Business Ethics Report: Ethical Perspectives and Subway's Practices

This report delves into the realm of business ethics, providing a comprehensive analysis of ethical perspectives and their application within the context of Subway. It explores the development of theoretical ethical approaches, comparing absolute and relative theories and examining ethical issues that can affect a business's operational activities. The report further investigates Subway's business objectives from an ethical standpoint, evaluating the implications for the company and its stakeholders. It assesses the role of Subway as a moral agent, analyzes employee involvement and empowerment, and addresses a current ethical issue affecting the business. The report concludes by proposing strategies to improve Subway's ethical standing while meeting its objectives and fostering good employee relationships, culminating in the design of a suitable ethical code.

Running head: BUSINESS ETHICS
Business Ethics
Name of the Student:
Name of the University:
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Table of Contents
1. Introduction.....................................................................................................................................................3
2. Section 1..........................................................................................................................................................3
2.1. Ethical perspectives in Business.......................................................................................................................4
2.1.1. The background and development of theoretical ethical approaches........................................................4
2.1.2. Comparison between absolute and relative theories.................................................................................4
2.1.3. The ethical issues which can affect any business’s operational activities.................................................5
3. Section 2..........................................................................................................................................................5
3.1. Understanding business objectives from an ethical perspective.......................................................................5
3.1.1. Explanation of how Subway’s objectives are affected by ethical considerations.....................................6
3.1.2. Evaluation of implications of Subway and its stakeholders to operate ethically......................................6
4. Section 3..........................................................................................................................................................7
4.1. Understanding ethics in workplace relationships..............................................................................................7
4.1.1. Assessment of the role of Subway acting as a moral agent.......................................................................7
4.1.2. Employee involvement and empowerment...............................................................................................8
5. Section 4..........................................................................................................................................................8
5.1. Assessing a current ethical issue in a business..................................................................................................8
5.1.1. Current ethical issue affecting the Subway’s business..............................................................................9
5.1.2. Improving the ethics of Subway whilst meeting objectives and good employee relationships................9
5.1.3. Designing a suitable ethical code............................................................................................................10
6. Conclusion.....................................................................................................................................................10
7. References.....................................................................................................................................................12

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1. Introduction
Business ethics, also called corporate ethics, is referred to a type of professional ethics or applied ethics
which examines the ethical or moral principles and problems that occurs in the business environment. It
generally applies to all sorts of business conduct aspects and relevant to the individuals conduct as well as the
entire organization. These corporate ethics originate from the individuals, legal system or from the statements of
the organization. It refers to the contemporary standards of the organization, its principles, norms and set of
values which govern the behavior and actions of a person in the organization (Abend 2014).
The report throws light on the business ethics’ concept and its relevance with business objectives and
responsibilities. Business ethics have descriptive and normative dimensions. As career specialization and
corporate practice, the field tends to be normative. Academics employ methods which are descriptive, in order
to understand the behavior of the business. The quantity and range of the ethical issues basically reflects the
point of interaction between non economic concerns with profit maximizing behavior (Audi 2012).
The report highlights the development and background of theoretical ethical approaches of an
organization I worked for, comparison between absolute and relative ethics, ethical issues which can affect the
operational activities of a business, implications for a business and its stakeholders to operate ethically and the
role of a company as a moral agent. Further it includes; the employees’ involvement and empowerment, the
ethical issues that are affecting the business and the design of a suitable ethical code.
2. Section 1
Business ethics refers to the study of any situations, decisions and activities related to a business, where the right
and wrong issues are addressed. A business man should make promises of not harming any individual at the
workplace, knowingly (Bardy, Drew and Kennedy 2012). It’s been one year I have been working at Subway and
I really enjoy working. I am the assistant manager of the company. I have learned so much about the company’s
working procedure, policies, ethics and many more. The working environment is extremely nice, with good co
workers. The shift timing is good along with overtime pay. Working there has helped me a lot in gaining an
understanding about workplace policies and ethics, which I am going to discuss in this report.

