Business Ethics and Responsible Management: A Case Study of Ocado

This report discusses the importance of business ethics and responsible management in today's society using the case study of Ocado. It includes recommendations for the company, impact on stakeholders, and application of ethical theories.

Business Ethics and
Responsible
Management

Table of Contents
PART 1A- REPORT TO SENIOR MANAGERS..........................................................................3
INTRODUCTION...........................................................................................................................4
THE ROLE OF BSUIENSS IN SOCIETY.....................................................................................5
IMPORTANCE OF BECOMING ETHICAL.................................................................................6
IMPACT ON OUR STAKEHOLDERS..........................................................................................7
Shareholders................................................................................................................................7
Consumers...................................................................................................................................7
Suppliers......................................................................................................................................7
Delivery Workers........................................................................................................................7
RECOMMENDATIONS.................................................................................................................8
PART 1B- APPLICATION OF ETHICAL THEORIES ON OCADO’S CASE STUDY.............8
Utilitarianism..............................................................................................................................8
Norm Theory.............................................................................................................................10
PART 2 ETHICAL LEADERSHIP...............................................................................................11
REFERENCES..............................................................................................................................14

PART 1A- REPORT TO SENIOR MANAGERS

INTRODUCTION
Business ethics refers to the beliefs, practices and value of business firms and
employees which will aid the firm in gaining the high reputation of the brand. It will assist the
firm for conducting the activities of business in suitable manner (El-Bassiouny, Darrag and
Zahran, 2018). This report is based on the Ocado group, an online retailer which offers wide
range of own brand products including groceries, beauty products, household products, bakery
products and poultry. In addition to this it also provides online retail solutions to other brands
such as Marks and Spencer and Morrison. The company was established in the year 2000 by Mr.
Jonathan Faiman, Jasson Gissing and Tim Steiner and headquartered at Hatfield, Hertfordshire,
UK. Ocado currently has 19347 employees and offers wide range of retailing products in UK,
Canada, Poland, Bulgaria, France, Australia, Sweden, Japan, Spain, and the US (Global Data,
2022).
It was revealed by a report in the observer that the rapid delivery drivers employed by
Ocado are being paid less that £5 an hour. This claim made headlines as the Ocado was receiving
high profits while much of its rapid delivery staff was being underpaid. Drivers have stated that
the reduction in their earnings was related to the introduction of new delivery partner Ryde. The
company refuted such claims stating that drivers are being paid properly with income reaching
higher than the minimum wage even after accounting for reasonable expenses. Soon after, the
driver employed by Ocado went to strike for the pay reduction. IWBG, the worker’s Union
representing Ocado’s drivers stated that the decision to launch strike against Ocado was taken
after drivers were threatened with being terminated for speaking about the pay reduction.
It is considered unethical to engage in labour exploitation and pay them in low wages
which is not enough for their survival and take advantage of their financial situation. Yet, the
actions conducted by Ocado have shown complete disregard to business ethics leading escalation
of an easy to solve remuneration issue. The driver strike has negatively affected the reputation of
Ocado and could have been avoided if leadership decisions were made after considering business
ethics. This report uses the case study of Ocado to understand role of business in today’s society
and importance of being an ethical corporation. The impact of the low pay allegations and
employee strike on stakeholders is also explained in this report with suitable recommendation for
the company. Application of ethical theories in context of Ocado, discussion on being an ethical
leader and personal views on managing a business ethically are also included in this report.

