Financial Accounting Case Study: BBT Ethics and Decision Making

This case study analyzes the ethical issues surrounding Big Business Tobacco (BBT), an Australian tobacco company planning to expand into Asian markets. The assignment delves into ethical decision-making models, including the PLUS model, and explores ethical principles like autonomy, beneficence, nonmaleficence, and justice. The core conflict revolves around whether to include health warnings on cigarette packs, with the marketing manager prioritizing profits over public health concerns. The analysis identifies key stakeholders, including shareholders, consumers, and the broader community, and examines the ethical implications of BBT's decisions. The study emphasizes the violation of nonmaleficence and beneficence principles, the importance of considering long-term impacts, and the need for ethical responsibility towards all stakeholders.

Running head: FINANCIAL ACCOUNTING
Financial Accounting
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Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................3
Overview of Ethical Decision-Making Models...........................................................................3
Overview of the Ethical Principles..............................................................................................5
Major Stakeholders of the Business............................................................................................7
Main Ethical Issues in the Case...................................................................................................8
Option for Public Relation Manager............................................................................................8
Conclusion.......................................................................................................................................9
Reference.........................................................................................................................................9

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Introduction
The main purpose of this assessment is to analyze the business decision which is made by
Big Business Tobacco (BBT) which is considered to be on of the big companies which is mainly
operating in Australia. The case study shows that the management of Big Business Tobacco
(BBT) is planning to expand the scale of operations of the business and further enhance the
business in areas of Asia. The management of the company is of the opinion that there is lot of
potential for business in certain areas of China and some other developing countries in Asia. The
management of Big Business Tobacco (BBT) wants to launch that will be sold in packs of 40.
The assessment deals with the issues of ethics and also would be discussing various ethical
models which are available for discussion. The assessment deals with various ethical models
which are applicable on a business and also analyzes the decision which is taken by the
management in terms of ethical standards and regulations which are applicable.
Discussion
Overview of Ethical Decision-Making Models
Business Ethics can be described the rules and regulations which are followed by
individuals in business environment while carrying out the course of operations of the business.
The ethics in business are closely followed in order to ensure that the operations of the business
are within the law and regulations and no instances of misconduct in shown. In order to
effectively follow an ethical code, most of the businesses set their own rules and ethics in order
to ensure that there is smooth operation without any instances of misconduct. Ethical decision-
making models are closely followed by management of companies for ensuring that a level of
ethics is maintained in the business.

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In order to effectively apply ethical approach in the decision-making process, the
management of the company needs to carry out the following steps in order to ensure that
problem is identified effectively and on the basis of ethical violation, appropriate solution is
being devised by the management of the company.
 Take time to Define the Problem: The first step which the management need to
consider is to appropriately describe the problem which is faced by the business. In this
case, the problem is regarding whether to issue a statutory warning on the packets of
cigarettes even if the law does not make in mandatory. The marketing head is against the
idea of issuing a statutory warning along with packs of cigarettes and the managing
director of the company also supports such a notion (Ni and Van Wart 2015). However,
the public relation manager is of the opinion that the statutory warning should be
attached. Therefore, it is clear that there is a conflict which is needed to be resolved.
 Consult others and seek resources: The management of the company needs to consult
the co-workers and other executive directors for their opinion in order to get advice
regarding how to solve the conflict.
 Think about the Lasting Effect: The decision which is to be taken by the management
should be taken considering the long-term impacts of the decision which is to be taken by
the management (Kolk 2016). The management needs to consider the interest of the
business and also the interest of the stakeholders before arriving at any decision relating
to the conflict.
 Consider any regulations: The management of the company also needs to consider the
regulations which are place in the country where the operation is to be carried out. The

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management is planning to expand the business in Asia and the rules and regulations
which are applicable needs to be considered before taking any decisions.
 Taking Decisions: The final step is to appropriately take decisions relating to conflict
which has arisen and the same needs to be taken considering all aspect of the business.
The management of the company can use the following models in order to arrive at a
decision and appropriately develop strategies for tackling the problems which is faced by the
business. The two ethical decision-making model which can be considered are given below:
PLUS Ethical Decision-Making Model
This is a widely used model for ethical decision-making process and the same is taken
considering ethical filters which is provided by the model for the purpose of taking effective
decisions. The letters which is included in the PLUS stands for the follow filters which is to be
considered before appropriate decisions can be taken by the management of the company.
 Policies and Procedures: The decision which is taken by the management should not be
in line of the policies and procedures which are set out by the management. The
management needs to consider the policies and procedures which are to be followed
before appropriate decision is taken by the management of the company.
 Legal: The management needs to consider whether the conflict would affect the legal
parameters of the country (Status Guides 2018). As per the case study which is provided,
the legal parameters which is applicable in Asia is fine with the non-attachment of
statutory warnings on cigarettes packets.
 Universal: The decision which is taken by the management of the company needs to be
consistent with the core values and ethics which is followed by businesses. In the case of

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BBT, the corporate ethics is to attach warning sign with the packets and the same is
according to the regulations of Australian Law. As per the corporate culture as well, the
management of the businesses needs to take appropriate decision considering the culture
of the business and accordingly take decisions.
 Self: The policies which are to be formulated by the management of the company needs
to be taken consideration and should be according to the principles of fairness and justice.
Overview of the Ethical Principles
There are certain ethical principles which must be followed by businesses while taking
any decisions which is relating to the operations of the business (Pearson 2017). In this case, the
management of BBT needs to consider the fundamental ethical principle and ensure that the
decision which is taken by the management is not affecting the economy or the business in any
way. The major principle of ethics which can be identified and which are generally accepted are
listed below in details:
 Principle for Respect of Autonomy: The term autonomy is derived from a Latin word
which means self-rule. The principle states that the one should respect autonomy of other
individuals and also respect the decisions which are taken by other individuals. This
principle is also known as the principle of human dignity (Web.mnstate.edu. 2019). The
principle requires individual not to interfere with businesses of others and thereby also
empower individuals to whom the business or individual is responsible. The Principle of Beneficence: The principle of beneficence states that the operations
which are undertaken by businesses must bring about good in the actions. The principle
states that steps must be taken for the purpose of prevention of harm for anybody and all
the actions should be committed with an aim to do good for the others.

