Ethics and Sustainability in 7-Eleven: Two Major Ethical Issues and Decision-Making Frameworks

This article discusses two major ethical issues in 7-Eleven related to wage exploitation and the ethical failure of leadership. It also presents two decision-making frameworks to solve these issues. The article emphasizes the importance of considering ethical code of conduct in business operations. Course code, course name, and college/university are not mentioned.

Running head: ETHICS AND SUSTAINABILITY
Ethics and Sustainability
Name of the Student
Name of the University
Author’s Note

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Part A
Answer to Question 1
At the time of conducting the business operations, the companies are needed to consider
all the ethical code of conducts in order to avoid any ethical issue. The following discussion
shows two ethical issues in 7-Eleven:
1st Issue: 7-Eleven is one of the largest convenience and gas stops in Australia. In the year of
2015, 7-Eleven breached the ethical code of conduct as the company was involved in the use of
exploitive and illegal work practice for the reduction of labor costs. For the purpose of the
reduction of labor cost, the company adopted the illegal strategy of underpaying young and
foreign workers (smh.com.au, 2018). Most of the time, the company was paying the young and
foreign employees with 50% below of the minimum wage. Apart from the young and foreign
employees, all the employees were facing the same problem related to the underpayment of their
wages. The investigation report of both the ABC Four Corners and Fairfax showed that the
company violated the Australian ethical code of ethics by taking the strategy of underpaying the
employee as this is a highly illegal business practice (smh.com.au, 2018).
2nd Issue: Apart from the above ethical issue, another ethical issue in 7-Eleven is the ethical
failure of leadership in the process of underpayment of the employees. It needs to be mentioned
that many of the employees of 7-Eleven were international student and their visas only permit
them to work for 20 hours per week (smh.com.au, 2018). However, as per the investigation
report of ABC Four Corner and Fairfax, the managers and franchisees of the company were
found in blackmailing those international students for complaining to the Fair Work Australia in
case they disclose the matter of underpayment to the authorities. After the publication of the

2ETHICS AND SUSTAINABILITY
investigation report, the founder of 7-Eleven, Russ Withers and other top level executives
admitted the adoption of the strategy of wage exploitation. From the above discussion, it can be
seen that the top level management of the organization along with the founder were involved in
this unethical wage fraud case (smh.com.au, 2018). For the leaders of 7-Eleven, it is not ethical
to adopt a system that fails to operate profitability while complying with all the ethical rules and
regulations. For this reason, the leaders of 7-Eleven cannot hide from the ethical failure in their
business operations. The wrong decisions of these leaders of 7-Eleven have negative impact on
the employees and staffs of the business. Thus, in the whole situation of 7-Eleven, ethical failure
of the leaders can be seen (smh.com.au, 2018).
Answer to Question 2
The following discussion involves in the discussion of two major ethical frameworks for
solving the ethical issues in of 7-Eleven:
Framework 1: There is a specific framework for solving the ethical issue related to
underpayment of wages in 7-Eleven. The presence of five specific steps can be seen in this
framework. The first step is the recognition of the ethical issue (Levitt, 2013). In this step, the
responsible authority is needed to identify the ethical issue that is wage exploitation in 7-Eleven.
The next step involves in obtaining all the facts of the issue that is the reason, the related
stakeholders and others. The next step involves in the evaluation of all the alternative actions that
can be taken to solve the ethical issue. In this situation, the company is needed to consider the
interest of all the relevant stakeholders so that the option can best serve the company. After that,
the next step involves in selection one approach among the alternatives for managing the ethical
issues and to test it. In the last stage, the management of 7-Eleven needs to act and reflect on the
outcome of this approach for managing the ethical issue (Craft, 2013).

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Framework 2: Another major ethical decision-making framework can be applied in the case of
7-Eleven and this framework involves four stages or steps. The first step involves in the
recognition of the ethical issue related to wage exploitation in 7-Eleven. After this, the next
process involves in making judgment related to the ethical issue (Crossan, Mazutis & Seijts,
2013). This process involves in acquiring all the relevant information and facts so that the
reasons of the ethical issue can be identified. After that, the next step involves in the
establishment of moral intent among the employees and staffs of the company. In this process,
all the alternative solutions are analyzed so that the correct approach can be implemented. The
last process involves in engaging with the ethical behavior of the employees and senior managers
of the company for getting the solution of the ethical situation (Morales-Sánchez & Cabello-
Medina, 2013).

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References
Adele Ferguson, S. (2016). 7-Eleven's wage fraud sparks $170 billion blow back. The Sydney
Morning Herald. Retrieved 14 July 2018, from
https://www.smh.com.au/business/companies/7elevens-wage-fraud-sparks-170-billion-
blow-back-20160826-gr264h.html
Craft, J. L. (2013). A review of the empirical ethical decision-making literature: 2004–
2011. Journal of business ethics, 117(2), 221-259.
Crossan, M., Mazutis, D., & Seijts, G. (2013). In search of virtue: The role of virtues, values and
character strengths in ethical decision making. Journal of Business Ethics, 113(4), 567-
581.
Ferguson, A. (2018). Revealed: How 7 Eleven is ripping off its workers. Smh.com.au. Retrieved
14 July 2018, from https://www.smh.com.au/interactive/2015/7-eleven-revealed/
Levitt, D. H. (2013). Ethical Decision-Making Models. In Values and Ethics in Counseling (pp.
227-232). Routledge.
Morales-Sánchez, R., & Cabello-Medina, C. (2013). The role of four universal moral
competencies in ethical decision-making. Journal of Business Ethics, 116(4), 717-734.