THE ROLE OF BSUIENSS IN SOCIETY
A popular philosophical system in context of the role of business in society is that the
primary function of entrepreneurs and enterprises is to produce and distribute goods and services
so that a specific consumer demand or need can be fulfilled. According to this philosophical
system the most important responsibility of our business is towards their consumer to deliver
satisfactory goods all services should that they're able to get profit in return (Harrison and et, al.,
2019). According to this school of thought the most important stakeholder of a company are its
consumers and shareholders end from needs to make continuous effort to satisfy their consumer
through innovative goods and benefit the shareholders through high profitability. It is a
conventional approach towards leading and operating a business because it does not require
much attention outside sale of goods and profitability. Other important areas such as
sustainability, integrity, honesty, eliminating exploitation, trustworthiness, fairness and respect
are avoided or paid less attention in favour of achieving high profitability. In recent times this
philosophical idea that's the main goal and priority of a business should be prophet collection but
satisfying their target consumer base has been criticized because of its negative ethical and
environmental implications. Presently businesses governments, institutions and consumers are
demanding rejection of this philosophical approach in favour of a more ethical philosophy about
rule of business in society.
Philosophical approach which is being more appreciated in comparison to the above
stated profit focused philosophical system is that the role of business in the current society
expands beyond rendering profits and offering goods with inclusion of improving sustainability
and meeting the needs of every stakeholder impacted by the company. In this philosophical
approach the term stakeholder encompasses all individuals or groups who have arrested interest
in the performance of the business (Haski-Leventhal, 2018).. This includes employees suppliers
government trade authorities and institutions, environment, impacted community, consumers,
shareholders, investors and third party business is affected by the company. An enterprise needs
to focus on providing satisfaction and working for the benefit of all of its stakeholders in an
equal manner while also addressing the need to attain profits. Here corporate organizations
collaborate with institutions workers unions suppliers and industry players to ensure that they
have a positive impact on people planet and profit. Currently this philosophical approach is being

prioritized by businesses everywhere because it brings goodwill to the company by making it
more ethical and sustainable.
IMPORTANCE OF BECOMING ETHICAL
The concept of increasing ethical nature of an enterprise focuses on minimizing the
negative impact and increasing the positive impact on society or environment without reducing
profitability. Improving ethical nature of business establishments is important because there is a
certain value in doing the right thing and acting outside self-interest for the betterment of whole
society. The discipline of business ethics is essential for success of our business in the current
age cause it helps organization maintain a positive reputation among public and attract loyalty
from consumers because of their goodwill actions and initiatives (Rendtorff, 2019). .
Business ethics is also considered an essential topic for any modern day organization
because becoming more ethical can help businesses attract and retain top talent. Employees in
the modern age want to be associated with businesses which have positive reputation about their
ethics and environment. This is because organizations with a higher ethical environment are able
to protect rights of the employees and take action against worker exploitation increasing their
retention. One of the primary motivators for prioritizing business ethics in the current age is that
it helps organizations avoid legal trouble and comply with anti exploitation legislations
implemented by government in different countries (Vallaster and et, al., 2018).
There have previously been many examples of businesses facing serious legal trouble
because of their non compliance with business ethics leading to some kind of worker or
environmental exploitation. A suitable example which highlights the negative impact of not
following business ethics in the modern ages the antitrust investigation implemented against
online retailer and ecommerce company Amazon. The American e-commerce giant has
achieved massive profitability and quick global success. Amazon is now being investigated by
United Kingdom antitrust watchdog over its marketplace practices. This raises serious ethical
concerns against Amazon as it is also being investigated by the European Commission under its
unions executive arm for the charges of worker exploitation (Kharpal, 2022). This example
clearly depict the importance of business ethics as even the highest valued businesses face
damaging consequences if business ethics is not applied to improve ethical nature of the
company.

IMPACT ON OUR STAKEHOLDERS
Shareholders
The current practices adopted by Ocado based on gig economy provided advantage to its
shareholders because it helped the company cut costs on rapid delivery service by competing
with other online retailers in United Kingdom through their swift delivery offering. Consumers
in the retail industry are now expecting and preferring faster delivery options as online retail
landscape is becoming intensely competitive (Helm, Kim and Van Riper, 2020). But after
escalation of the low payment issue under start of strike stakeholders have been negatively
affected because this scenario affects daily business operations an also impacts on the public
reputation of the company. In this way the share prices of the company its daily operation and
future profit potential are directly impacted negatively affecting the shareholders.
Consumers
The unethical practices of Ocado in context of its rapid delivery worker treatment provided
benefit of quick deliveries to its current consumer base. Despite this quick delivery service of the
firm, the reputation of ocado among consumers has decreased drastically because of poor
treatment of workers. Consumers in the current day and age prefer ethical businesses because of
rising awareness about worker exploitation, consumer rights, climate activism and corporate
impact on society (Manyukhina, 2018).
Suppliers
The suppliers who worked with Ocado are negatively affected because of this scenario and their
unethical adoption of the gig economy model to treat their workers. But it is now clear that the
suppliers are also negatively affected because of the workers as it results in late delivery of
products end harms their brand name through association with a worker exploiting groups such
as ocado.
Delivery Workers
The delivery workers working for the rapid delivery service of Ocado are the most impacted
stakeholder group in this case because there daily earning is reduced which creates a threat for
their survival. The unethical leadership and disregard for worker challenges resulted in workers
starting an official strike against the company which could have negative legal and branding
consequences for ocado. Union workers are a key players in helping an organization become

