Business Ethics and Responsible Management

This study material explores the importance of business ethics and responsible management. It discusses ethical issues faced by companies, the role of business in society, stakeholders, and provides examples of good and bad ethical practices. Recommendations for EA Games are also included.

Business Ethics and
Responsible
Management

Table of Contents
INTRODUCTION ..........................................................................................................................3
PART 1............................................................................................................................................3
PART A...........................................................................................................................................3
Ethical issues and its importance................................................................................................3
Ethical issues faced by the company...........................................................................................3
Role of business in society..........................................................................................................4
Five stakeholders.........................................................................................................................4
Example of good and bad ethical practice..................................................................................5
Recommendations.......................................................................................................................6
REFERENCES................................................................................................................................6
PART B............................................................................................................................................7
Discuss and apply two theories of ethics together with its advantages and disadvantages........7
Recommendations.......................................................................................................................8
REFERENCES................................................................................................................................9
PART 2............................................................................................................................................9
Reflective essay on Ethical Leadership management.................................................................9
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business ethics can be regarded as implementing the correct and appropriate practices
and policies in the business so that there is no argument on controversial subjects. It is basically a
study of these appropriate practices and policies regarding the controversial subjects which may
include bribery, corporate governance, fiduciary relationship or the corporate social
responsibility. Every organisation need to consider two aspects while making any decision which
includes business ethics and social responsibility. Responsible management can be said to be an
activity or process which must be designed in the business so that certain environmental and
social minimum standards are met by the companies (Braga and et. al., 2019). This report is a
case study of EA games: FIFA, Loot boxes and Whales, which is an American gaming company
in Europe and America. The report is been made by middle Manager which shall be submitted to
senior manager. The report shall be split in 2 parts, under which Part 1(A) shall cover the aspects
of ethical issues faced by company, role of government in business, impact on stakeholders of
the organisation, examples of bad and good ethics and at last the recommendations. Part 1(B)
shall cover the ethical theories and their application in the case, its advantages and disadvantages
and recommendations for the company. At last Part 2 shall have the reflective essay on what
makes an ethical leader and how managers can work towards meeting the high ethical standards.
PART 1
PART 1A
Ethical issues and its importance
Ethics are basically the morals which are to be followed by everyone in their daily lives
which shows the sense of society as to what is the right way for living the life. Business ethics
are important so that the company as well as its workforce work towards the right path so that its
practices and activities does not harm any individual and fair decisions are taken so that
objectives can be achieved efficiently (Heimo and et. al., 2018).
Ethical issues faced by the company
Under the given case study, EA games is a company operating in America dealing in
providing online games to the gamers for free and then afterwards directing them to purchase the
in-games and accruing revenue from the advertisement. The controversy arose from the loot box

where in game purchasers do not know the content given in the box. The ethical issues from the
point of view of parents of the in-game purchasers is that the loot boxes promises to provide
rewards but at the end they do not receive any reward and their money are getting wasted by
their children. From the scenario of this unethical practice, the UK Parliament took initiative to
examine as to whether these loot boxes need to be regulated (Lee, Kim and Kim, 2018). On the
other hand, the Vice President of EA games explained that it is an ethical practice where these
loot boxes are for fun purpose only.
Role of business in society
A business operates within the society with its sole purpose to generate revenue. These
revenues and profits can be earned when it satisfies the customer needs and wants. The
companies must prepared its code of ethics in order to make positive decision making in the
organisation so that its objectives are achieved without any roadblock. When a business operates
with unethical practices, it may result in consequences of legal action which may harm the
company's goodwill and affect the society as whole. In context to the given case study, from one
point of view, the loot boxes are a kind of gamble where users are wasting huge funds for
winning the games which is affecting the society. The company is not moving in right direction
in taking fair decisions which is creating a lot of problems for the parents of users. These loot
boxes are creating wrong impression on the minds of children where they lack knowledge on
whether the company is practising this for work purpose or personal benefit (Moon and Jung,
2018). On other hand, from the point of view of company, the business organisation must make
it clear to its user that they are creating these games and loot boxes for fun purpose only and
must provide the advantages and disadvantages of the same so that the company can ensure that
they are not working on any unethical terms which affect the society at large.
Five stakeholders
When a business operates in the society, it can get affected from the unethical practices.
In order to function fairly and positively within the society, the organisation must make it clear
that they do not conduct any unethical activity. The stakeholders are the key personnels of the
business who contribute to the business in achieving its goals and objectives. The unethical
practices of business impact the stakeholders and in context to EA games, the impact of its
unethical practice on its stakeholders is discussed below-

