Business Ethics: Identifying and Responding

This assignment delves into the critical field of business ethics. It requires students to analyze various ethical issues that businesses face, explore relevant research and theories, and develop strategies for ethical decision-making. The assignment draws upon a range of scholarly sources and emphasizes practical applications through case studies.

BUSINESS ETHICS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1................................................................................................................................................1
1.2................................................................................................................................................2
1.3................................................................................................................................................3
2.1................................................................................................................................................4
2.2................................................................................................................................................5
TASK 3............................................................................................................................................5
3.1................................................................................................................................................5
3.2................................................................................................................................................6
TASK 4............................................................................................................................................7
4.1................................................................................................................................................7
4.2................................................................................................................................................7
4.3................................................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Prevalence of ethical behaviour in any business organization is generally connected with
the employee loyalty or morale, however, it has been observed ethical operations in a company
has a direct nexus with the levels of profitability which the business unit can earn in long as well
as short terms. Moreover it has the capacity to build or enhance the reputation of the entity in the
market, which in turn many become the point of attraction for the investors. In order to maintain
a consistent and constant positive image in the market, adherence of the ethical code or practices
is a necessity, and enable the company to retain maximum number of investors and employees
for a longer duration of time. The present study shall focus on the ethical behaviour prevalent in
Superdrug Stores Plc, and the extent of benefits which may be experienced by the business in the
course of time.
TASK 1
1.1
Business ethics can be characterized as the set of practices which are prevalent within the
internal system of the company, as well as the manner in which all the operations of the company
are carried out (Chan, 2010). With the assistance of a code of ethics, a business organization can
maintain the level of standard in respect to the activities which are being carried out in the name
of the company. The background of 'business ethics' vary with the context in respect to which it
is being referred. It has been originated through varied academic writings and teachings.
Moreover, it is believed that it has been developed on the basis of a series of scandals which took
place in the world. In a broader sense it can be stated that various commercial exchanges which
have been taking place in the global market, and the economic system existing in the market
form the basis of business ethics. Some of the primary contributors which has led to development
of the ethical behaviour within the organization is the inclination to adopt sustainability in
business. With the assistance of this approach the brand purports to make an optimum utilization
of all the resources and processes. Further, the company assumes a social responsibility and
intends to maintain economic prosperity, and thus had adopted ethical behaviour and practices.
Superdrug Plc can take assistance from the following ethical approaches, in order to ensure
compliance with best practices:
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 Deontological Theory of Ethics: This form of theory imposes a duty or or an obligation
on people to stay in adherence to the prescribed rules and regulations. Hence, the
morality of any action is judged on the basis of compliance with the code of ethics
determined within the company. In pursuance to the same Superdrug plc can ascertain a
set of practices which it expects from its employees . Teleological Theory of Ethics: The theory can be termed as consequentialist, which
infers that the rightness or wrongness of an action is determined on the basis of the
consequences faced by the concerned individuals (Strobel, Tumasjan and Welpe, 2015).
For instance this theory analyzes the actions on the basis of the results or outcomes
which are realized by a particular action. Virtue Ethics: in accordance to this theory of ethics certain virtues or dispositions can be
considered ethical only in specific circumstances, and may not be considered in the same
manner if applied in other circumstances. Another approach which is followed under this
theory is that of Practical Wisdom, which says that certain actions originate from the
habits or personal experiences and hence cannot be always characterized as right oer
wrong.
 Kantian Deontologism: The theory is based on the idea that certain actions are ought to
be undertaken by individuals in specific situations (De George, 2011). These actions are
independent of the results which it may produce, and hence, such acts are not
characterized as good or bad on the basis of consequences.
1.2
Every business unit faces the issue in the form of ethical deviance in the activities or
conduct of the employees, and this refers to the requirement of abiding by Ethical behaviour. In
essence ethical behaviour is the manner in which the employees conduct themselves at the
workplace, and the extent to which they are consistent with the moral value and principles
prevalent in the business world. However, it is extremely difficult to define which action
constitutes to be ethical or unethical, as every person can have a different perspective to the same
subject. In view of the same ethics can be classified as absolute or relative in nature. The former
is capable to characterize an action either as right or wrong. While the latter analyzes actions on
a relative or comparative basis. As observed by many, the concept of absolute ethics is a rare
species or an unattainable subject, and hence, due to difference in perspective of individuals not
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many acts can be analyzed on the basis of absolute ethics (Fassin, 2011). It is an established fact
that truth can never be absolute, and it can only be judged on the basis of the surrounding
situation and circumstances. Existence of absolute truth is considered to be a dogmatic belief,
and is generally driven by some traditions or customs. However, acts of stealing or murder can
be characterized on the basis of absolute ethics and can be termed as wrong in any
circumstances. But what if the murder was an act of self defence, and hence, it is required to
analyzed on the basis of relative ethics.