more ethical because they support business in identifying worker exploitation across their supply
chain and help in protection of worker’s rights (Tsai and Wu, 2022).
RECOMMENDATIONS
To mitigate ethical issues few recommendations are made by Ocado company which are as
follows-
 To the company it is being recommended that they need to increase the wages of their
drivers and minimum wage rate is need to be pay of their nation. This is a suitable
recommendation for Ocado as it will help the company directly at the employees
situation and support the workers in coming back to work.
 The Ocado corporation is also advised to hire more drivers in order to prevent over
transporting their current staff. If a driver needs to transport large bags to consumers, the
corporation must provide them with a large vehicle, such as a car or a van. This is an
indirect solution for the problem faced by Ocado which will not only benefit the workers
but will also help the company cope up with rapid delivery service demand without
affecting their goodwill or reputation.
 The employer must provide medical services and free life insurance to its employees who
drive corporate vehicles at free of cost. Additionally, they offer health insurance so that,
in the event that a driver is hurt or has an accident, the cost of their medical care will be
covered. The third recommendation will benefit the company in long run as more talented
and dedicated employees will be attracted to the company while also helping the
company implement damage control to gain back their goodwill from the public and
consumers. This action will help the company appease workers and consumers so that it
can avoid any serious damage to its profitability and benefit its shareholders
PART 1B- APPLICATION OF ETHICAL THEORIES ON OCADO’S CASE
STUDY
Utilitarianism
This theory effectively highlighted the care and outcome of severely inappropriate
behaviours. The research of price benefits is clearly tied to this hypothesis, which was put forth
by Mill and Bentham. It leads to a focus on the fundamental idea that ethically righteous
behaviour is suitable when done in large quantities for a large number of people . This

Utilitarianism theory is also best taken into account for the popular superior feeling idea and
focuses on the benefits of the bulky figure. Kant rejected the traditional conceptions of ethics
and agreed that the "supreme principle of ethicality" serves as the foundation for all ethical
behaviour. In Kant's view, the conditions necessary to complete the work or not, in Kant's view,
are related to the correct and erroneous acts. In the case of utilitarianism, the Kant theory
determines that there are several significant behaviours that must be prohibited, including
sleeping, stealing, and other behaviours (Ye and et, al., 2020).
The pain pleasure analysis is a simple tool which can help individuals understand utility
of every option involved in making a decision. The application of plain pleasure analysis for
okado is completed below so that the selection of the option which results in highest utility and
results in pleasure for most stakeholders is completed below:
Action 1: Negotiating with workers
Union and providing drivers higher
pay.
Action 1: Not negotiating with
workers Union and keeping the same
pay for drivers.
Pleasure Pain Pleasure Pain
Shareholders Improvement in
goodwill and
future success of
the firm.
Reduction in
profit due to
higher labour
costs.
Higher
profitability.
Lack of public
trust and loss of
consumers.
Consumers Keeping a clear
conscious by
responsible
shopping with
Ocado
Switching the
company to look
for more
responsible
online retail
brand.
Suppliers Getting
associated with
ethical brand and
getting regular
orders.
Negative
branding impact
because of
associating with
an unethical

