Business Ethics and Responsible Management

This document discusses the ethical issue of gender pay gap and its impact on stakeholders. It explores the role of business in society and provides recommendations for creating an ethical organization. The document also applies two ethical theories, Utilitarianism and Rawls's theory of justice, to the case study.

BUSINESS ETHICS AND
RESPONSIBLE
MANAGEMENT

TABLE OF CONTENTS
PART 1............................................................................................................................................1
Introduction, nature of the ethical issue and the role of business in society...............................1
Identification of key stakeholders and the impact on them and examples of how ethical choices
have dis/benefited other businesses.............................................................................................1
Recommendations for Company emerging from analysis...........................................................3
Applying two ethical theories to the case study..........................................................................4
PART 2............................................................................................................................................6
Qualities recognised for ethical leadership and the creation of an ethical organisation..............6
REREFENCES................................................................................................................................8

PART 1
Introduction, nature of the ethical issue and the role of business in society
Gender pay gap is a kind of gap in which average difference between remuneration for
men and women who are working is high. It is one of the biggest ethical issue in which women
are generally paid less as compared to men. According to a survey conducted by gender pay gap
service of UK it was recorded that gender pay gap in UK is approximately 17.3%. This figure
clearly explains that women are paid 83p for every £1 which is paid to men (Hargrave and et. al.,
2020). In one way of the other, this pay difference is present in organization. Even in
organizations like Bank of England Gender pay gap is present whether it is in terms of salary,
quartile or in other terms. There are various factors because of which this difference in
organizations is increasing. There is no doubt that this gender pay gap within organizations is
reducing but still in one way or other it still exists within organizations. Business organizations
plays a vital role in society as they are the one who helps in shaping new norms of society in a
proper and appropriate manner. they also help in bringing change within perception of society in
terms of gender equality. But this existing gender pay gap issue is working as a barrier in
chancing perception of people in society. Gender pay gap is one of those ethical issue because of
which men in society thinks that they are superior from women as this gap exist in many large
organizations.
Identification of key stakeholders and the impact on them and examples of how ethical choices
have dis/benefited other businesses
Gender pay gap is one of the major concerns which is increasing continuously within
society. It is one of the main barriers for women in terms of career opportunities for them. Even
in large organizations like Bank of England this gap exist if not in terms of salary then in terns of
incremental bonus or in terms of quartile but it does exist. It is important for organization to
focus upon this issue from an ethical perspective of ethics (Wiedman, 2019). This is majorly
because it deals with fundamental issue of fairness for both men and women. Even if both men
and women do the same job or are on same post there is a difference between their payment. It is
completely unfair that men and women are paid differently for same work and for same
designation. If workload upon men and women is different or they have unequal jobs and then
they are paid differently then it is fair. It is a point of concern because this gender pay gap
practise of organizations affects perception, thinking and mentality of society is also impacted
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and due to this unfairness towards women is increasing. Due to this it has become important for
organizations to focus upon gender pay gap from an ethical perspective of ethics.
This issue is not only bas for changing perceptive of society but it can also impact or
influence public image of the company in a negative manner. it is one of those ethical issue that
can impact morale and trust of employees. Due to this issue perception of employees towards the
job and company can change (Gupta, Mortal and Guo, 2018). Due to this issue workplace
environment of the organization as well as brand image can be impacted drastically. Today this
issue is being focused drastically and many countries are focusing upon eliminating this issue.
Despite of these efforts if an organization have gender pay gap then it can impact their overall
brand reputation in a negative manner. Due to this gender pay gap business of organizations can
also get impacted drastically. If women are paid less then it can directly impact their
performance as it can develop a feeling of unfairness among women due to which their overall
performance can get impacted. Business has many other roles within the society. Most of the
organizations only sees business from profit perspective. But due to this overall business of the
organization is getting impacted in both positive and negative manner in many other ways such
as employee retention rate of the organization cab reduce and employee turnover rate can be
decreased. It can directly impact brand identity due to which inequality within workplace can
increase.
