Business Ethics Report: Analysis of 7-Eleven's Ethical Dilemma

This report examines the ethical dilemma faced by 7-Eleven in Australia, focusing on breaches of regulations related to wage exploitation and working conditions, particularly affecting international student workers. The report investigates the nature of the dilemma, tracing it back to leadership issues and franchisee misconduct. It analyzes the key stakeholders impacted, including employees, customers, and partners, and discusses how the company's actions were unethical. The analysis incorporates ethical theories to assess the severity of the ethical violations. The report evaluates the effectiveness of the resolution process and considers the implications of the dilemma on ethical standards within Australia. Finally, it suggests measures for resolving the dilemma, including developing ethical policies, monitoring franchisee operations, and creating channels for employee feedback to prevent future ethical lapses. The findings highlight the need for robust ethical leadership and accountability within the company and its franchise network to protect vulnerable workers and maintain ethical business practices.

Running head: BUSINESS ETHICS
BUSINESS ETHICS
Name of the Student
Name of the University
Author Note

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The dilemma that is breaching regulations
7-Eleven which has been the renowned store in Australia is found to be facing the ethical
dilemma due to the problems of leadership. Taking regulations then it has been found that the
leadership problem is breaching the regulations that need to be looked at. Most of the workers
have been found to be not paid and that they are forced by the authorities to work for the longest
hour than usual. As opined by Alshammari, Almutairi, and Thuwaini (2015), if the workers are
given extra hours to work without the accurate payment then it really breaches the regulations.
In this case, it has been found that most of the workers are students who have
international visas. According to the terms and conditions of the visa it has been regulated that
students will work only for 20 hours in the store and that they will not be allowed to work more
than the hours that are provided to them. Most of the students are found to be appointed in the 7-
eleven stores by the franchisee and that these franchisees make them work more than 20 hours
which is against the ethical standards (Berg and Farbenblum, 2017).
This entire case is found to be lacking the leadership styles that have been of need. A
leader needs to be looked at these issues and that if any problem is found to be complained by
the employees then necessary steps need to be taken in an according to manner. According to
Carsten and Uhl-Bien (2013), most of the leaders found not to look at the issues that employees
and other staff are complaining of. Most of the students, in this case, has been found to be given
a threat by the franchisee owners.
This dilemma is found to breach the regulations as the franchisees are making a profit
without giving the wages that are required by a worker. Another thing that has come out from the
investigation is that most of the students are forced to work more than the estimated time and

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that these dilemmas are not been looked out by any of the leaders. According to Hardy (2016), a
leader needs to look at these issues and that if anything found to be wrong then that leader needs
to take necessary steps to get rid of the matter at the earliest.
The head office of the stores does not want to make any kind of comments regarding the
issues that have come out after the investigation. The head office only makes a comment that
some of the franchisee stores only breach the legal issues and that the company has nothing to do
with it. As opined by Hardy (2017), when a company is giving franchisee then it is the sole
responsibility of the company to look into the ethical issues and the way work has been carried
out in the franchisee. The head office does not look into the matter seriously.
Stakeholders getting affected
Employees, in this case, has been found to be the greatest stakeholder who has been
affected in a great manner in this case. Most of the employees, in this case, are found to be
international students and that they are greatly affected by the way they are treated by the
franchisee. According to Hoyt and Price (2015), if the employees of a company or business are
not getting the support that has been of their requirement then it may affect the business at large
in near future. These students as employees of the store are found to work more than 20 hours
which is breaking the legal issues of the visas.
Another stakeholder who will be getting affected by this scandal is that of the customer.
Customers will always look for those stores or those industries that are free from scam and that
looks for the care of the customer. In this scam, it has been found that the franchisees who are
marginal do not look into the problems of the employees and that makes it a point among the

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customer of whether their problem will be heard by the company in the future or not (Kuntz et
al. 2013).
Another stakeholder that will be getting affected by this scam is the partners who are
associated with the business. In most of the cases, it has been found that most of the partners will
not be able to do the business that they had with 7-eleven. A business if found to be not working
in an ethical way then most of the partners associated with a business will not be able to do the
business according to the way. According to Langlois et al. (2014), a business when found to be
having a problem in an ethical manner then that business needs to resolve the matter at the
earliest.
This case is so worse that most of the stakeholders of the company have refused to work
with it as they do not think that legal issues will be breached in such a manner. In this case, it has
been found that with the passage of time the condition has got worst and that most of the
employees obey the threatening of the franchises as they are helpless to do something legally
especially when the question raises the validity of the visa. Most of the customers are found to
look for other stores where they get the same thing as that of 7-Eleven.
Suppliers are also an integral stakeholder of the company and in the case, it has been
found that the relationship of the suppliers has come to halt. As opined by Levine and Boaks
(2014), a company needs to follow ethical rules in such a way that it does not have to face
questions from the other people or the stakeholders who are associated with the company. 7-
Eleven found to break all the rules and regulations and that they are not been appreciated or any
of the stakeholders is going to have any kind of relationship with them.

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In most of the cases of Australia, it has been found that Human Rights are associated
directly with the company or of the industry business has been associated with. In this case, it
has been found that most of the workings of underpayment and working for an extensive shift are
done in such a manner that human rights do not have the clue to get into the issues. When the
scam has been unearthed it has been found that the problem is getting worse and that most of the
students do not want to talk about the issue as they are threatened by the issues of visa. This case
needs to be looked at by the head office and when such a problem is realized by them then
necessary steps need to be taken which the company has been found not to take.
Resolving the dilemma
7-Eleven after the scandal has developed the ways through the dilemmas of ethics can be
maintained an in future it can be controlled. The company is looking for developing ethical
policies which should be looked after by all the franchises and made sure that they do not breach
the legal issues. The management will look for the ways in which the compensation of the
students can be made and made sure that they will look for only the franchisees which will not
make any kind of problems that ethically hampers the company (O'Brien and Boersma, 2016).
In this case, particularly it has been found that the dilemma has not been resolved in an
effective manner. The company needs to take legal steps against the franchise holders who have
done this kind of illegal practice. Most of the students are found to be international one and after
they graduated from the universities they will not provide any kind of positive remark regarding
the company. As opined by Schwartz (2013), the company needs to take ethical steps regarding
the franchises that have done this kind of practice. Providing only the compensation, in this case,
will not make any kind of ethical issue practices. These case needs to be taken into consideration.

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In order to develop the code of conduct so that the company remains safe from the ethical
dilemmas in the future, the development of the conduct must ensure that the company will
terminate an agreement immediately if found these practices are happening. As opined by
Shepherd and Heard (2017), a model of auditing needs to develop that will look about the
responsibilities that the franchisees are following in the right manner or is not. This model also
looks at the operations of the head office and made recommendations according to that. All the
employees will be given the right to talk to the head office when in problem and when students
are taken as employees then that student needs to be treated according to the rules and
regulations that are provided while taking the visa for doing further education from the renowned
universities (Stahl and Sully de Luque, 2014).
The process of recruitment needs to be monitored by the head office and that the head
office must ensure the time and the wages that the employee will get and that the franchisees will
obey this accordingly. The company must make sure that they will visit the store and make sure
that they look into the working condition of the employees and made regulations based on that.
The head office must make it a point that they will develop a forum for the employees and that
all the employees must get the opportunity to tell of the problems that they are facing. There
must not be any kind of unions to operate in the stores that are provided as of franchisees and
that the head office must look into the matter before it is getting too late (Fairwork.gov.au,
2019).

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