brand.
Drivers Getting paid
aptly with better
working
environment
Working without
getting enough
money for
survival.
Government Removal of
workers strike to
reduce any kind
of exploitation in
corporate world.
Utility +5 -1 +1 -5
It is understood from the above application of the utilitarianism theory that the respective
organization needs to adopt the action of negotiating with the workers and providing them higher
pay to provide maximum benefit to stakeholders and getting the highest utility. However the
utilitarianism theory has been criticised because of its limitations such as creation of black and
white constructs about morality and its unpredictable nature about the consequences of the
actions.
Norm Theory
The norm theory is a popular area of business ethic which deals with the distinguishing
factors between morally right and morally wrong actions. This is a widely regarded theory in
business ethics because it centres around formation of moral regulations which have direct
implications for what the actions of an ethical organization should be. According to this theory
certain acceptable forms of conduct are available which are defined for different types of
probable scenarios (Lin, Padliansyah and Lin, 2019). This theory is centred around making
moral judgements about events by focusing the central argument around preservation of
something which is deemed as morally good or preventing changes which can lead to morally
bad results.
A suitable example of application of this theory in corporate environment is the usage of
code of conduct sore hand books to ensure that the entire organization follow specific rules in
different organizational situations to ensure that ethical nature of the company is maintained at

all times. In this case the code of conduct or rule book at as a guideline for employees managers
and leaders to act ethically when making business decisions and differentiating between actions
which are morally good or morally bad with regards to this specific situation such as workers
strike or grievance issue with an employee.
In context of the respective organization the adoption of the norm theory requires the
company to implement detailed code of conduct and employee handbook which have specifically
written procedures about different business scenarios such as employee grievance with payment
issue. In this way company will be able to build managers and leaders who are able to take the
decision Ethically by considering the impact on different stakeholders and its ethical value as
mentioned in company handbook or code of conduct. Ocado needs to build a code of conduct
and handbook which is transparent to every employee in the company and is connected to the
goals and values of the form so that it does not negatively impact profitability or current
operations while also providing the benefit of making the company more ethical.
However there are certain limitations to the norm theory which involve, high level of
abstraction from the real world as the actual world is complex and resolving daily challenges
associated with human behaviour is dependent on the specific context of the problem which
cannot be solved by unlimited guidelines of rules or regulations (Prado and et, al., 2020). Despite
this limitation the respective organization need to follow the norm theory and adopt a detailed
and transparent code of conduct as well as employee handbook so that they are able to avoid
such situations in the future and avoid escalation of worker exploitation in the workplace.
PART 2 ETHICAL LEADERSHIP
Leadership is defined as the process of influencing an individual's overall attitude in the case
of attempting to achieve organisational goals and outcomes. It is very beneficial in all types of
businesses, so it plays an important role in a firm. A firm's ethical person is standard in cases of
directing and also accomplishes by having to process human relationships between both the
governance and individuals. It is viewed as a combination of both the real motivation ruler and a
person by the ethical or ethical individual. Trust, loyalty, strategic planning and many other
characteristics characterise the ethical individual. In order to achieve the organizations
objectives, complete implementation a variety of techniques that encompass the connection of
values and beliefs.

According to the two ethical leader principles, every leader must have correct unity, which
includes three properties: seriousness to the right regulations, totality and loyalty(Agudelo,
Johannsdottir and Davidsdottir, 2020). In the case of managing the ethical administration
conformation for the firm, it is advantageous to command and maintain ethical firm
corroboration for all firms as it is advantageous to realise the benefits and drawbacks with the
objective of generating firm ethical boundaries. In order to achieve the goals and outcomes of the
firm's wrong environment, the administration must prioritise managing the total agreement and
wholeness through various steps that include observation and effective actions for the proper
legal legislation with every motion of actions and competence standardised needs to be modified
with message elaborated definition and therapeutic interventions of resumption where the belief
and ethical real motivation could be questioned. With a long period of time of maximum
production inside the company, I have achieved my goal and also looked at various business
activities with wrong engagement in online individuals and groups at large.
In my previous firm, there are different tasks that take part in the sick of employees. The
firm ends up focusing on increasing net earnings while exceeding their business owners, which is
completely incorrect. It also aids to the overall improvement in the earnings of business
organisation and act as higher profitability activities performed by the management. Also there is
a focus on gathering responses in the process of understanding the company's necessities,
thoughts and prerequisites. In order to turn a profit from their absolute confidence, also there is a
necessity to prioritise the implementation of new systems as well as make sure that I hire
absolute lowest employees and executives with ethical leadership who have been very ethical in
their interactions and also not artful, destructive for an efficient dominant and observation of the
overall attitude. I also need to emphasise how my personal values align with the ethical of the
company. Furthermore, attending all contests, classes, meetings, and other events will assist me
in raising the ethical of a company.