 Employees- They are the main asset of the company who work hard in achieving the
objects of the organisation. In case of any unethical activity being practised by the
company, they may face demotivation as their hard work is not satisfying the customers.
The employees of EA games will feel discouraged while working with company which
may result in loosing the valuable workforce by the organisation.
 Shareholders- They are the key investors who provide finance to the company. In case
the shareholders get any news of unethical practice, they don't want to invest in the
business as they risk their money might get lost. The share prices also tend to decline if
any shareholder withdraws or sells its shares. In this case scenario, the shareholders
might withdraw their investment as they do not want to face such consequences of
unethical activity committed by company.
 Customers- They are the key contributors in achieving the goals of the company are
customers. If they face any unethical conduct from the company, they tend to change
their preference and does not purchase from the company which may affect its business
(Richards and Dignum, 2019). In this case study, if the customers are of the view that
these games are for personal benefit of the company, they will not purchase it which will
result in loss for the company.
 Government- They contribute in establishing the business as they make such flexible
policies which may benefit the company if they perform ethical practices. The EA Games
might face problems from the government if they perform such unethical conduct. It may
result in strict laws or withdrawal of subsidiaries which may impact the business of the
company.
 Suppliers- These are the one who provide raw material or other goods to the company.
The EA Games may face problems from the unethical practice as it may loose its
suppliers who supply them soft wares or equipments for producing the goods. They may
tend to lose interest in the company as they don't want its business to get affected from
any controversy of unethical conduct of EA games.
Example of good and bad ethical practice.
There are many companies which perform their activities fairly and accurately and does
not come under the category of bad ethics. The example of organisation with good ethical
practice is Internation Business Machines (IBM) who has also been awarded as best Ethical

company in the world for 2 years in a row. Another example is Marks & Spencer, dealing in
retail of clothing is also the ethical company which provide its offering in fair manner.
The examples of companies with bad ethics include Amazon which is an online retailer
who has been rated as the unethical company on terms of environmental issues and supply chain
management. Another example of company with bad ethics is ASDA Walmart dealing in
supermarkets is also one of the company with bad ethics on terms of discrimination among staff,
workers abuse and many other (Ziewitz, 2019).
Recommendations
For the EA Games, in order to prevent further bad ethical conduct, following
recommendations shall help company in overcoming such consequences of bad ethical practice.
The recommendations include-
 The company must not introduce something which creates any issue to the people as it
can impact their business. The introduction of loot boxes and whales are misunderstood
by people which is creating problems for the company in its future dealings.
 The organisation must make its concept clear to the public by specifying new clause in
relation to loot boxes and whale where its pros and cons must be clearly updated.
 The loot boxes must be amended with ethical codes with the recommendation of game
players so that it can be re introduced in ethical manner.
 The company must bring new ethical codes into its organisation so that it can rebuild its
image in the market and can make improvement in its working.
REFERENCES
Books and Journals
Braga and et. al., 2019. An institutional approach to ethical Human Resource Management
practice: comparing Brazil, Colombia and the UK. Journal of Business Ethics, pp.1-20.
Heimo and et. al., 2018. Virtual to virtuous money: A virtue ethics perspective on video game
business logic. Journal of Business Ethics. 153(1). pp.95-103.
Lee, C.K., Kim, J.S. and Kim, J.S., 2018. Impact of a gaming company's CSR on residents'
perceived benefits, quality of life, and support. Tourism Management, 64. pp.281-290.
Moon, K.K. and Jung, C., 2018. Management representativeness, ethical leadership, and
employee job satisfaction in the US Federal Government. Public Personnel
Management, 47(3). pp.265-286.
Richards, D. and Dignum, V., 2019. Supporting and challenging learners through pedagogical
agents: Addressing ethical issues through designing for values. British Journal of
Educational Technology, 50(6). pp.2885-2901.