There are many stakeholders who gets impacted due to gender pay gap within a large
organization like Bank of England in different ways. Mostly internal stakeholders of the
company like Employees, organization, investors. Employees are the one gets affected by gender
pay gap ethical issue the most. Most of the women working gets demotivated or demoralized due
to this pay gap (Miller and Vagins, 2018). Many times, due to this ethical issue women
employees switch to other organization where they think that there is more gender equality
where they are paid equally as compared to men. For example, in Bank of England median
hourly wages of women 75p for every £1 that men earn (Gender pay gap, 2020). This can
negatively impact women employee’s morale and thinking. In in top job reviewing applications
or website this pay gap can be clearly observed due to which employees’ performance and their
trust within organization is impacted. Investor are another kind of stakeholders who are impacted
because of this gender pay gap ethical issue indirectly. When employees feel that they are being
paid unequally their performance is impacted, they not feel motivated and do not engage more
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within their work due to which overall performance of the organization is impacted. As a result,
investors will be required to invest more within the organization and might be possible that their
financial return is reduced. In Bank of England increment bonus paid to women is also unequal
and mean hourly working wages of women is approximately 21.1% less as compared to men
(Gender pay gap, 2020). Employer is another stakeholder who is indirectly impacted due to this
ethical issue because if this issue exists within an organization then employee turnover rate of the
organization can increase due to which indirectly employer of the organization is impacted. They
need to focus more upon retaining their current employee and hire new employees for vacant
positions. It can be said that gender pay gap is one of the biggest ethical issue that not only has a
negative impact upon the organization but also has negative impact upon society, perception,
thinking and mentality of people. Due to this it becomes important for organizations to focus
upon taking measures so that they can eliminate this ethical issue from the organization and its
negative impact upon other stakeholders of the organization can also be reduced.
Recommendations for Company emerging from analysis
There are various kinds of recommended ways though which an organization can become
an ethical and responsible company. There are many best practical approaches that can be
adopted by organization for reducing or eliminating gender pay gap within their organization and
gender pay equality can be increased. Some of the ways are as follows:
 For way is by increasing transparency within the organization. This can be done by reporting
every year upon workforce composition and gender wage pay performance (Warner and
Lehmann, 2019). This transparency will help the organization to reduce changes of gender
payment inequality and will help in enhancing motivation and morale of all the employees.
 Instead of focusing upon salary history a pay range for a particular job role should be decided
and during the interview pre-decided pay range should be explained to the candidate and on
the basis of this pay range salary should be decided. This will help in reducing gender pay
gap within the organization.
 Targets and deadlines for employees can be set as per the targets bonus or incentives can be
provided. This will help the organization reduce changes of unequal pay or gender pay gap
and will help the organization in enhancing gender pay equality within the company.
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Applying two ethical theories to the case study
Ethics is a branch of philosophy that deals with standards of right and wrong, and
principles of morality. Ethics is one of the most important things which is required to be focused
upon within an organization (da Silva and Dobránszki, 2019). There are various kinds of ethical
issues that can occur within an organization. Gender pay gap is one of the major and serious
ethical issue which is found within many organizations. there are various kinds of ethical
theories that can be used to explain Gender pay gap ethical issue. Each of these theories helps in
explaining its own point of view but simultaneously each of these theories have their own
drawbacks as well. Two theories that can be used to explain Gender pay gap issue are: Utilitarian
theory and Rawls’s theory of justice.
Utilitarian theory:
Utilitarian is an ethical theory that can be used to identify right and wrong by focusing
upon outcome. This theory can be used to explain and determine whether gender pay gap is an
ethical dilemma or not. Utilitarianism explains that gender pay gap is definitely an ethical issue
as it has both long- term and short- term negative consequences and it not only impacts
employees but also impacts society as whole (Miller and Vagins, 2018). This theory examples
that gender pay gap is an action of organization or of employers that can impact happiness and
satisfaction of employees which can further result in disloyalty for organization among
employees. It is one of the most common theory that can be applied within an organization for
understanding accountability of right and wrong on the basis of cost and other kinds of benefits.