As discussed above it can be determined that leaders are essential towards maintaining
ethical nature of an organization by inspiring their coworkers to be on the most ethical behavior
and resolving any kind of conflicts through ethical decision-making. Leaders act as the inspiring
force driving employees and managers to make decisions on the basis of its ethical implication
for various stakeholders so that conflicts are resolved quickly and unethical business practices
are identified and eliminated (Brenkert, 2019). According to me an ethical leader is able to use
their position at the company for public good while also achieving business objectives. Believe
that my concern towards planet and people will help me improve my ethical practices and
become a more ethical leader.

REFERENCES
Books and Journals
Agudelo, M.A.L., Johannsdottir, L. and Davidsdottir, B., (2020). Drivers that motivate energy
companies to be responsible. A systematic literature review of Corporate Social
Responsibility in the energy sector. Journal of Cleaner Production, 247. p.119094.
Brenkert, G.G., (2019). Mind the gap! The challenges and limits of (Global) business
ethics. Journal of Business Ethics, 155(4). pp.917-930.
El-Bassiouny, N., Darrag, M. and Zahran, N., (2018). Corporate social responsibility (CSR)
communication patterns in an emerging market: An exploratory study. Journal of
Organizational Change Management.
Harrison, J.S., and et, al., (2019). The Cambridge handbook of stakeholder theory. Cambridge
University Press.
Haski-Leventhal, D., (2018). Strategic corporate social responsibility: Tools and theories for
responsible management. Sage.
Helm, S., Kim, S. H. and Van Riper, S., (2020). Navigating the ‘retail apocalypse’: A framework
of consumer evaluations of the new retail landscape. Journal of Retailing and Consumer
Services, 54. p.101683.
Hosta, M. and Zabkar, V., (2021). Antecedents of environmentally and socially responsible
sustainable consumer behavior. Journal of Business Ethics, 171(2). pp.273-293.
Lin, Y. C., Padliansyah, R. and Lin, T. C., (2019). The relationship and development trend of
corporate social responsibility (CSR) literature: Utilizing bibliographic coupling
analysis and social network analysis. Management Decision.
Manyukhina, Y., (2018). Ethical Consumption: Practices and Identities: a Realist Approach.
Routledge.
Prado, A.M., and et, al., (2020). Simulations versus case studies: Effectively teaching the
premises of sustainable development in the classroom. Journal of Business
Ethics, 161(2). pp.303-327.
Rendtorff, J.D., 2019. Philosophy of management and sustainability: Rethinking business ethics
and social responsibility in sustainable development. Emerald Group Publishing.
Tsai, H.J. and Wu, Y., (2022). Changes in corporate social responsibility and stock
performance. Journal of Business Ethics, 178(3). pp.735-755.
Vallaster, C., and et, al., (2018). Responsible entrepreneurship: Outlining the
contingencies. International Journal of Entrepreneurial Behavior & Research.
Ye, N., and et, al., (2020). A bibliometric analysis of corporate social responsibility in
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Online
Kharpal, A. (2022) ‘Amazon investigated by UK antitrust watchdog over its marketplace
practices’ CNBC, 6 July. Available at: https://www.cnbc.com/2022/07/06/amazon-
investigated-by-uk-watchdog-over-its-marketplace-practices.html
Global Data (2022). Ocado Group Plc: Overview. Available at:
https://www.globaldata.com/company-profile/Ocado-Group-Plc/#:~:text=Ocado
%20Group%20Plc%20(Ocado)%20is,and%20home%20care%20and%20cleaning.