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2.1. Ethical perspectives in Business
Business ethics can be referred to as a code of conduct. It gives a brief idea of what is good and what is
not good for the society’s welfare. All the business organizations are expected to follow these ethics for its
benefits (Barry 2016).
2.1.1. The development and background of theoretical ethical approaches
Deontology Theory: This theory states that the outcome of actions is not much important, but the thing
that matters is actions, which needs to be justified morally. It mainly emphasizes on the relation between
morality and the duty of human beings actions. The word has been derived from a Greek word “Deon” which
means “duty”, and “logos” meaning “science” (Becker 2012). For instance, drinking and driving is ethically not
correct, but if an individual argues over this specific point, then on that basis, they are accountable towards laws,
as they did wrong actions and broke moral principles. The deontological theory was first developed by theorist,
Immanuel Kant, while taking his own decisions. It is important for us to follow our duties and responsibilities
properly. The actions are taken on the basis of ethics and moral principles. Therefore, business personnel must
understand their duties and responsibilities in order to treat the employees nicely and correctly ( Dierksmeier
2013).
Technological Theory: The focus of technological theory is on the consequences of the actions which
produces the adequate results. The theory also suggests about decisions framework which develops the required
consequences in order to manage the actions carefully (Becker 2012).
Consequentiality Theory: It relies upon determining how the moral actions of a person affect others
and what its consequences are. The results of the consequences may result into something good or even bad, that
is, they can either have favorable impact or be damaging (Brenkert and Beauchamp 2012).
Example: The Subway Company has adopted these theories in order to build their trust on the
customers. They emphasize on morality and trust in order to build a strong customer base. Information
technology is used to enhance their franchising system as well as adopting a quality monitoring for the
franchisees. They have used social networking channels in an adequate manner in order to promote their unique
product and service offerings to their customers.
2.1.2. Comparison between absolute and relative theories
Generally, ethical theories have two approaches, that is, the approach on the basis of an individual’s
relationship as well as their character and the other one is the approach which is based on the principles. The

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approach basically relies on the two ethics’ variant traditions, which are Kantianism and Utilitarianism
(Dierksmeier 2013).
Immanuel Kant developed this theory and the approach is called as deontological, which explains duty.
This particular theory has some significant role on that of professional ethics as well as moral philosophy. The
theory focuses on the users of the service and whether or not, they are capable of taking any kind of decisions.
The most important principles related to the approach are; maintaining confidentiality within a person, no
discrimination, providing wrong information and obtaining the information’s consent (Crane and Matten 2016).
In contrast to that, Utilitarianism is regarded as technological theory, which is under the
consequentiality ethics theory. The main difference in these theories is in the concept and approach. This
approach helps in getting better results; moreover, it states that it is not an issue to tell lies. The theory is
actually based on the facts, and the magnitude of right and wrong is on the basis of the actions’ results. In
teleological ethics, end gives justification to all means. This theory explains about rightness or correctness of
actions and that is being judged throughout the end (DesJardins and McCall 2014).
2.1.3. The ethical issues which can affect any business’s operational activities
At times, Subway is also being criticized for its environmental and social issues, of their operational
activities. In 2016, the company’s revenue had a fall of 4.3%, which was more than its previous year’s. It
resulted in the loss of status and other restaurants took over its position. The company also faced severe issues
with its spokesman and chief marketing officer. Moreover, the customers were not happy with the Subway’s
menu and mentioned that the quality has degraded. Survey by the Ethical Consumer Magazine showed that
Subway was being sold a vast amount of Tuna fish, which resulted in the substantial crisis of the species (Floyd
et al. 2013).
3. Section 2
3.1. Understanding business objectives from an ethical perspective
Business objectives can be explained as particular future aims or motives which the business needs to
achieve. This can be explained as the desired result or destination. In any business, this usually is expressed by
the terms of profit. A business may have long term objectives, which are; productivity, financial resources,
market standing, performance and more; or short term objectives, like customer orientation, growth, survival,
sales’ increase and others (Frans and Jesper 2015).

