Business Ethics and Responsible Management

This report discusses the ethical issues surrounding loot boxes in the gaming industry and the role of business ethics and responsible management. It explores the impact of loot boxes on society and the application of ethical theories. The report also highlights the importance of transparency and ethical practices in business operations.

Business Ethics and
Responsible
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
(a). Outlining the ethical issue involved in having loot boxes as part of business model and
exploration of its supportive factors.......................................................................................3
(b). Application of two ethical theories for getting the view on aspect of ethics of the case.8
PART 2............................................................................................................................................9
Reflective Practice on topic of ethical leader.........................................................................9
REFERENCES..............................................................................................................................12

INTRODUCTION
Business ethics refers to the study of appropriate practices and policies of business about
the potentially controversial subjects such as insider trading, corporate governance, corporate
social responsibility, bribery, fiduciary responsibilities and discrimination. Responsible
management refers to the deliberate management of an organisation's impact on society. This
will help an organisation by designing business activities and process in a way that directly meet
certain environmental and social minimum standards (Dierksmeier, 2011). Therefore, business
ethics and responsible management are essential issues for organisations to consider when
making decisions. Responsible management is the concept that companies have responsibility to
environment and the society and emphasis on performing what is the essential for well-being of
entire society. For this report, EA Games is the chosen study that built different types of games
which are Fifa, whales and Loot boxes. This report divided into different parts that includes
information about the ethical issues, role of business in society, stakeholders, development of
effective theories apart from their application and reflective statement. All these are main parts
that will support in completion of this report systematically and effectively.
PART 1
(a). Outlining the ethical issue involved in having loot boxes as part of business model and
exploration of its supportive factors
There is involvement of large number practices within an organization for the purpose of
developing business. It is necessary to determine that these practices are ethical or not and how it
has end impact over society. In this regard, organisational management and government both
needed to focus over analysing business functional practices. Here, the role of government is
intense because they have an obligation to safeguard society from any kind of negative impacts.
This would be the reason many legislations exist that regulated business activities. Now, this
brings an obligation over an organisation that adhere these otherwise have to face the negative
consequences (El Garah and et.al., 2012).
The same is happened in case of EA Games: Loot boxes. Here, an organisation provided
the game free of cost that attracts large number of individuals specially children's. Further, to
earn money they adopted the approach about paid purchase of boxes that will contains something
special and help in improvement of gaming feature. This persuades the behaviour of many

individuals including children's that buy such boxes and improve their gaming skills and get into
the next level. The drawback associated with this option that buyers has no knowledge regarding
the aspects which they will get in future from the purchase of boxes. This brings an issue among
the parents of gamers that it is gambling where nothing is known to their children's and they
spend money on point of getting something better. This makes their behaviour addictive towards
game and stimulates them to purchase box again and gain on the point of getting something
valuable. This help an organisation to make money but on other side having impact over the
parents wealth and behaviour of children's. This was the reason that it comes in media and notice
of government (Hibbert and Cunliffe, 2015). Here, the CEO of an organisation represent MP's
that why the business model is not unethical in nature. Further detailed presentation on ethics is
point is provided below;
This above stated feature of game regarding Loot boxes is unethical in nature because no
information is provided to purchasers that what they will get from the purchase of box. This is
kind of gambling where people invest money on the point of getting something better. The same
is in the game where option of box purchase will help them to get something better but they
actually do not having any knowledge that what they will get in future. The main ethical issue
attached with same is non dissemination of information about aspects that will be getting from
the purchase of box even after the whole game is provided free of cost. This promotes the
gambling behaviour among individuals where they will get addicted to such activities. The
different number ethical factors associated with above defined business model are explored
below;
No information about considerations: No information is provided in the Loot boxes
that what will be getting by purchaser from the purchase of box. So, in case if not getting the one
which they wanted leads the loss of money. This simultaneously motivates them to further
purchase another box so able to get favourable kind of choices (Weiss, 2014).
Free of cost game: In actual game is provided free of cost to individuals so any further
option inside the game about the purchase of skill is not relevant in nature. This is misleading in
nature because once they develop interest and wants to play more, then needed to buy extra skills
because without them unable to play on some specific level. Also, adding of the feature as
attached in the current one about Loot boxes where nothing is provided regarding purchase will
get from the purchase in future is totally unethical in nature.

