Ethics in Business: A Comprehensive Analysis of Ethical Issues and Decision-Making Processes

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This assignment delves into the crucial role of ethics in the business world, exploring the meaning of ethical principles and their impact on organizational success and sustainability. It examines unethical business practices through case studies of Volkswagen, Amazon, and Google, highlighting the consequences of deviating from ethical norms. The assignment further analyzes the ethical behavior of Apple and Samsung using Sethi's typology and Mintzberg's Conceptual Horseshoe, respectively. It then evaluates the ethical decision-making processes of Tesco and Starbucks, showcasing how these companies integrate ethical considerations into their operations. By exploring these concepts and real-world examples, this assignment provides a comprehensive understanding of the importance of ethics in business.

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Ethics in Business
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Table of Contents
Introduction......................................................................................................................................3
LO1: Understand ethical issues relating to business.......................................................................3
Task 1...............................................................................................................................................3
1.1 Discuss what is meant by ethics in business with reference to three examples........................3
LO2: Understand the process of ethical decision making...............................................................5
Task 2...............................................................................................................................................5
2.1 Analyze an organizations ethical behavior using:.....................................................................5
a) Sethi’s typology........................................................................................................................... 5
b) Mintzberg’s Conceptual Horseshoe............................................................................................ 6
Task 3...............................................................................................................................................7
2.2 Using two examples, analyze and evaluate the ethical decision making process within a
business setting................................................................................................................................ 7
Conclusion....................................................................................................................................... 8
Reference List.................................................................................................................................. 9
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Introduction
Ethics is a crucial part in business, which helps the marketers to ensure that the business is
following the moral principles, while conducting all the business activities, which will further
help the marketer to follow all the legal norms in the business. Ethics is defined by Joshi et al.,
(2016) as the moral principle or philosophy, which is a branch of philosophy, involving
systematization, defending and recommending the concepts related to right and wrong ways to
conduct business processes. Making the business ethical is a key responsibility of the marketer,
to avoid any issues. In this context, the following assignment would focus upon exploring the
meaning of ethics and develop a thorough understanding regarding the role played by ethics and
ethical norms in the success and sustainability of the business. In addition, to develop real time
skills and expertise, exploring the existing examples of organization’s ethical practice will be
demonstrated.
LO1: Understand ethical issues relating to business
Task 1
Discuss UNETHICAL BUSINESS PRACTICES–case studies write a summary from 3 of
the following (1.1)
Business ethics or corporate ethics assesses the ethical principles and related issues, which may
arise in the business environment. Following the principles or philosophies of proper business
ethics, help an organization to deal with the issues in organizational environment like “corporate
governance, bribery, insider trading, corporate social responsibility, discrimination and fiduciary
responsibilities”. Lack of adherence to the ethical guidelines can lead to unethical practices,
which may hinder or impair success and sustainability of the organizational operations. In this
context, the following three examples will help to identify the unethical practices in the business
and their impact.
The first example has been focused upon the shocking unethical behavior of one of the leading
automobile company, Volkswagen! At the end of 2015, the leading automobile marketer has
been announced as “diesel dupe”, in terms of “rigging the emission test for making the diesel
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vehicle ensure the reduction of emission has lessened the overall pollution”. Therefore, the
organization has not met the requirements needed by the new regulations regarding the
environment protection act (EPA) (Mansouri, 2016). The case was under investigation of
different authorities. The analyst found that the company’s deceptive scandal has been resulted in
a range of divesting factors, which are leading to an essential scandal! Further, it has been
revealed from the analysis that the key impacts of this deception on the stakeholders of
Volkswagen are noteworthy, who have judged continuously, the judge has not succeeded for
finalizing the case and deliver for the penalty of the company.
The next example of unethical business was focused upon Amazon. News broke in 2016 that
Amazon hash harsh work condition, several current and former employees have significantly
represented their dissatisfaction, while working in this company. In the organization, unethical
environment has been established, which hindered their choice of satisfaction in the
organizational environment. It has been revealed from the evidences that the company is
becoming communized; and the competing on price all of a sudden foe the retailer indicating the
preference or prioritization for deciding the point for customers (Kalai, 2016). Therefore, by not
treating its employees in a right ethical way, the company is showing its unethical behavior,
which has threatened the mistreated employees to boycott the company, until it is charged its
practices. In terms of sustaining the organizational growth, taking care of people working for the
company is crucial; lack of which can lead to compromised sustainability and success of the
organization. It has also indicated non-compliance of the organization with the social
responsibility of the organization towards the society, where it is running the business.