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3.1.1. Explanation of how Subway’s objectives are affected by ethical considerations
Subway is a fast food restaurant, which is famous for its submarine sandwiches and salads. It has
45,000 stores approximately, located at more than hundred countries. It is one of the largest single brand chains
and restaurant operators across the world. Subway’s objectives are clear and simple; they want to keep the
customers coming back into their stores again and again. The objective is quite straightforward which affected
many organizational aspects. To bring in the customers again and again, the shop must be clean, food and
services must be of best quality and the store must be well advertised ( Hartman, DesJardins and MacDonald
2014). Therefore, the organization and its franchisees need to work hard in order to improve these services.
Moreover, the customers once, got tired of its menu, which according to them became repetitive. Some had
complains regarding the quality of the items, which is unethical. Hence, the store also needs to focus on their
menu and change their items to achieve the organizational objectives and aims. The advertising should also
focus on their main item, along with offers and discounts. The objectives are directly related to the
organizational profit and progress, thus, it is very important (Hoffman, Frederick and Schwartz 2014).
It is important for the company’s directors to initiate ethical behavior and moreover, they must ensure
that the staffs and employees should directly interact with their supervisors whenever they face any issues.
Directors must encourage the associates to directly report or file a complaint whenever they come across any
unethical behavior or violation of laws and regulations. Subway aims to be the leading restaurant service in the
world. To achieve their objectives they must check that their aims are ethically correct. In order to have more
customer base, they must take care of the customers’ wishes and demands, which will be beneficial for the
company itself (Jennings 2014).
3.1.2. Evaluation of implications of Subway and its stakeholders to operate ethically
A stakeholder refers to an individual, organization or group, who has concern or interest in any
organization. They can affect or can be affected by the actions, policies and objectives of the organization. They
can be creditors, employees, government, governmental agencies, directors, owners, unions, community and the
suppliers from where the business can draw its resources. In simpler words, stakeholders are the ones who
invest for the company. Subway’s stakeholders share same interest like the company, for achieving the success.
The stakeholders hold a strong level of power in the organization. Majority of stakeholders are partners in
business, public sectors and private sectors, service delivery partners and others. Other major stakeholders are
its colleagues, customers, investors and suppliers (Mahoney 2013).

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The basic requirement of the Subway’s stakeholders is earning respect in the society and enhancing the
value by generating new offers and discounts for the customers and introducing new items, keeping in mind the
quality of the foods. It is also investing to change its menu system and advertising to get the long term results.
Delighting each and every consumer would come directly when the service is good. The stakeholders’ interest is
bringing in improvement in any debt situation and increasing the sales. The future interest of Subway’s
stakeholders is to address the issues more effectively so that it helps the company’s investors for a long term.
For satisfying the stakeholders, Subway is trying to improve its corporate image by building a stronger customer
base (May, Luth and Schwoerer 2014).
4. Section 3
4.1. Understanding ethics in workplace relationships
Each and every organization is ethically sound when they fairly treat their employees and customers.
Organizations, big or small, need to develop and improve their workplace policies and procedures to avoid
conflicts and unethical behavior among the co workers. In order to establish sound workplace relationships,
organizations need to maintain some ethical strategies and policies (Rutherford et al. 2012).
4.1.1. Assessment of the role of Subway acting as a moral agent
The term moral agent can be referred to the ability of an individual to undertake different moral
judgments, on the basis of correct and incorrect notions. Moral agent is regarded as the one who holds the
capability of deciding what is right and what is wrong. Subway acts as a moral agent, as it is committed to the
quality, value, service, innovation and trust of the company. Trust is earned from the consumers, which reflects
the company’s morality, for holding the value and ethics for a long period (Stanwick and Stanwick 2013).
Subway understands and knows the need for offering a wide range of healthy offerings to their
customers. Moreover, they provide complete and accurate nutritional information to the customers. In the past
years, Subway faced many problems regarding its products quality and quantity. Since then, it switched its
products and menus to improve their consumer base and followers (Su 2014). The company has also taken
initiatives in the Corporate Social Responsibilities which promotes energy efficiency, conservation of water,
water and food quality, child diet plan and reducing wastes. They ensure high quality food, meeting the safety
standards and at the same time taking care of the environment. Subway understands that in order to create a