This theory says that freedom, pressure and happiness from pain are only desirable results of any
action and are considered as valid or ethical. As per this theory, Gender pay gap is a kind of
action that causes more pain to women employees as compared to pleasure (da Silva and
Dobránszki, 2019). This theory further says that due to gender pay gap not only happiness of
women is impacted but thinking or mentality of society about men and women, their rights is
also impacted directly. This is because business plays a vital role in impacting perspective of
society. According to Utilitarianism theory of ethics can be defined as ethical dilemma or issue
only be its consequences i.e. it has negative consequence then it is definitely an ethical issue but
its consequences are positive then it is not. Utilitarianism can be differentiated into two
categories: Act Utilitarianism and Rule Utilitarianism (Alford, 2016). Act Utilitarianism helps in
determining whether an act is unethical if there is requirement to look at consequences of
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specific task. Whereas rule Utilitarianism focuses upon bigger picture in order to check whether
an action is desirable or not. So, this theory can be used to check whether gender pay gap is an
ethical issue or not consequences of this can be analysed. If gender pay gap is present within an
organization it can increase employee turnover, decrease morality and satisfaction of employee.
So, it can come under Act Utilitarianism theory (Chully, 2017). This can result in not only losing
valuable employees but it can impact overall reputation of the organization as well. However,
this theory cannot be solely used for exampling whether gender pay gap is an ethical issue or not
because this theory creates an unrealistic perspective of society.
Rawls’s theory of justice:
Rawls’s theory of justice is another ethical theory that can be used for exampling that
whether gender pay gap is an ethical issue or not. This theory explains that every citizen of this
society holds equal basic rights and should be treated with fairness (Russell, 2018). As per this
theory justice is provided to every citizen and equal distribution of fair rights of citizen of society
should be distributed in terms of wealth, income, opportunities to obtain certain position or
designation, self- respect and many more (da Silva and Dobránszki, 2019). This theory explains
that gender pay gap is a kind of social injustice for women that can negatively influence the
women's opportunities to secure desirable positions within an organization. Gender pay gap
create unfair treatment for women and because of this gap their basic rights within the society or
organizations is compromised. Not only this due to this inequality in gender pay can degrade
opportunities for women to grow or move forward in their career (van den Boogaard, 2019). This
theory also explains that there are large number of inequalities present within men and women in
the society and gender pay gap within organizations give rise to these present inequalities. Due to
this, perception of society towards women and rights of women is changes or altered in a
negative manner. So, it can be said that gender pay gap is definitely an ethical issue. This theory
also explains that it is important to reduce gender pay gap within organizations because it is one
of the major forms of injustice for women and this can create unfair background or conditions for
women. Many times, due to this ethical issue, unfair norms for women can be created and
because of which social injustice for women can increase (Norheim, 2016). In order to reduce
this ethical issue within organization women on same designation or doing same work must be
paid equally as men so that perception or thinking of society towards women can be changed and
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basic rights of women can be provided to them. This will also increase opportunity for women to
gain a certain position within society as well as within organization.
PART 2
Qualities recognised for ethical leadership and the creation of an ethical organisation
Ethical leadership is a kind of leadership is a kind of leadership style in which leaders can
adopt any suitable leadership style that can benefit the organization. Ethical leaders are the one
who knows things that are right to be done for benefit of both organization and other
stakeholders of the company. According to me an ethical leader has various kinds of qualities
that helps them in running a business successfully. Some of the main qualities are:
Justice: I think that an ethical leader is always fair with others and treats everyone equally. They
do not give bias treatment to their employees (Jensen, Cole and Rubin, 2019).
Respect others: One of the most important quality of an ethical leader is that they respect each
and everyone. They listen to each and every one, respect contribution of every individual and is
always open to viewpoint of others.
Honesty: An ethical leader is always loyal and honest to their followers. Honesty and loyalty of
ethical leaders helps their followers to trust their leaders and remain loyal to them.
Humane: I think one of the most valuable quality of an ethical leaders is being human i.e. they
are kind and act in a certain way which is beneficial for their team members or followers.
Focus upon team building: They are the one who helps in increasing team sprit within team
members, this helps them to motivate their employees so that they can work together and achieve
desired goals and objectives (Pasricha and Rao, 2018).
Value driven decision making: An ethical leader focuses upon ensuing that all the decision
making is done by considering organizational values in a proper manner.
Encourage initiatives: They also encourage employees so that they take initiatives, thrive and
flourish themselves, come up with innovative ideas that can be used for achieving desired goals
and objectives.