Ziewitz, M., 2019. Rethinking gaming: The ethical work of optimization in web search
engines. Social studies of science. 49(5). pp.707-731.
PART B
Discuss and apply two theories of ethics together with its advantages and disadvantages.
Business ethics refers to the code of conduct or practices which a company follows in
order to ensure fair dealings and decision-making. These ethics help the organisation to work
towards increasing its productivity in the workplace so that set objectives can be achieved
effectively (Cohen and Ahn, 2016). These govern the decisions and action of the firm. In context
to the given case scenario of EA Games, the following ethics theory can help the company in
overcoming its unethical practices which are discussed below-
UTLITARIANISM
This theory was founded by Jeremy Bentham and John Mill whose basic principle was
greatest happiness. According to John Mill, the basic principle behind this theory is that an
action can be right if it promotes happiness and it can be wrong if it produces sadness or a
reverse of happiness. A company can work towards making the society happy from its action and
if it promotes sadness, it is not a right action. Jeremy Benetham's basic principle of Greatest
Happiness provides that the nature have placed the mankind under the two sovereign masters
which are pleasure and pain. This theory focuses on firstly the results and consequences from the
action and disregards other things like motive or reason for committing the action. Secondly, it
emphasises on neutral decision making by the agents. It states that a decision must be taken by
counting all people as single whether they relate as family, friend or stranger. Its basic principle
is the 'greatest amount of good to the greatest number of people'. It works towards betterment of
society (Baron, 2017).
In context to the case of EA Games, the company can apply this theory and can work
towards making such new games or changing the existing game which can provide happiness or
benefit to both users and their parents. Likewise, the company can fix the number of hours for its
playing or can provide a feature of parental control where parents can monitor the playing of
their children. Further changes must be made in loot boxes so that children does not use their
parent's money into something wrong.

The advantage of this theory is that it is an universal concept which can be applied in any
situation or culture. Another advantage includes that it follows principles of democracy which
states that if the outcome of majority people gives happiness, it is a right decision and vice versa.
The major disadvantage of this theory is that it focuses on result and not the action. It mainly
deals in actions which give happiness to other but does not bother about the people in whose
perspective that action may be wrong (Tengi̇li̇moglu and Hassan, 2020). Another disadvantage is
that it does not measure the happiness in tangible form as there is no definite measurement for
measuring the happiness.
DEONTOLOGY
This theory was founded by Immanuel Kant which provides a person must follow its
duties to another society or individual because when any person upholds the duty of other, it is
considered as ethically correct. It focuses on motive rather than on actions to act for the good of
other people. According to Kant, doing right things matter the most irrespective of its result
which may cause harm to other
In context to the case study of EA Games, this theory has its application in context that
the company must engage itself in such activities which respect the dignity of others. Likewise it
must eliminate the concept of loot box so that the users don't invest the money in such activities
which are not worth for them and even if they keep loot boxes, it must be work on providing
something good to the people so that their parents don't consider it unethical.
The advantage to this theory is that it creates personal responsibility on the person that
the action must be such which brings harmony in decisions (Gouri Suresh and Studtmann,
2019). It has a universal application. The disadvantage of this theory is that it does not give
rationale basis for deciding the duty of an individual or there may be conflict in duties for a
person.
Recommendations
The EA Games company must apply these theories in their controversy in order to
eliminate the unethical practice. For instance, the company can apply deontology theory in such
a way that it can amend the features of loot box so that dignity is maintained of the people whose
children are wasting money on these irrationally. For the application of utilitarianism theory, it is
recommended to the company that it can bring such games or new features in existing games that