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strong customer base and communities, they need to improve their other activities, keeping in mind the food
quality. They also lend their helping hand to the charitable and institutional events (Trevino and Nelson 2016).
4.1.2. Employee involvement and empowerment
Employee involvement is regarded as an important concept, in the recent times. There are several
initiatives which the organization needs to undertake to enhance the involvement of the employees. Moreover,
they must be made clear regarding the employee empowerment concept. Best organizations are the ones, who
treat their employees ethically, involve them in each and every situation and empower them. Employees must be
made aware of their working schemes, policies and procedures, initiatives, services, management, business
processes and others. Moreover, they must be involved and engaged whenever the company organizes any
important events or gatherings. Employees must be given the opportunity to speak their heart out and their
views and opinions must be given importance, in order to make them feel that they are an important part of the
company (Ulrich and Sarasin 2012).
Subway continuously adopts several strategies in order to improve the working condition of the
employees and to enhance their skills. They engage their staffs since the beginning of their job. It cultivates their
trust and loyalty for the company’s operations. It helps in understanding the responsibilities and roles of the
employees. Moreover, they encourage workplace diversity, as a diverse workforce is the reflection of changing
marketplace and the world. It is responsible for bringing in high values to any organization. Respecting
differences of each and every individual proves to be beneficial at the workplace ( Weiss 2014). It creates
competitiveness and increases work productivity as well. Furthermore, in order to engage all the employees the
company organizes events and ceremonies, where the employees are asked to comment on their issues. This
helps in involving them more, making them feel better. Their opinions and views regarding the company’s
betterment, are given importance, in order to make them feel that they are a crucial part of the company. The
company also assures their staff members about the working levels to achieve company’s targets and goals (Su
2014).
5. Section 4
5.1. Assessing a current ethical issue in a business
Most businesses focus towards affects which are created by business organizational activities to the
environment of the business. In order to increase their ethical concerns as well as build customer awareness,

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businesses are promoting social values to ensure about their competitive advantages. Business ethics now
embrace and focus on the Corporate Social Responsibility, which connects with the human resource
management, accounting practices, marketing and production as well (Ulrich and Sarasin 2012).
5.1.1. Current ethical issue affecting the Subway’s business
Subway runs its business in various parts across the world. At times, the organization faces various
issues related to finance, consumer satisfaction and others. Currently, the company is facing some ethical issues
which are discussed in this section of the report. The sandwich organization’s revenue decreased by 4.3%,
which resulted in their loss of status as “one of the most popular fast food chains”. The company even lost its
spokesman, who lured the customers in the most possible way. He was being convicted for having physical
relationship with minors and circulating child pornography (Abend 2014). The company was also charged for
adding artificial colors, preservatives and flavors. Moreover, Subway was too slow in adapting the changes the
consumers wanted, which resulted in the decline of its sales. Researchers found that the chicken used in the
Subway sandwiches were of low quality and also the company was sold a vast amount of Tuna fishes, which
resulted in the substantial crisis of the species (Barry 2016).
5.1.2. Improving the ethics of Subway whilst meeting objectives and good employee relationships
To improve Subway’s ethics, the company established their reports on the Corporate Social
Responsibility and moreover, they started giving more attention towards the workplace rights and regulations.
They provided complete and accurate nutritional information to the authorities as well as the customers. The
company has also taken initiatives in promoting energy efficiency, conservation of water, water and food
quality, child diet plan and reducing wastes (Ulrich and Sarasin 2012). They ensure high quality food, meeting
the safety standards and at the same time taking care of the environment. Subway understands that in order to
create a strong customer base and communities, they need to improve their other activities, keeping in mind the
food quality. They have changed their menus and products, which provides better quality food with added
nutrition. They are also lending their helping hand to the charitable and institutional events (Brenkert and
Beauchamp 2012).
Moreover, Subway is continuously adopting several strategies in order to improve the working
condition of the employees and to enhance their skills, by engaging the staffs. It cultivates their trust and loyalty
for the company’s operations. It helps in understanding the responsibilities and roles of the employees. The
company organizes events and ceremonies, where the employees are asked to comment on their issues. This

