the business to identify their duty and act accordingly. It helps the business to have strong public
relations ethics and all the stakeholders and shareholders can trust on the business. However,
applying this model is having different consequences like there may be disagreement about the
principle that company have used in order to make decision for the organisation and the right
actions sometime may leads to bad consequences that impacts the business image in eyes of
working people(Paquette, Sommerfeldt and Kent, 2015). Business is able to creates a foundation
for human conduct in the working culture and helps the working women of TUI, to get equal pay
and treatment that men are getting. It also creates personal responsibility of the working staff and
makes the organisation responsible to create expectations and legislations with respect to the
expectation of the society. It also emphasizes the value of every person that is working in TUI,
irrespective of men and women. It also creates moral absolutes that is the individuals working in
the organisation are aspired to be morally perfect and have understanding that society is having
expectations from different ethical standpoints that business is required to follow.
From the above two ethical theories it is been analysed that if the organisation works
ethically they are able to gain the trust of all its working employees. It is very important for the
business to never discriminate the minors on bases of their gender. Business is required to work
on the gender based diversity and have to balance the ratio in order to have sustainability of its
business. Having sustainable business helps the organisation to build an effective image in eyes
of the customers as well as the shareholders. Not only this, it also helps the business to develop
morale of the working staff and leads to women empowerment.
PART 2
Qualities recognised for ethical leadership and for creating ethical organisation
What makes an ethical leader:-
An ethical leader is one who is always fare in its decision making and treat every working
individual in the firm equally. Under the leadership of an ethical leader, employees are never
treated unequally on bases of their gender, ethnicity, nationality etc. They always respect their
team and members by listening to them actively and they are always ready to contribute for the
success of the business. It is very important to be honest to the respective duties in order to be an
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ethical leader. They always have their focus on the team building and to achieve the
organisational goals. They also have value driven decision making and encourage the working
individuals to come up with innovative ideas so that business decision can be enhanced or
improved. They never tolerate ethical violation and are always ready to take strict actions if one
violet the laws(Lawton and Macaulay, 2015).
The way ethical manager, manage business and others to a high ethical standard:-
As an ethical manager of TUI UK Ltd, the decision made by me are fare enough and as a
manager I have different key traits that are integrity, honestly and trustworthiness that helps me
in making my employees work more effective. I also communicate to my employees about the
ethical expectations that the business is having from them. In order to make them work more
effectively, I also conduct different training sessions for them so that they can have a clear
understanding about the way different business practices are required to be conducted ethically
so that business is having sustainability and visibility in market. I work to reward the employees
for their ethical acts and also punish the employees that are not following the business practices
in an ethical manner. This reinforcement helps me to make the employees work in right direction
and make them motivated to work in an effective manner in order to have an effective image of
the business in market(Trevino and Nelson, 2016). I always encourage my working employees to
raise issues that they are facing and they also act as a whistle-blower in order to make sure that
ethical practices are going in the business or not. Employees are always ready to take the issue in
front of the senior manager so that they can take appropriate decision for solving the misconduct
and to overcome the negative impact that they cause to the business activities. As a manager of
TUI, it is my responsibility to implement customer value strategy by building focus of the
customers with the help of valued services. I also work to enforce effective policies in order to
make the employees work in right direction and I also praise the employees so that they continue
to be in the right direction by serving them positive reinforcement.
CONCLUSION
From the above study it is been analysed that gender pay gap is an ethical issue that many
of the organisations are facing and need to work effectively in order to overcome the impact of
the business profitability and also on reputation of the business in market. Having ethical
standard of the business helps in having an effective public image and it leads to business
profitability. Business ethics also helps in economic, social and political growth of the country
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and helps the business to get engage in the environmental and social causes so that they can
develop an effective image in front of the shareholders. There are different shareholders that TUI
is having and these ethical business activities are having a great impact on them. Report also
concluded that TUI is required to implement two ethical laws that are Deontological Ethics and
Utilitarian Ethics in order to have an effective standard of the business.
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REFERENCES
Books and Journals
Azmat, G. and Ferrer, R., 2017. Gender gaps in performance: Evidence from young lawyers.
Journal of Political Economy. 125(5). pp.1306-1355.
Crane, A. and et.al., 2019. Business ethics: Managing corporate citizenship and sustainability in
the age of globalization. Oxford University Press.
Hsieh, N.H., 2017. The Responsibilities and Role of Business in Relation to Society: Back to
Basics?. Business Ethics Quarterly. 27(2). pp.293-314.
Johnson, C.E., 2017. Meeting the ethical challenges of leadership: Casting light or shadow. Sage
Publications.
Lawton, A. and Macaulay, M., 2015. Ethics management and ethical management. In Ethics and
integrity in public administration: Concepts and cases (pp. 119-132). Routledge.
Lawton, A. and Páez, I., 2015. Developing a framework for ethical leadership. Journal of
Business Ethics. 130(3). pp.639-649.
Paquette, M., Sommerfeldt, E.J. and Kent, M.L., 2015. Do the ends justify the means? Dialogue,
development communication, and deontological ethics. Public Relations Review. 41(1).
pp.30-39.
Playford, R.C., Roberts, T. and Playford, E.D., 2015. Deontological and utilitarian ethics: a brief
introduction in the context of disorders of consciousness. Disability and rehabilitation.
37(21). pp.2006-2011.
Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how to do
it right. John Wiley & Sons.
Witt, M.A. and Stahl, G.K., 2016. Foundations of responsible leadership: Asian versus Western
executive responsibility orientations toward key stakeholders. Journal of Business Ethics.
136(3). pp.623-638.
Online
Gender pay gap. 2019. [Online]. Available. Through<https://www.google.com/search?
q=Office+for+National+Statistics+(ONS)
+data+on+equal+pay+gap+2019&source=lnms&tbm=isch&sa=X&ved=2ahUKEwjDkoeJ
saDmAhXYIbcAHedhDV8Q_AUoAnoECA0QBA&biw=1541&bih=810#imgrc=N9TpiU
vucfnlSM:>
Gender pay gap a symptom of deep prejudice. 2019. [Online]. Available.
Through<https://www.theguardian.com/commentisfree/2018/apr/04/the-guardian-view-on-
the-gender-pay-gap-a-symptom-of-deep-prejudice>
TUI Gender pay gap report. 2019. [Online]. Available.
Through<https://www.tuigroup.com/damfiles/default/tuigroup-15/en/about-us/our-
business/TUI-UK-Gender-Pay-Gap-Report-2018-19.pdf-
0ff4fb0057697f8ac76204e1c79e492e.pdf>
Shareholder structure. 2019. [Online]. Available.
Through<https://www.tuigroup.com/en-en/investors/share/shareholder-structure>
Institutional investors. 2019. [Online]. Available. Through<https://fintel.io/so/us/tuify>
Private investors. 2019. [Online]. Available.
Through<https://www.tuigroup.com/en-en/investors/news/2019/ir-news/20190812>
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