According to my point of view there is a strong relationship between ethical leaders and
managers. Ethical leaders focus upon encouraging their employees, increasing trust within
themselves and take risk to achieve desired goals and objective (Pasricha and Rao, 2018). This
helps the ethical manager to control and manage their employees so that their work can be
enhanced and desired goals can be achieved. Ethical leaders focus upon decision making by
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considering all the organizational values including employees and ethical managers make sure
that decisions are followed in a timely manner. Ethical managers play a vital role in management
of business. They are the one who are responsible in promoting ethics within an organization. As
an ethical manager I will focus upon providing training and development activities to the
employees so that they can develop required skills and knowledge and enhance their overall
performance. I will also try to fulfil main interest of all the stakeholders such as employees’ main
interest is pay or bonus provided to them for their work. They will focus upon developing a
reward system such that performance of all the employees is equally valued and rewarded this
will not only help me in fulfilling main interest of employees but will also help in motivating
them so that they can focus upon achieving desired target and aim and objectives in a proper and
appropriate manner. I as an ethical manager will also focus upon appreciating hard work of
employees despite of the fact that they did not achieve their target and will focus upon
motivating them so that they can bring improvement within themselves. As an ethical
management I will also try to manage ethical standard of the organization. I will work upon
developing appropriate ethical code and guidelines and will also provide orientation or training
to the employees so that they can understand important ethical code or guidelines that are
required to be abide or followed by them. I will also focus upon interacting with both internal
and external stakeholders so that I can understand issues faced by them, unethical practises
carried out within an organization that required to be resolved in an appropriate manner. This
will help me in identifying changes that are required to be brought with ethical code of practise,
or guidelines so that unethical practises can be reduced. this will help me in maintaining a
positive environment within the organization.
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REREFENCES
Books and Journals
Alford, H.L., 2016. Gender bias in IT hiring practices: An ethical analysis.
Chully, A.A., 2017. Gender Differences in Ethical Sensitivity in the Indian Business
Context. Ushus Journal of Business Management. 16(3). pp.11-25.
da Silva, J.A.T. and Dobránszki, J., 2019. Gender Inequality or Gender Inversion? Gender
Comparison of Several Ethics and Research Integrity Groups, Ethics and Research
Integrity Journals, and Sex and Gender Journals. Archives of sexual behavior. 48(7).
pp.1893-1897.
Gupta, V.K., Mortal, S.C. and Guo, X., 2018. Revisiting the gender gap in CEO compensation:
Replication and extension of Hill, Upadhyay, and Beekun's (2015) work on CEO gender
pay gap. Strategic Management Journal. 39(7). pp.2036-2050.
Hargrave, T.J., and et. al., 2020. Making sense of changing ethical expectations: The role of
moral imagination. Business and Society Review. 125(2). pp.183-201.
Jensen, J.M., Cole, M.S. and Rubin, R.S., 2019. Predicting retail shrink from performance
pressure, ethical leader behavior, and store‐level incivility. Journal of Organizational
Behavior. 40(6). pp.723-739.
Miller, K. and Vagins, D.J., 2018. The simple truth about the gender pay gap. American
Association of University Women.
Norheim, O.F., 2016. Ethical priority setting for universal health coverage: challenges in
deciding upon fair distribution of health services. BMC medicine. 14(1). pp.1-4.
Pasricha, P. and Rao, M.K., 2018. The effect of ethical leadership on employee social innovation
tendency in social enterprises: Mediating role of perceived social capital. Creativity and
Innovation Management. 27(3). pp.270-280.
Russell, L.T.M., 2018. Ethical Issues of Small Business Owners: A Regional Perspective and a
Conceptual Framework. KnE Social Sciences, pp.93-99.
van den Boogaard, V., 2019. Gender and Positionality: Opportunities, Challenges, and Ethical
Dilemmas in Ghana and Sierra Leone. In Women Researching in Africa (pp. 257-275).
Palgrave Macmillan, Cham.
Warner, A.S. and Lehmann, L.S., 2019. Gender wage disparities in medicine: time to close the
gap. Journal of general internal medicine. 34(7). pp.1334-1336.
Wiedman, C., 2019. Rewarding Collaborative Research: Role Congruity Bias and the Gender
Pay Gap in Academe. Journal of Business Ethics, pp.1-15.
Online
Gender pay gap. 2020. [Online]. Available though: <
https://gender-pay-gap.service.gov.uk/Employer/LC3jMsgV/2018#:~:text=Hourly
%20wages%20pay%20gap,is%2021.2%25%20lower%20than%20men's. >
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