Stimulating gambling behaviour: The activity of purchasing loot boxes in game is
persuading the behaviour of purchasers because they have belief that will get something better in
next. This develops gambling behaviour where they start investing in money in similar activities.
So, any activity that promotes bad habit among society individuals is totally unethical in nature
and needed to be withdraw from same effect (Zhang and et.al., 2015).
Along with this, there are several ways through which respective company may think
about the role of business in the society in effective manner such as they are conducting
unethical practices as they promote their game that it is free but when a person want to add more
feature or upgrade their character in the game they need to pay. Due to this, addicted children are
using their parent’s credit and debits card for paying for new features without consulting to the
parents. In respect of this parents file complain on the company that they are not thinking about
the society and due to which they are facing unexpected expenses. The Loot box need to think
about the role of business in society which is related to providing quality and effective products
and services to the society in the ethical manner. It is also considered as the role of respective
company that they must develop proper policy as well as guidelines so that people or audiences
can read the policies in effective manner. Along with this, it is company social responsibility that
their business must be profitable to themselves but for that they not need to adopt any unethical
practices.
There are several stakeholders of a company which impact on a company inside or
outside. Stakeholders are considered as people or group of people who impact or get impacted
through the company business operations as well as practices (Freeman and Laasch, 2020). It is
necessary for every company to involve stakeholder in the decision making process so that they
make decision properly and effective for gaining succession at the marketplace. In respect of
Loot box they also have several internal as well as external stakeholder which are related to the
company operations, from which some are mentioned below:-
STAKEHOLDERS Internal/
external
Impact Influence How stakeholders will be affected
1. Loot Box Internal high high  Unethical practices directly
impact on the company
reputation and brand image.

 Due to unethical practice sales
get impacted and profitability
too.
 Decrease in customers trust and
customer’s base.
2. Employees Internal medium medium  Employees trust toward the
company gets impacted
negatively.
 Due to this Loot box may also
lose their valuable employees
are agents the illegal activities.
3. Customers External high high  Due to this respective company
will lose their potential
customers because they feel
cheated as well as mislead due
to illegal activities.
 Due to misleading information
or get getting proper
information people are wasting
their money which leads to
unexpected loss (McCarthy and
Mena, 2020).
4. Suppliers External high high  The unethical practices may
leads to decrease in numbers of
suppliers as they feel cheated
due to in-transparent
information.
 The goodwill of the suppliers of
respective company get
decreased as they sell game

which don’t have proper
information.
5. Government and
Regulation bodies
External high medium  Due to this government rules,
regulations and guideline get
hampered as Loot box not
follow proper guidelines (Padan
and Nguyen, 2020).
 Government and regulation
bodies need to take strict action
against the Loot box as they
conduct misleading and
unethical practices.
6. Management
bodies
Internal medium Low  Due to illegal activities
respective company’s
management bodies need to
develop new policies and ensure
now that are followed strictly.
 Management bodies also need
to design strategies and plan
through which they can regain
customer, employees and
suppliers trusts properly and
effectively.
There are several competitors of respective company from whom Loot Box need to learn some
things which can be their ethical business operation or illegal operation outcome. This will help
them in developing proper strategies as well as plan which improve respective company business
operations and functions successfully at potential marketplace (Pirson, 2020). The competitor
Stadium comics conduct all ethical practices as well as they always clear about their products
and services. In addition to this respective company also mention all the cost as well as addition
cost with their products and services so that customers take decision accordingly. By these types

of strategies respective company able to make as well as maintain proper goodwill at the
potential marketplace (Pirson, 2020). On the other hand, Nerdblock which is another competitor
of Loot box conduct same type of illegal activities due to which they get band for the some
which directly impact on the respective company sales, profit margin and goodwill. Along with
this, due to these types of practices they also lose their potential customer’s based which is
considered as huge loss for the company. So it is essential for Loot box to conduct their business
operations as well as practices in ethical and proper way so that they can avoid legal issues
because that will directly impact on the company market goodwill.
In respect of this there are some of recommendations for the respective company so that
they will conduct their business in effective as well as ethical manner. In respect of this, Loot
Box must develop as well as create transparency among the employees, customers, suppliers and
other stakeholder. This is so because through that respective company able to conduct business
operation properly which help in avoiding legal issues. By maintaining transparency respective
company also able to develop their high goodwill as well as market value successfully which
leads to increase in sales and profit too (Price, Gherardi and Manidis, 2020). Along with this,
respective company must also conduct CSR (Corporate social responsibilities) activities because
through that will help in developing as well as maintaining market goodwill in effective way.
This will also aid in enhancing market presence which also leads to attracting more customers,
suppliers, investors and other stakeholders successfully.
(b). Application of two ethical theories for getting the view on aspect of ethics of the case
A loot box has launched game which was free at some level but after that children require
to spend money on it for playing further. This, result in reducing money from bank account of
parents which create unethical practices and fraud. There are two major ethical theories which
Loot Boxes can implement within their working for gaining better outcomes. Explanation of
these are as follows :-
Rights ethical theory – In moral hypotheses dependent on rights, the rights built up by a general
public are ensured and given the most elevated need. Rights are viewed as morally right and
legitimate since a enormous populace supports them. People may likewise present rights to
other people on the off chance that they have the capacity and assets to do as such. A
significant entanglement of this hypothesis for a bigger scope is that one must unravel what
the qualities of a privilege are in a general public. The general public needs to figure out