In addition to that, the leading technology group Google has also been accused for its “devious,
calculating and unethical” behavior. It has been revealed that the company has been accused for
using “smoke and mirrors to avoid taxpaying”, while undertaking sales in Britain and Ireland.
Further, the Liberal Democrat business secretary claimed that the behavior of the company was
immoral and these are nor driven by the ethical norms and commitment. The company paid
£3.4m in UK tax in 2011, on the basis of the services offered by the other organizations in the
group. In Ireland, profits on $4.9bn of sales to UK customers were made, but the company
claimed that in Ireland, sales are transacted. Overall, the company paid foreign tax at a 5% rate,
as it is using the tax structure, which involves Bermuda known as a “double Irish” (Houlder,
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2013). It has been claimed that 99% of advertisers of Google had no deal with UK marketing
staffs, whereas the 15 clients are the major ones, who are contributing 60 to 70% of revenues.
More sales commission was paid to UK sales staffs compared to Irish counterpart. The head of
the National Audit office revealed that many people are listening and claiming that they thing
they are selling in the UK. Therefore, to sustain the business, the more values added by people in
the UK, the more transfer price should be paid to the UK Company (Houlder, 2013).
LO2: Understand the process of ethical decision making
Task 2: For this task you are required to provide a report discussing what is meant by
ethics in business with reference to three examples; and analyzing two global organizations
ethical behavior using (2.1)
a) Sethi’s typology
Instead of social responsibility, some people refer it as the social responsiveness. In this context,
Sethi has proposed a three-step model for adapting corporate behavior to the social needs, which
are as follows:
1) Social obligation: This is referred to the corporate behavior of a firm in response to the legal
constraints or market forces.
2) Social responsibility: This is referred to the corporate behavior congruent with social
standards, norms, values and expectations.
3) Social responsiveness: Here, responsiveness is referred to the long-run strategies of the
organization in the social system, instead of exploring how the company should respond to social
pressure. Preventive measures must be anticipated.
In order to analyze the ethical behavior of organizations using this model, Apple Inc. would be
utilized. Apple is continuously undertaking significant role in ensuring their socially responsible
role in the corporate field. For instance, it has launched the “Global volunteer program” in 2011
for encouraging employees to be local community volunteers. In addition, the organization has
enforced education and development programs. In response to social conditions, the organization
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has offered free charge in 18 factories employees to participate in different courses in 2016. In
the “Global Volunteer program”, the organization has donated more than USD 78 billion.
Further, the organization has enforced the supplier code of conduct, following the human rights,
and it has been revealed that 95% compliance among the suppliers have been achieved to the
code. Apple has also undertaken initiatives for reducing energy consumptions. It has reduced the
energy consumption by 57% for instance; Mac Mini is the world’s most energy efficient desktop,
through which the company is exceeding Energy Star Guidelines (Dudovskiy, 2018). The carbon
emission has also been greatly reduced in response to its environmental protection initiatives,
which has been noted to be 29.5 million metric tons in 2016, compared to 38.4 million in the
previous year.
Further, in order to sustain the long-term sustainability of the business, the CEO of the company
has toured the Foxconn manufacturing plant in China. Here, the management culture is based on
authoritarian, which may have harsh work condition leading to adverse impact. Thus, the CSR
unit is providing continuous effort to establish some rules for corporate behavior in the digital
age, which will sustain the business for long-term, which is supported by the third element of
Sethi’s typology model.
b) Mintzberg’s Conceptual Horseshoe
Further, Mintzberg developed this model for explaining power around the organization. The
theorist claimed that the organization should be at the center of the Horseshow, in a position
where the company can be trusted, if they adopt a balance between economic and social goals. In
this context, with Samsung’s case, the theory can be understood. At Samsung, the key
responsibility of sustainability management attempts to develop integrated value. The company
is not only doing that through making economic values through maximizing profits or
shareholders’ values. However, the organization is also taking on a stronger liability as a global
citizen for creating social valued, thereby creating a balance (Samsung Electronics America,
2018). As the company is a delivering innovative products and services through the value
chain, the company is able to develop values in the fields of economy, society and environment.
It is continuously monitoring the financial and non-financial impacts exerted on society through
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such processes, for maximizing the positive impacts, while minimizing the negative ones;
therefore, it is indicating a balance between economic and social roles.