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helps in involving them more, and makes them feel better. Their opinions and views regarding the company’s
betterment, are given importance, in order to make them feel that they are a crucial part of the company. The
company also assures their staff members about the working levels to achieve company’s targets and goals
(Crane and Matten 2016).
5.1.3. Designing a suitable ethical code
Ethical codes are the set of rules undertaken by a company for understanding the way they must behave
within the business organization and environment. The employees must follow the workplace rules and
regulations. Subway must ensure that their employees are not facing any issues regarding the company’s
policies and procedures. They must provide their employees with medical assistance, if they fall sick or become
injured during the working hours, along with paid sick leave. All the employees must be given equal facilities
and opportunities; irrespective of their origin, sex, gender, nationality, race and other factors. Female workers
must be paid with equal salary as that off male ones. Salaries should be on the basis of market rate and workers
must not be exploited (Mahoney 2013).
Confidentiality of the employees must be maintained within the organization. Moreover, the
organization must not get engaged in any sort of corruption issues, which will in turn mar its progress and
growth. It is the duty of the company to protect its employees as well as customers. The employees must be kept
clear regarding the company’s stakeholders and shareholders. Furthermore, consumers must be provided with
high quality food and they must get what they pay for. If any customer or employee falls sick after consuming
their item, it is the duty of Subway to compensate (Hoffman, Frederick and Schwartz 2014).
Ethical codes refer to the way a company is behaving with its employees, business environment as well
as the society. The employees are required to follow the code of ethics for the betterment of the company. The
company should take care of the employees’ safety and health related issues, which requires safe environment
and operational activities without causing harm to the natural resources and surrounding people. The employees’
safety and security is the responsibility of the company. The company should offer them medical help when
they get injured during the working hours. Moreover, if the employees are sick or fall sick during the working
hours, they must be entitled with sick pay. The employees must be given equal opportunities, irrespective of
their gender, race, nationality, sex and others, which will boost up their confidence. It can also avoid workplace
conflicts. Male and female workers must get equal amount of salary and if they serve for extra hours, they must
receive extra pay (Brenkert and Beauchamp 2012).

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Companies must not get engaged in any sort pf political issues or corruption, which may mar its
progress. It is the company’s duty to protect its customers and employees. Moreover, companies should
maintain its transparency in front of the stakeholders as well as the employees, which will help them get a clear
idea on how the organization is being operated. This will also help a company to extend their business in other
countries. If any consumer or employee faces severe problem due to the company, then the organization must
compensate them (Mahoney 2013).
6. Conclusion
To conclude, ethics differentiates what is good and what is bad, what is wrong and what is right. It
gives a clear idea about the fair and unfair, proper and improper action, moral and immoral. In other words, it
can be defined as a code of conduct. It tells an individual or an organization how their behavior should be.
Businessmen or Business organizations must provide their customers with good quality services and products. It
is their duty to take care of their target consumers. They must not indulge into unfair means or trade practices
such as adulteration, cheating in measures and weights, promoting advertisements that mislead a customer,
black marketing and others. A company has many competitors and it is the organization’s duty to encourage the
competition in fair means. Moreover, big businessmen should protect and respect the interest of the small ones,
while avoiding the unfair competition. Monopolies must be there and taxes to the government must be paid on a
regular basis. One can say, Business ethics means conducting a business which has a human touch in it and
serves for the welfare of the society and community.

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7. References
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Becker, G.K. ed., 2012. Ethics in business and society: Chinese and western perspectives. Springer Science &
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Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of
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Floyd, L.A., Xu, F., Atkins, R. and Caldwell, C., 2013. Ethical outcomes and business ethics: Toward
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Frans, M. and Jesper, S., 2015. Corporate social responsibility in Brand equity: A study on how CSR can
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Jennings, M.M., 2014. Business ethics: Case studies and selected readings. Cengage Learning.
Mahoney, J., 2013. Teaching business ethics in the UK, Europe and the USA: A comparative study.
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May, D.R., Luth, M.T. and Schwoerer, C.E., 2014. The influence of business ethics education on moral
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