HC2121 Business Ethics Case Study: Coles Supermarket, Australia

This essay analyzes the business ethics case of Coles, an Australian supermarket giant, focusing on its supply chain management practices and the ethical issues arising from them. The paper highlights concerns regarding unethical human resource practices, specifically the potential for modern slavery within the company's supply chain. It discusses stakeholder pressure, including resolutions filed by shareholders, and the company's reliance on third-party audits. The essay contrasts Coles' approach with that of Woolworths and relates the case to the utilitarianism theory of ethics, arguing that Coles' actions do not maximize stakeholder satisfaction. The paper recommends that Coles take steps to address these issues, potentially by seeking external assistance to improve its ethical standing and improve its supply chain activities. The essay concludes by emphasizing the importance of ethical considerations in business operations and the application of the utilitarianism theory.

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Comparative Business Ethics & Social Responsibility 1
Business Ethics Case: Coles, Australia
The purpose of this paper is to highlight the details about the business ethics case of the company
Coles in the business environment. The essay analyses the business ethics issue affecting the
scope of business of the supermarket giant Coles in the Australian business environment.
Business ethics is crucial for the organizations and its stakeholders as it helps the business
process in moving in the right direction. Business ethics helps in attaining satisfaction of the
stakeholders and working without conducting any fraud in the business environment. Ethical
issues connected with the company Coles supermarket is discussed below:
Unethical human resource practice of the company is causing several issues for the business in
the external environment. The organization is facing serious pressure of the stakeholders of the
organization who are force the management to change the supply chain management practices in
the environment so that they can free people from modern slavery in the environment (Powell
2019). The organization Coles supermarket is performing modern slavery practices in the due to
which the stakeholder are getting dissatisfied from the practices of the business. One shareholder
of the business also filed resolution on the retailer insisting them to take active steps against the
potential worker exploitation performed in the supply chain management activities of the
company. Modern slavery refers to a situation in where the workers of the company face
difficulty in leaving their jobs due to unethical and unsafe behaviour of the employer. The case
when the employers start to threaten the employees of the company if they talk about leaving or
force them or act violently is called modern slavery (Lyons 2015).
Previous year the government of the country appealed the companies earning more than 1000
million dollar to report on modern slavery present in their supply chain process. A research
explained that in Australia, more than 15000 people are facing the problem of modern slavery.
ACCR (Australasian Centre for Corporate Responsibility) proposed a resolution also with three
other parties as well. The ethical sourcing policy of the company Coles is targeted as the supply
chain activities of the company are doing bad for the people of Australia. The company need to
work with Sedex so as to analyse its supply chain activities and how bad they are doing for the
people of the country. Low risk suppliers of the company are approved by Coles of the next two
years and the medium to high risk supplier requires to take an independent third party audit. The

Comparative Business Ethics & Social Responsibility 2
data has been stated that 30-40 percent of the suppliers of the company are rated low risk and rest
all comes under the higher risk category (Business & Human Rights Resource Centre 2019).
The company Coles majorly rely on the reports of the third party audit that reduce the
effectiveness of the organization to perform actions effectively without violating the labour laws
present in the international market. Instead for agreeing on the negative actions performed by the
management of Coles, the officials are arguing in favour of the policies of the business. The
company is standing in favour of the worker rights created by them and are pitching to different
bodies present in the environment that work for the human rights and relations. The supply chain
activities of the company are not fit for the people but still the company is advocating in favour
of that one of the biggest ethical issue for the organization (Patterson, Wilkins, and Painter
2018).
Woolworths also faced similar ethical issues in the previous year, so ACCR wants Coles to
amend its policies and come closer to the policies of Woolies in the business environment. 60%
of the suppliers of the company were performing highest risk in the environment, in response to
the data given the company subsequently changed its policies but not like Coles where the
business is embedding the union voice and the expressions of the shareholder. The company
Coles continues to advocate that its policies are shown not fit for purpose is wrong but they are
unable to identify the factors that are analysed risky by ACCR and other organizations. In case
the resolution is accepted by the organization Coles, then the case would be heard in the AGM of
the company but due to the quirk in the legislations of Australia, the group initially need to pass
a resolution that focuses on amending the constitution before the second one is passed (Pops
2019).
Thus, it should be noted that it has become the need of the era to initiate strategies to eliminate
high pressure on the people of company present in the supply chain management process as it is
against the human rights of Australia. The company is exploiting the labour by providing them
high pressure at work with low wages as well. Therefore, it is crucial for the organization to
analyse the activities that are stressing the people of the company otherwise the business will
come under severe struggle maintain profitability of the business (Vardy 2016).