Relative ethics is analysis of the situation or an act on the basis of the surrounding
circumstances, along with the intention with which it was conducted by an individual. Hence,
this theory is of the opinion that morality is relative to the practices of one's culture. For instance
cow is connected to sacred values in India and hence, consumption of beef is not preffered in
certain regions of the country (Brenkert and Beauchamp, 2012). On the other hand, consumption
of beef in UK is completely normal and is not attached with any form of unethical behaviour.
Therefore, every truth or act is dependent on the moral norms and principles prevalent in the
society, and can be right in one area and wrong in the other.
1.3
It is an established fact that deviance from ethical practices in a business organizations
from the end of the employer or employee, has the potential to impact the manner in which it
performs and produces results. In addition, the good will of the company can be hampered in the
market, which in turn may adversely affect the business. There are various such ethical issues
which have the potential to influence the operations of Superdrug Plc: The fundamental issue of integrity and trust: Every company is under an obligation to
conduct all its business affairs in an honest and fair manner (Sardy and et. al., 2010). The
management of Superdrug Plc shall appraise themselves with the fact that functioning in
a fair and justified manner shall bestow them with success. It is an established fact
companies following ethical practices are always preferred by the customers, and this
enables development of the relation of trust. In the event the company is not following
ethical practices and is conducting the related affairs in an unethical manner, then a
direct effect can be realized on the operations of the company. For instance, if the
management of the company is exercising discrimination while dealing with the
employees then production may be directly hampered, as the employees working in the
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entity may not feel responsible to perform with the best of their capabilities. Moreover,
there is also a probability that the retention rate may drop, which is turn shall have an
impact on the sales as well as production. Even if the company is engaged in activities
which are not socially responsible then also it may hamper the operations of the
company in one or the other way. In other to address these issues the employees of the
company shall be completely demotivated and would no more share the relation of trust
with the management (Standards of Business Conduct, 2011). Moreover, the other
stakeholders would also take an step back from the concerned company, and this in turn
shall adversely affect the operations of the company.
 Non-Compliance and Governance Issues: A business unit is required to function in
compliance with various rules and regulations under the applicable legal framework.
Superdrug Plc shall also stay compliant with all the applicable laws and not attract any
kind of liability. In pursuance to the same the company shall also formulate policies for
the internal governance and mandate all the employees to stay within the boundaries of
the applicable legal framework. In the event of breach of any of the laws or non-
compliance of any particular law may render the operations at a hault (Yoon, 2011). For
instance any compromise on the quality of the product may make the company liable to
shut the operations of the company. It is imperative for the companies to abide by the set
standards and laws in respect to the quality of their products, and in the event of
violation of the same the sales shall be directly hampered. Moreover, the employees may
not feel secured to work with such organizations and stay highly demotivated.
Apart from these there are many ethical issues which may arise such as breach of social
responsibility, privacy, occupational safety, product liability and so on which may have an
adverse effect on the manner the company is operating its functions.
2.1
Every business organization existing in the market strives to gain increased amount of
profits, and hence this forms to be one of the basic objective of every company. Moreover, while
developing business objectives it is imperative for the management to ensure that all the ethical
considerations are being complied with. In a similar fashion, the objectives of Superdrug Plc are
affected in the following manner while taking into account the ethical consideration:
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 Promoting innovation and research: One of the impact which can be posed by the
ethical considerations are that the employees of the company shall stay motivated, and
develop a sense of belongingness for the organization (Ferrell, 2014). In furtherance to
the same the quality of productivity of individual employee shall enhance, and encourage
them to develop innovative ideas and strategies for improving the existing system of the
company. This in turn shall increase the profitability level and assist Superdrug Plc in
attaining their objectives. In pursuance the ethical consideration of engaging in
sustainable practices is given the top priority. Therefore, all the processes for
development of products and undertaking innovation are required to be sustainable in
nature. The management of the company has promoted this objective along with
highlighting the ethical consideration. However, there are instances wherein adoption of
these practices may incur additional expenses for the company. Increases Profitability: The primary objective of every business unit is to earn maximum
profit, and prosper in the business in which it is operating. Various measures and
strategies are implemented to increase the level of profits, and at the same time it is
assured that all the planning and strategies are within the boundaries of ethical practices
(Baker and Comer, 2011). Complying with ethical considerations is one of the best ways
to earn increased profits, as it enables the company to earn strong and reliable relations in
the market. In addition, trustworthy relations are also developed with all the stakeholders,
thereby increasing the level of sales and investment in the company. As mentioned earlier
there are many cases wherein implementing ethical consideration requires extra
investment or additional expenditure. However, Superdrug has evolved effective
strategies which are completely in compliance with ethical needs, and at the same time
has not hampered their profit. Therefore, there is a possibility that the company may be
required to amend their current strategies or policies, for application of code of ethics.
