Business Ethics and Social Responsibility

This article discusses the concept of business ethics and social responsibility and its importance in maintaining a sustainable business. It includes a case study on Bio-Organic's unethical practices in the composting industry.

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BUSINESS ETHICS AND SOCIAL RESPONSIBILITY
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Business to sustain in the market needs maintain ethical approach of business. Business
ethics are crucial for any business to grow as it concerns people’s moral judgments in regard to
right and wrong. An organization can take decisions by the decision of an individual or a group
(Spence 2016). However, people making the decision may become influenced by the culture of
the business. It is a decision of morality that pushes an organization to work with ethics. The
paper aims to discuss the company Bio-Organic’s unethical practice that was highlighted in the
article written by Hannah Barry. The article is focused on the claims on Bio-Organics as an
unethical business.
The case:
The company was considered a ‘rough operator’ in the composting industry after the
residents of that area began to complain of a putrid smell coming from the facility in 2013. There
were several concerns and questions that were raised in regard to the company’s operating
license and the reasons the company was allowed to work in such a way. Questions were raised
for letting the company accept things such as grease trap liquid, food processing and blood waste
and food processing waste when the company was technically a green waste facility. However,
later it was also found that the company was only vindicated in number of court cases even
though it was it had been operating under the terms of its licenses. It is certainly thought
provoking that even though the company has come out true, there should be reasons that would
justify the reasons for these many allegations and cases on the company (Barry 2019).
The ethical issue:
Businesses are expected to comply entirely with environmental laws, fiscal and monitory
reporting statues, federal and state safety regulations and all applicable civil rights laws

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(Fernando and Lawrence 2014). It is important a company comply with the government’s rules
and regulation along with maintaining peace with the community they work. Often goes
unnoticed however, social responsibility is an ethical theory in which individuals and the
members of an organization are required to fulfill their civic duty. The actions of an organization
must act in a way that would benefit the society they live and operate. Through this way, a
balance should be maintained between the economic growth and the welfare of society as well as
the environment. Social responsibility is accomplished when this equilibrium is maintained
(Carroll and Buchholtz 2014).
According to the theory of social responsibility, a system of ethics should be followed
when the decisions and actions are taken (Wood et al. 2015). They are required to be ethically
validated before proceeding their work. It is here, the Bio-Organic went wrong. If by anyways
their actions or decision impact negatively to the society or environment, it would be considered
as a socially irresponsible behavior. The Bio-organic company violated this unsaid rule of
abiding by the society and environment. Even though they were working as a waste management
organization, the foul smell began spreading in the surrounding of the company. Controlled
waste products have the potential to ultimately cause harm to human health as well as
environment if they are released to the environment without treatment. Therefore, when the
released gases began spreading the community began to doubt the company. In this specific
situation the company needed to have social responsibility. Ethics and social responsibility
applies in both individual and group capacities. Both needed to be incorporated in the
organization’s daily action, decisions specifically that were associated with having an impact on
the other persons or the environment. in this case where the larger picture is concerned, a code of
social responsibility and ethics is applied within said group while they were having interactions

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with other individuals or groups. since it was not taken under consideration, it impacted on the
company’s credibility. The lack of business ethics became public knowledge which resulted as
credibility loss in Bio-Organic’s credibility. Even though it recovered from the news of lack of
ethics, it lost the company image and reputation. Customers and people around them abandoned
the company since they are dismayed by poor ethical practices (Heath 2014).
Own decision making process in relation to the ethical issue reflecting the ways individual
ethical judgments are made and the way it may vary:
To have a scandal-free year should be the top most concern for the leaders of the
organizations. Consumers interact with businesses that have successful reputation and any
business with a bad image is commonly abandoned by not only by consumers but also by other
businesses that tend to make partnership. It is the daily activities and decision making that makes
the businesses ethics strong. The decisions and actions must be ethically validated before
proceeding and implementing them. Therefore, it is essential to seek the permission of the
responsible community, authorities and the concerned bodies a decision is taken out. Moral
values play important role in society and it is often one of the most sensitive aspects of a society
for there are certain morale values that are inherent in society. On the basis of these moral
values, a society makes distinction between right and wrong. Through this process social fairness
is believed to be in the ‘right’. Every business is required to have a responsibility to act in a way
that would be beneficial to society as well rather than its own profit. Since moral values are
significant part, the company was required to comply with the community’s social values. They
were required to provide justification and the work on the things that created issues for the
society. It was necessary for Bio-organic to incorporate their social values in their daily actions.
The waste produced by the company was required to be treated in a way that would be odorless

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and harmless. In the case it would have abided by all the social values of the particular society,
the company would have avoided the major brand damage e(Vielmetter and Sell 2014).
Relevant ethical moral philosophies:
According to utilitarianism, a decision or action can be called ‘right’ on the basis of its
decision. Utilitarianism is a form of consequentialism that states that the consequences are the
deciding factors of any action that are the only standard of right or wrong (Alaieri and Vellino
2016). When a decision impacts the society negatively, it is considered as morally wrong. In the
same way, the impact of the Bio-organic’s decision of including liquid waste, blood waste and
grease waste and releasing their waste without treatment was wrong. It simply did not bring a
good consequences or greater good of the society. It was certainly an decision with bad
consequences which the company should have considered before taking the decision. A company
must understand the importance of considering the consent of the society, provided the company
had discussed it with the community before and showed respect to their decision, it would not
lead to a situation as such. Considering the consequences of the action, it is certainly an unethical
act of the company (Mill 2016).
According to the theory of deontology, an action can be considered ‘good’ or ‘right’
when the intension behind the action of the decision is good. By ensuring that the decision would
be beneficial for the society and the environment, the action would have been considered as an
ethical action (Uyar et al. 2015). The company was certainly not considerate about their actions.
Their plans about reaching the goals were separated from considerate thoughts of its impact on
the society and environment.

5BUSINESS ETHICS AND SOCIAL RESPONSIBILITY
As discussed above, business to sustain in the market needs maintain ethical approach of
business. Business ethics are crucial for any business to grow as it concerns people’s moral
judgments in regard to right and wrong. A system of ethics should be followed when the
decisions and actions are taken. They are required to be ethically validated before preceding their
work. Ethics and social responsibility applies in both individual and group capacities. Both
needed to be incorporated in the organization’s daily action, decisions specifically that were
associated with having an impact on the other persons or the environment. In the case if the
company abided by all the social values of the particular society, the company would have
avoided the major brand damage. Also from the perspective of utilitarianism and deontology, the
decision and intention of the company do not make their action an ethical action but only a
ethically flawed business.

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Barry, H. 2019. 'An environmental terrorist': Perth composting business 'ruined' after six-year
legal battle to save reputation. [online] The Sydney Morning Herald. Available at:
https://www.smh.com.au/national/western-australia/environmental-terrorist-legal-woes-ruin-
perth-compost-business-20190527-p51rmd.html [Accessed 29 May 2019].
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