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 The Principle of nonmaleficence: This principle is an extension of the previous principle
and the same effectively states that activity should be undertaken in such a way that no
harm comes to anyone. In any case, if a product is harmful that the business must take all
the necessary steps to minimize the harm. The principle also states that it is not
appropriate to waste resources of the business for any purpose as long as the resources
can be put some good use. In a nutshell, the principle states that every action of a
business must produce more good than harm. The Principle of justice: The principle states that the individuals should get what they
deserve and it is in the obligation of businesses to provide the best quality of services to
the business for ensuring that the principle of Justice is upheld. In normal businesses
circumstances, individuals are expected to treat people with equality, impartiality and
fairness so that a sense of justice is maintained in the business organization.
Major Stakeholders of the Business
As per the case which is provided in the analysis, the business of BBT is planning to
launch cigarettes in Asian markets and the marketing manager of the business is planning to
launch the products without any statutory warning which is required to be put in cigarettes packs
(Prado and Woodside 2015). The activity which is undertaken by the management of the
company is against the ethical code of nonmaleficence and also Beneficence which clearly states
that no harm should be intended to others and businesses would try their best to reduce the harm
(Grace and Cohen 2015). In case of cigarettes packets, statutory warning is provided in the
packets itself for discourages the consumers by letting them know the long-term impact of
smoking cigarettes. In the case study which is provided, the management of the company is only
thinking about the interest of shareholders and not the stakeholders of the business.

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The definition of the stakeholders also identifies the entire community in which the
company operates and therefore the management needs to consider the interest of the entire
community before taking any policies which is related to the business. The policies towards the
stakeholders of the business are considered to be important as the direction of the business is
determined by the management. The management of the company needs to consider the legal
regulations in order formulate appropriate strategy for the business (Crane and Matten 2016).
The case which is shown in the analysis shows that the business is trying to increase the sales of
the business for the purpose of ensuring that the overall sales of the business increases (Trevino
and Nelson 2016). The health warnings should be provided by the management of the company,
with the purpose of ensuring that a general level of safety is maintained for the consumers of the
business. The businesses need to consider the ethical responsibility towards the community in
order to ensure that the expectation of the shareholders of the business are meet appropriately.
Main Ethical Issues in the Case
The main ethical issues which is associated with the case study is that the management
needs to maintain health standards and should consider the concerns of the society and also
consider the interest of all stakeholders of the business. There is an ethical issue that violates the
principle of nonmaleficence and also Beneficence which requires business to minimize the harm
which is associated with the activities of the business and ensure that the business should
effectively take decisions considering the ethical issues. The management also needs to consider
the short term and long term impacts of the decisions which are taken by the management of the
company and ensure that the correct decision is taken by the management.
It is a law in most of the countries that cigarette company must attach a statutory warning
on the packets of the cigarette and the same is shown in order to ensure that the consumers of the

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cigarettes are discouraged regarding the consumption of the same. The measure is also
undertaken in order to ensure that overall sales of the product falls on the basis of the health
warning. The management of the company needs to provide an appropriate. The ethical
consideration is not considered by the management and the management is not planning in terms
of long run. The management needs to formulate strategies for the purpose of ensuring that long
run function of the business is considered while taking major decisions of the business. The
public relation manager is of the opinion that the management needs to effectively formulate the
strategies of the business with the intention of the long-run profitability.
Option for Public Relation Manager
The public relation manager of the business needs to convince the management regarding
the long-term strategies. The public relation manager needs to effectively present the long-term
strategy of the business. The public relation manager needs to make efforts to ensure that the
management understands the importance of the strategies in both in terms of long run strategy
and also considering the needs of the shareholders of the business.
Conclusion
The above discussion effectively shows that the legal requirement of statutory warnings
of cigarette are applicable on different levels. The case study shows that the ethical standards
which are to be maintained by business organizations and the same also affects the decisions
which are to be taken by the management of the company. The assessment also considers the
responsibilities of the company towards the shareholders and other stakeholders of the business.

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Reference
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Grace, D. and Cohen, S., 2015. Business ethics.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business, 51(1), pp.23-34.
Ni, A. and Van Wart, M., 2015. Corporate Social Responsibility: Doing Well and Doing Good.
In Building Business-Government Relations (pp. 175-196). Routledge.
Pearson, R., 2017. Business ethics as communication ethics: Public relations practice and the
idea of dialogue. In Public relations theory (pp. 111-131). Routledge.
Prado, A.M. and Woodside, A.G., 2015. Deepening understanding of certification adoption and
non-adoption of international-supplier ethical standards. Journal of Business Ethics, 132(1),
pp.105-125.
Status Guides. (2018). Ethical Decision Making Models and 6 Steps of Ethical Decision Making
Process - Status Guides. [online] Available at: https://status.net/articles/ethical-decision-making-
process-model-framework/ [Accessed 4 Jan. 2019].
Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how to do
it right. John Wiley & Sons.

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Web.mnstate.edu. (2019). Four fundamental principles of ethics. [online] Available at:
http://web.mnstate.edu/gracyk/courses/phil%20115/Four_Basic_principles.htm [Accessed 4 Jan.
2019].