 Stronger relation with Stakeholders: Undertaking all the operations with ethical
consideration assist the company to develop strong relation with the stakeholders which
in turn enable them to evolve strong and faithful relation with them (Corporate
Responsibility, 2013). This in turn aids the company to receive increased amount of
investment, sales and the resulting profits. For instance if Superdrug intends to maintain
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integrity and fairness in business relations then, it may not engage in corruption activities
which have the potential to disrupt the market or the normal course of any business.
2.2
Operating ethically has the potential to cause both positive and negative implications for
the business organization and all of the stakeholders which are associated with them. Some of
them have been enumerated herein: Impact on the Stakeholders:
Positive Implications:
The management of a corporate shall take into account the fact that operating in a ethical
manner shall assist them to develop strong and reliable relations with them. Undertaking the
affairs of the company in an ethical manner shall further enable the stakeholders to develop a
sense of trust and faith in the company, which shall further persuade them to either invest in the
company or develop a sense of loyalty towards the products of the company.
Negative Implications:
On the contrary, it may also require the company to undertake additional efforts and
investment of time as well as money. Further, there may be need to deploy extra resources,
which may have an impact on the level of profitability. Impact on Superdrug
Positive Implications:
An increased level of investment in the company shall produce higher profits for the
company which shall further assist them to attain their objective of enhancing the wealth. Apart
from the increased profit margin, the company shall gain an enhancement in the reputation of the
company and develop an influential brand image in the market. Some of the specific traits which
shall be enjoyed by Superdrug are customer loyalty, satisfaction and increased sales. Further if
the management of the company is following ethical practices then they are no longer required to
worry about the compliances and the connected liabilities. This in turn shall enhance the
operational capabilities of the organization, and enable them to concentrate on other relevant
issues.
Negative Implications:
However, apart from the positive implications the company would be have to bear an additional
financial cost for complying with the ethical issues. In order to stay within the allowed periphery
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the company would be required to undertaken certain additional efforts which can be either in
terms of time or money.
On the basis of the above discussion it can be stated that compliance with ethical
practices shall require Superdrug Plc to face both negative as well as positive implications.
However, it can be concluded that initially it may seem to negatively impact the profits, but the
overall implication is positive to enhance the reputation of the brand in market. Moreover,
customer loyalty and stakeholder confidence are some of the other benefits which shall be
generated.
3.1
Employee Relation is considered to be one of the most important aspects of employment,
and in connection to the same Superdrug has taken various initiatives or measures to assure a
safe and healthy workplace. In connection to the same Superdrug has been playing an impressive
role and have undertaken the following initiatives: Maintaining Trust and Integrity: The management of the company gives utmost
importance to maintenance of trust integrity in its actions and commitments towards all
its stakeholders and especially the internal ones. The company functions to ensure
confidentiality of important and personal information of the employees, which in turn
instils trust (Gilleard, 2012). It is considered important by the management that it is
highly imperative for a workplace to show the element of trust on each other, and also
handle the situation of conflict of interest in the most satisfactory manner. Workplace Culture: An extremely healthy and friendly working culture is present within
the internal system of Superdrug Plc. The employees are encouraged to interact on an
informal basis which in turn reduces the communication gap between the employees. In
addition a strict adherence to the legislation of Health and Safety has been assured. In
pursuance to the same the working conditions for the employees have been designed in
such a manner that the employees are not exposed any kind of risk and are enabled to
work in a safe environment (Trevino, 2010). Moreover, a special attention is paid to the
hygiene of the workplace, in furtherance to which regular cleaning is undertaken by the
assigned persons as well as the employees are also given regular training to keep their
surroundings clean. In addition, all the provisions of the Employment Rights are abided
by the management such as provision of fair wages, work timings and so on.
