Business Ethics and Responsible Management: A Case Study of Ocado

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.