what rights it needs to maintain and provide for its residents. All together for a general
public to figure out what rights it needs to authorize, it must choose what the general public's
objectives and moral needs are (Schoeneborn, Trittin-Ulbrich and Cooren, 2020).
Subsequently, in request for the rights hypothesis to be valuable, it must be utilized related
to another moral hypothesis that will reliably clarify the objectives of the general public.
Virtue ethical theory - The prudence moral hypothesis passes judgment on an individual by
his/her character as opposed to by an activity that may go amiss from his/her ordinary
conduct. It takes the individual's ethics, notoriety, furthermore, inspiration into account
when rating a strange and unpredictable conduct that is viewed as dishonest. For example, if
an individual counterfeited an entry that was later identified by a friend, the companion who
realizes the individual well will comprehend the individual's character and will judge the
companion in like manner. On the off chance that the plagiarizer typically adheres to the
principles and has great remaining among his partners, the friend who experiences the
copied entry might be ready to pass judgment on his companion all the more permissively.
Maybe the scientist had a late night and essentially neglected to credit their source properly.
Then again, an individual who has a notoriety for scholastic unfortunate behavior is bound
to be judged brutally for copying in light of his/her steady past of dishonest conduct
(Sekerka, 2020). One shortcoming of prudence moral hypothesis is that it doesn't think about
an individual's change in moral character.
These are the main two ethical theories which Loot box must adopt in order to conduct
their business operations and practices in the ethical manner. This is so because that will help in
enhancing their market value and profit ratio by attracting more and more customers
successfully.
PART 2
Reflective Practice on topic of ethical leader
Ethical leader is considered as a moral person as well as moral manager at the similar time which
is also determined as the two main pillars which a manager to conduct as well as control
functions in effective manner for the attainment of desire goal and objective. In respect of Loot
box they need to hire an ethical leader who will develop strategies and guidelines which help in

conducting ethical practices successfully. In order to being a ethical individual it is essential to
have ethical leadership as that will help in building or developing successful ethical leader
(Zhang and et.al., 2015). This will also aid in building reputation which have specific behaviour,
traits and abilities to take decision that based on the moral of principles and authenticity. An
ethical leader need to have traits like honest, consistency nature, trustworthy, credibility and
predictability for managing relation with the other people inside as well as outside organization.
In addition to this behaviour will include right things, positive attitude, concern about the others,
treat other well, communicate properly and many more. Through this type of behaviour
employees as well as customers both feel comfortable which enhance their retention duration.
Moreover, decision making is considered as one the essential aspects as that will help a company
in attaining desire goal as well as objectives in effective manner with fair and ethical practices by
understanding community and society requirement. In order to complete the image of an ethical
leadership it is essential to link traits and behaviour of moral individual as that will encourage a
working in effective manner. Due to this, it is determined that moral manager accomplish the
image of ethical leadership as they increase the standing of ethical activities as well as it values it
in different aspects such as becoming a role model by conducting visible action, communicate
about ethical aspects and many more. Ethical leadership also encourage to the job satisfaction,
behavioural outcome, and commitment of staffs, firm performance and many more. This is so
because according to this employees treated equally as well as it also leads to transparency
among customers and company.
Furthermore, at an organization there are situation take place which is related to
destructive behaviour which include development of unethical leadership. There are generally
several types of bad leaders which leads to unethical as well as ineffective issues at the
workplace such as incompetent leader, it is considered as leader who describe didn’t have
emotion and motivation for accomplishing ant work (Weiss, 2014). Next is rigid leader who are
not open for ant types of new idea or change at workplace as well as after that callous leader who
are generally ignore need to employees. Then next is corrupt leader who cheat and lie as well as
they are unfair at the workplace and many more. In order to avoid all these types of ethical issues
an organization need to conduct several practices which help maintaining ethical aspects at the
workplace such as develop proper rules and regulations at workplace, conduct CSR activities,
maintain transparency and many more. By conducting whole analysis I able to determined that at

the workplace it is essential to conduct ethical practices otherwise it will directly impact on their
business negatively as well as that will lead to conducting work properly. In addition to this it is
also important to develop and maintain strong relationship among the moral person and a moral
manager as that will help in avoiding illegal activities at workplace. Along with this, I also get to
know that a person need to have proper ethical trait, behaviour, roles and values as that will help
in conducting work in proper and ethical way.

REFERENCES
Books and Journals
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