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 Compliance of Equal Opportunities Act, 2010: In accordance to the Act the management
has formulated a compliant recruitment policy, in pursuance to which the company hires
personnel purely on the basis of capabilities and skills of an individual. The elements of
caste, creed, religion and so on are not considered while recruiting employees in the
organization. Further, special policies have been formulated for the safety of women, and
also granting them flexibility for maternity or pregnancy conditions.
3.2
Every employer ensures to keep a high level of motivation and satisfaction among the
employees, so as to keep them engaged and improve their productivity. Superdrug Plc considers
its employees as one of the most important resources, and in pursuance to the same have
employed various mechanisms: Employment Contract: In compliance with the employment contract entered into
between the employee and Superdrug, every possible effort is made by the management
of the company. For instance the employees are given the fair wages in accordance to the
contract, and also are made to work only for the stipulated working hours. The scope of
work ascertained in the contract is completely followed and is considered to be an
extremely important to aspect. It is believed by the management of Superdrug that it is
imperative to maintain certainty in relation with the employees. In pursuance to the
same, after undertaking the recruitment process all the terms and conditions are
discussed with the selected candidates. This effectively informs them their rights and
duties in the company. This enables them to stay motivated as they are not likely to get
unexpected treatment. Leadership and decision-making Style: An open door policy is followed by the
corporate office, wherein any employee can approach the higher authorities in the time
of need. They are not required to cross various layers of hierarchy to contact with any of
the manager from the higher authorities (Lindgreen and Swaen, 2010). The employees of
the company have been divided into different groups or teams, which is managed by one
leader. Hence, in pursuance to the same the leaders have been specially trained to
employ a suitable leadership style in accordance to the ned of the hour. For instance in
the case of a critical decision making an autocratic style of leadership is followed
wherein the power is concentrated in the hands of higher authorities. However, at other
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times, a participative environment is encouraged, assigning importance to every
employee involved in the operations. The management of the company has also been
conducting training sessions for their managers and leaders, so as to ensure effective
application of different styles. In order to keep the employees engaged it is important for
them to be involved in various significant activities of the company as well as the
decision-making process. In pursuance to the same every all the decisions in a team are
undertaken after accepting suggestions from the team member. This further enables the
employees to have a sense of being an integral part of the working of the entity and
develop a sense of belongingness.
 Provision of monetary and non-monetary Incentives: The employees shall be given
incentives on the basis of their performances, which could be both monetary as well as
non-monetary in nature. This shall enable the employees to feel recognized for their
efforts and thus, motivate them to perform with an increased quality.
4.1
One of the critical unethical issues being faced by Superdrug is that it is indirectly
supporting one of the most criticized practices of animal testing in the area of medicine. It has
been identified that much of the charitable donations of Superdrug are directed to Cnacer
Research, UK which is one of the institutes of Cancer Research. This research institute
undertakes various experiments or conducts research by testing their products or inventions on
poor animals (Van, 2013). This is considered to be one of the most inhumane and unethical
practice followed in the arena of medicine. Superdrug by making the donations has been
supporting this highly insensitive practice, and can be considered as one of the unethical
practices being followed by them (Why I try to avoid Superdrug, 2012). It is important for
Superdrug Plc to understand that even if they are directly not involved in any of the unethical
practices, this indirect association shall cause immense repercussions which they will have to
face. There does not exist any other form of unethical behaviour which the brand is undertaking,
however, the financial support catered to organization attached with unethical practices.
Moreover, it has also been involved in undertaking genetic tests which are completely unethical
in nature. There have also been claims that some of the products of the brand causes addiction or
long term impacts on the health.
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4.2
In light of the image of the company and the unethical practices being followed by them
in the course of business, there are numerous improvements which are required to be adopted by
the company. At the same time it shall be assured by the management that the primary objective
of maximization of wealth shall not be compromised at any point of time. Some of the specific
measures which shall be undertaken by the entity is pursuance to the same are: Use of environmental friendly practices: One of the primary concerns which is a point
of worry for the employees as well as the consumers are that the company has been
utilizing substances which has been causing harm to the employees at the time of
manufacturing of the products (Noland and Phillips, 2010.). In addition, the same
product is being utilized by the consumers and has been causing harm to them.