Task 3
Using two examples, analyze and evaluate the ethical decision making process within a
business setting (2.2)
In business settings, ethical decision-making has become a crucial job for the managers in the
organization, to eliminate any kinds of conflicts in the business. In order to do that, the global
organizations are using a range of strategies, which would help them to shape their ethical
decision making process in the organizational practices. In this context, the following two
examples of Tesco Plc and Starbucks coffee shop will help to understand how ethical decision-
making process is promoting the business success. In this context, Tesco’s trading responsibility
through Fairtrade is noteworthy. The company has been supporting and following Fairtrade since
it has been launched in 1994. Following this ethical framework, the organizational managers
have undertaken decisions regarding offering the customers a wide range of selection related to
Fairtrade certified products through different areas, including tea, coffee to oranges and
chocolates. The company is the second largest retailer of Fairtrade products through UK, which
is able to sell millions pounds of Fairtrade products per week. The company mainly sources its
Fairtrade products from South Africa, Kenya and India (Tescoplc.com, 2015). In 2007, Tesco
Sustainable Dairy Group was established with approximately 650 dairy farmers. All of them get
fair price for their products, reflecting the actual product costs. It is indicating that the
organizational decision-making is ethical, making it a socially responsible organization.
Ethical decision-making can also be demonstrated by demonstrating the environmental
stewardship by the leading global coffee business Starbucks. It has been revealed that the
company is sharing the customers’ commitment to the environment. The organization believes in
caring for the planet and working with others, while encouraging them to do the same. While
relying on the agricultural product, the organization believes in making good business sense.
Being ethical indicates being socially and environmentally responsible. Considering this factor,
the organization is undertaking ethical decision making, to ensure that the business is
7

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environmentally sustainable. In this context, it is noteworthy that the company has undertaken
several initiatives towards environmental sustainability and social responsibility (Starbucks
Coffee Company, 2018). The organization has attempted to develop more environmentally
friendly cups and they are working hard to expand the recycling programs in an effort for
reducing the waste. The company is committed to reduce the overall energy consumption and
using renewable energy sources for lowering the impact on the planet. The organization is
further making the stores as green as possible through use of responsible building materials and
efficient designs for reducing environmental footprint. The coffee growing regions are
significantly affected by climate change, for addressing the issue the organization is undertaking
several initiatives and helping the farmers to mitigate the issue.
Conclusion
Ethical business practices are crucial for ensuring long-term success of the businesses. It is the
responsibility of the marketer to ensure that the business is following the moral values, beliefs
and rules regarding right and wrong. In this context, it is noteworthy that the use of some
theoretical model will help to improve the understanding of ethical principles and how these are
achieved through the business, which has been demonstrated in the current assignment.
Examples of some global organizations have been discussed in the assignment to improve the
overall quality of understanding.
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Reference List
Dudovskiy, J. 2018. Apple Corporate Social Responsibility (CSR) - Research-Methodology.
[online] Research-Methodology. Available at: https://research-methodology.net/apple-corporate-
social-responsibility-csr/ [Accessed 27 Aug. 2018].
Houlder, V. 2013. Google accused of devious and unethical tax behaviour | Financial Times.
[online] Ft.com. Available at: https://www.ft.com/content/d1193b70-be2b-11e2-bb35-
00144feab7de [Accessed 27 Aug. 2018].
Joshi, T., Sharma, S. and Kumari, S., 2016. Ethics in Business. E-Commerce for future &
Trends, 1(3), pp.1-2.
Kalai, G. 2016. Amazon Is Cruel and We Are to Blame. [online] HuffPost. Available at:
https://www.huffingtonpost.com/gregoris-kalai/amazon-is-cruel-and-it-is_b_8026824.html
[Accessed 27 Aug. 2018].
Mansouri, N., 2016. A case study of Volkswagen unethical practice in diesel emission
test. International Journal of Science and Engineering Applications, 5(4), pp.211-216.
Samsung Electronics America 2018. Strategy | Sustainability | Samsung US. [online] Samsung
Electronics America. Available at:
https://www.samsung.com/us/aboutsamsung/sustainability/strategy/ [Accessed 27 Aug. 2018].
Starbucks Coffee Company 2018. Environment | Starbucks Coffee Company. [online] Starbucks
Coffee Company. Available at: http://www.starbucks.in/responsibility/environment [Accessed
27 Aug. 2018].
Tescoplc.com 2015. [online] Tescoplc.com. Available at:
https://www.tescoplc.com/assets/files/cms/Resources/Trading_Responsibly/
Fairtrade_Position_Statement_2015_1.pdf [Accessed 27 Aug. 2018].
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