can be ethically correct (Rosas, 2017). For instance, it can bring parental control feature in games
so that parents can monitor and control their child's gaming.
REFERENCES
Books And Journals
Baron, J., 2017. Utilitarian vs. deontological reasoning: method, results, and theory. In Moral
inferences (pp. 145-160). Psychology Press.
Cohen, D.J. and Ahn, M., 2016. A subjective utilitarian theory of moral judgment. Journal of
Experimental Psychology: General. 145(10). p.1359.
Gouri Suresh, S. and Studtmann, P., 2019. Endogenous Game Theoretic Deontology (No. 19-
03). Davidson College, Department of Economics.
Rosas, A., 2017. On the cognitive (neuro) science of moral cognition: Utilitarianism, deontology,
and the “fragmentation of value”. In Neuroscience and Social Science (pp. 199-215).
Springer, Cham.
Tengi̇li̇moglu, E. and Hassan, A., 2020. Applying Flow Theory to the Online Booking
Experience: The Role of Utilitarian and Hedonic Features. Journal of
Tourismology. 6(1). pp.1-12.
PART 2
Reflective essay on Ethical Leadership management.
Ethical leadership refers to the concept which demonstrates the conduct of leaders
through good values from their action or words. It is regarded as acting according to the moral
principles in the daily operations of the business and in decision making. Ethical leadership
management is creating the culture in the workplace where people can do right things. An ethical
leader is the one who defines and aligns such values that can build a culture of ethical working.
An ethical organisational culture is built from the effective communication of ethical values and
ensuring that the people have sustained that value in their behaviour while working in the
organisation (Shareef and Atan, 2019). An ethical leader is the one who align the ethics into the
company and hire people with same values so that ethics can be communicated by all to
everyone working for an organisation. An ethical leader does not bring biasness into his decision
making and leads the workforce by an examples.
An ethical leader may maintain integrity and compliance in the workplace by ensuring
that rules and regulations are strictly followed by the staff so that it can reflect in the efficiency
of their performance. There must be a team spirit in all employees so that their personal motives
are kept aside and all can work towards common objectives of the company. The leader can

motivate the employees so that they can work with enthusiasm and ethics which can set an
example for other. In order to bring effectiveness and efficiency in the performance of the
workforce, the leader can encourage and motivate them to comply with code of conducts so that
all can work together as a team (Lumpkin and Achen, 2018). Effective communication
mechanism must be developed in the business organisation so that integrity and compliance can
be ensured by the leader.
In order to become an ethical leader, my experience have taught me to construe myself
into an ethical leader. Before construing teams, I differentiate people according to their
efficiency so that effective teams are built in organisation. While leading my team, I maintain the
team spirit among team members where I encouraged more and more discussions so that
effective communication channel can be built among the team. While solving any issues between
the members, I respect the opinion of my team members and try to work with their perspective as
well so that their dignity is not hurt. This boosted the confidence of my team and I was able to
trust my capabilities which helped me in taking the right decisions. Following the ethical code of
conduct of my business organisation helped me in taking positive decisions for my team as well
as company. Before coming to any conclusion, I use to evaluate my decision and its
consequences so that I can better make decisions without worry and stress. So my ethical
behaviour helped me taking fair decisions without any discrimination which resulted in increased
productivity of my team members.
CONCLUSION
From this part, it is concluded that an ethical leader brings the ethical environment into
the organisation where work is done with ethics. The organisation must encourage strict
compliance of morals and ethics so that the business is run ethically which will help in
eliminating the unnecessary problems. An ethical leader is the one which defines and aligns the
values and work on building effective communication so that ethics and values are
communicated to all (Yang and Wei, 2017). Hence, it is a duty of a leader to ensure the integrity
and compliance in the workplace so that productivity is increased of the employees and business
can get into the heights of success.

CONCLUSION
From the above report, it is concluded that ethical management is an essential part of the
business where the management must ensure that its activities and practices are complied to the
ethics. The EA Games company have unethically organised such games and loot box for the
users which have impacted the parents of children who have wasted their money in purchasing
such loot box. This unethical conduct have impacted the stakeholders of the company and has
degraded the image and reputation of the organisation. The two ethical theories, utilitarianism
and deontology will help the company in overcoming this unethical practise. Futher it is
concluded that an ethical leader can build a foundation of ethics where fair dealings and decision
making shall be encouraged which will help in increasing the morale of employees to take the
company to new success.

REFERENCES
Books and Journals
Lumpkin, A. and Achen, R.M., 2018. Explicating the synergies of self‐determination theory,
ethical leadership, servant leadership, and emotional intelligence. Journal of Leadership
Studies. 12(1). pp.6-20.
Shareef, R.A. and Atan, T., 2019. The influence of ethical leadership on academic employees’
organizational citizenship behavior and turnover intention. Management Decision.
Yang, Q. and Wei, H., 2017. Ethical leadership and employee task performance: Examining
moderated mediation process. Management Decision.