Therefore, the company shall on an urgent basis restrict itself to use substances and
practices which are causing or has the potential to cause harm to the employees,
customers or the environment. Development of CSR policies: The management has become socially responsible and
has engaged the employees to effectively implement these activities. In pursuance to the
same Superdrug has launched various programmes for reducing their carbon footprint,
disposing off the waste in a proper manner, improving the living conditions of the
society. Moreover, it has also been assured that all the employees, throughout the
hierarchy, are involved in these programmes.
 Installed a separate department for assuring the safety of workplace: This department
is made responsible to take care of each and every aspect in relation to the health and
safety of all employees. Maintain a healthy environment and assure hygienic
surroundings. In addition it is also ensured by this department that none of the
employees are being treated in a detrimental way by other employees or management. In
addition, this department also accepts anonymous grievances of the employees. This
provides a sense of security to the employees, and keep them motivated to work.
TASK 2
4.3
Covered in poster.
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Superdrug has signed up the code of conduct prescribed by BSCI. Some of the prominent
considerations in the applicable code of conduct are:
 All the employees and managers shall mandatorily not discriminate against anyone on the
basis of any of the personal characteristics as specified in Equal Opportunities Act, 2010.
 A friendly relation shall be maintained between the employer and the employees.
 The surroundings shall be kept clean and hygienic, and everyone shall act in compliance
with the Employment Rights Act.
 It shall be assured that none of the actions of the company are hampering the health of the
environment, and rather a significant contribution shall be made by the company towards
the betterment of the society and well being on the humans.
 Safety and security of the colleagues shall be considered as a prime consideration for
everyone, and every effort shall be undertaken to not cause harm to ther, directly or
indirectly.
 Everyone shall be honest and trustworthy towards accomplishment of the aims and
objectives of the company.
CONCLUSION
It can be inferred from the present study that Superdrug Plc has undertaken various
initiatives to assure compliance with the applicable legal framework, along with the ethical
considerations which a business organization should have. However, there are still some ethical
issues which are being faced by the company, which is in the form of encouraging animal testing
by the Cancer Institute. Moreover it has also been identified that the company is still following
certain unethical practices which have been causing harm to the environment. Therefore,
Superdrug requires to undertake certain amendments in its existing manner of operations.
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REFERENCES
Books and Journals
Baker, S.D. and Comer, D.R., 2011. " Business Ethics Everywhere": An Experiential Exercise to
Develop Students’ Ability to Identify and Respond to Ethical Issues in Business. Journal of
Management Education, p.1052562911408071.
Brenkert, G.G. and Beauchamp, T.L., 2012. The Oxford handbook of business ethics. Oxford
University Press.
Chan, K. C., 2010. Business ethics research: A global perspective. Journal of Business Ethics.
95(1). pp. 39-53.
De George, R. T., 2011. Business ethics. Pearson Education India.
Fassin, Y., 2011. Small-business owner-managers’ perceptions of business ethics and CSR-
related concepts. Journal of Business ethics. 98(3). pp. 425-453.
Ferrell, O. C., 2014. Business ethics: Ethical decision making & cases. Cengage learning.
Gilleard, M., 2012. Rise of Transparency and Corporate Social Responsibility. The. Int'l Tax
Rev. 23. pp. 36-37.
Lindgreen, A. and Swaen, V., 2010. Corporate social responsibility.International Journal of
Management Reviews, 12(1), pp.1-7.
Sardy, M. and et.al., 2010. Dimensionality of business ethics in China. Competitiveness Review.
20(1). pp.6–30.
Strobel, M., Tumasjan, A. and Welpe, I., 2015. Do business ethics pay off?.Zeitschrift für
Psychologie/Journal of Psychology.
Trevino, L. K.,2010. Managing business ethics. John Wiley & Sons.
Van V. T., 2013. Customer satisfaction, trust and commitment as predictors of customer loyalty
within an optometric practice environment. Southern African Business Review. 16(3). pp. 81-96.
Yoon, C., 2011. Theory of planned behavior and ethics theory in digital piracy: An integrated
model. Journal of business ethics. 100 (3). pp. 405-417.
Online
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<http://www.axa.com/en/responsibility/>. [Accessed on 25th November 2016].
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<http://www.mcdonalds.com/content/dam/AboutMcDonalds/Investors/9497_SBC_International
_EN-US%20v2%20final%20061311.pdf>. [Accessed on 25th November 2016].
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February, 2017].
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