Comparative Business Ethics & Social Responsibility 3
Relating the above mentioned case with the theory of ethics, it should be noted that according to
the theory utilitarianism it is important that the business activity should be acceptable in the
environment and it should provide satisfaction to the people on a whole. According to this theory
of ethics, right actions or the acceptable actions are the actions that provide maximum level of
satisfaction to people on a whole. It is important for the business to initiate actions that increase
the satisfaction level of people and do not disturb their wellbeing in the environment (Barrow
2015). It is important for the organization to such actions for the people present in community.
Irrespective of the fact that the activities conducted are right of wrong, until the time it provide
satisfaction to the people, the organizations can perform it in the environment. Thus, it should be
noted that it is important for the organization to focus on the utility and satisfaction level of the
stakeholder present in the business environment. Utilitarianism does not focus on the actions
conducted in the environment, instead it focuses on the results of the actions performed in the
environment. Thus, according to this theory of ethics, the company Coles is not performing
actions in the environment that are increasing the satisfaction of the people in the environment
(Kagan 2018).
Instead, the activities of the company are reduces the interest of the people in the activities of the
company and are stressing them as well. Thus, the company should stop performing such actions
in the environment that are against the interest of its people in the environment and should
perform activities that maximize the utility of the customers in the environment. This theory of
ethics only focuses on the results of the actions that is perceived by the people in the
environment, the net benefit is the only thing that is looked according to theory. Therefore, the
company Coles should perform actions in the environment that does not harm the interest of
single person in the business environment instead it uplift the interest of stakeholders in the
external environment (Westermarck 2017).
Thus, it is recommended to the management of Coles that they should take help of the officials to
analyse the activities that business is performing in the wrong manner. ACCR has given chance
and opportunity to the organization to evaluate the areas where the business is performing
wrongful deeds in the environment. So, the organization should take help from the third party, so
as to analyse the activities that they should perform in the external environment. Further, it
should be noted that according to utilitarianism, the activities of Coles should strive goodness for

Comparative Business Ethics & Social Responsibility 4
its employees through the supply chain activities of the company and it should not harm or
threaten the interest of the people in any way. Thus, in this way the company use make use of
ethical approach to attain satisfaction of the stakeholders in the environment (Mill 2016).
Thus, in the limelight of above mentioned events, the fact should be noted that the essay
highlighted details about the business ethics issue connected with the supply chain management
activities of the company Coles. It should be noted that utilitarianism theory of ethics refers to
the theory that mainly focus on getting positive results in the environment, irrespective of the
type of activity that is conducted in the environment. The company is performing wrongful
actions in the supply chain management process that should be avoided by the organization.
Thus, the company should make use of utilitarian strategy to change the negative activities into
positive activities of supply chain in the business environment.

Comparative Business Ethics & Social Responsibility 5
References
Barrow, R., 2015. Utilitarianism: A contemporary statement. UK: Routledge.
Business & Human Rights Resource Centre., (2019) Australia: Supermarkets Coles &
Woolworths pressured over alleged exploitation in labour supply chains [online]. Retrieved from
<https://www.business-humanrights.org/en/australia-supermarkets-coles-woolworths-pressured-
over-alleged-exploitation-in-labour-supply-chains> [Accessed on 17 September].
Kagan, S., 2018. Normative ethics. UK: Routledge.
Lyons, D., 2015. Utilitarianism. Wiley Encyclopedia of Management, pp.1-4.
Mill, J.S., 2016. Utilitarianism. In Seven masterpieces of philosophy (pp. 337-383). Routledge.
Patterson, P., Wilkins, L. and Painter, C., 2018. Media ethics: Issues and cases. Rowman &
Littlefield.
Pops, G.M., 2019. A teleological approach to administrative ethics. In Handbook of
administrative ethics (pp. 221-232). Routledge.
Powell, D., (2019) Coles under pressure over potential worker exploitation in supply chains
[online]. Retrieved from <https://www.smh.com.au/business/companies/coles-under-pressure-
over-potential-worker-exploitation-in-supply-chains-20190910-p52ptv.html> [Accessed on 17
September].
Vardy, P., 2016. The puzzle of ethics. UK: Routledge.
Westermarck, E., 2017. Ethical relativity. UK: Routledge.