BTEC Level 3 Business Ethics Report: Tesco Analysis

This report provides a comprehensive analysis of the business ethics of Tesco Plc, a major multinational grocery retailer. The report begins by identifying key ethical concerns faced by Tesco, including employee health and safety, ethical accounting practices, and environmental protection. It then explores how Tesco can improve its ethical standing through compliance with relevant regulations and ethical guidelines. The report further examines the impact of ethical behavior on both internal and external stakeholders, highlighting the positive implications for brand reputation, customer loyalty, and employee retention. Additionally, the report delves into the social implications of Tesco's business ethics, focusing on the environmental impact, employee well-being, and community development. Finally, the report examines the ethical concerns of the communities in which Tesco operates, and suggests measures to improve corporate responsibility.

Running Head: BUSINESS ETHICS 0
Understanding Business Ethics
Student Details:

BUSINESS ETHICS 1
Task-1
Introduction
The purpose of this report is to analyse ethical issues faced by a particular business while
conducting its operational activities. This report will take an example of Tesco Plc. operating
in retail sector and is one of the largest British multinational companies as grocery retailers.
This report will evaluate the ways company will improve ethics in its operations and analyse
the impact of ethical behaviour on its stakeholders. Lastly, this report will also include
implications of ethical operations within the company and its stakeholders.
Ethical concerns faced by the firm
The operations of the company include offering groceries and other products to its customers
through its super market, hyper market, convenience shops and supper stores. One of the key
ethical concerns faced by the company is ensuring health and safety of its employees since it
has hired over 450,000 employees globally. The risk of occupational accidents and other
work related safety challenges are necessary to be considered by the management of the
Tesco to make sure that its employees remain safe in the workplace (Tanwar, 2019). In case,
the employees’ health and safety is not ensured by the company, then it creates a negative
workplace environment and it also hinders brand reputation of the firm. Another ethical
challenge is relating to safeguarding the books of accounts of the company to make sure that
it did not engage in unethical accounting practices especially when it is a publicly traded
company (Bundy, et al., 2013). It is an obligation of the senior level management of the
company to make sure that they comply with necessary accounting principles to avoid
engaging in unethical conduct. Lastly, protecting the environment and ecosystem of local
community is a key concern for Tesco. The company is obligated to make sure that it reduces
its carbon emissions in order to contribute to the protection of the environment.
Improvements in ethics
In order to deal with ethical challenges faced by Tesco, the management is required to
carefully consider various factors. The health and safety of employees of the company can be
ensured when the management complies with relevant health and safety laws in the UK.
“Health and Safety at Work Regulations 1999” provides various guidelines for company such
as Tesco to make sure that they focus on health and safety of their workers by eliminating

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many factors that could harm them (Natural HR, 2020). The ethical concerns relating to
accounting practices can be eliminated by Tesco if the company complies with “GAAP or
Generally Accepted Accounting Principles”. As per these guidelines, the company has to
make sure to maintain consistency in its books of accounts and maintains transparency which
eliminates any risk of unethical accounting conduct (Choi, et al., 2019). The management of
Tesco can address the issue of unethical practices relating to the environment by reporting
their impact on the environment and also complying with environmental protection
guidelines in the UK. The “Environmental Protection Act” and the “Control of the Protection
Act” are good examples of legislation which enforces Tesco to assess its carbon footprint and
take necessary measures to reduce its emissions that would lead to protection of environment
resources (McKinley, et al., 2017).
Impact of ethical behaviour on stakeholders
The operations of a business directly affect the internal as well as external stakeholders. The
internal stakeholders of the company include employees, shareholders, the Board of directors,
managers and others whereas the external stakeholders include customers, suppliers, the
governments, environment, local communities and others. Complying with ethical behaviour
allows businesses such as Tesco to create a positive impact on its business as well as
stakeholders. Actions taken by the organisations for protection of its employees by
complying with health and safety guidelines also ensure that it complies with relevant laws
and it also creates a positive brand reputation of the company which increases its sales
benefiting its shareholders (Bello, 2012). The decisions made by the management for the
protection of the environment results in development of local communities as well due to
reduction in pollution and protection of natural resources. The ethical conduct of managers
and the Board of Directors are crucial for the company to create and foster a culture in which
unethical accounting practices are not supported by the organisation and it is able to maintain
transparency in its operations. These ethical behaviours have a positive impact on the
stakeholders of the company allowing Tesco to sustain its growth in the market by generating
a competitive advantage (Jones, et al., 2018).
Implications of operating ethically
There are various benefits of engaging in the ethical behaviour by businesses which have a
positive impact on their stakeholders as well. Companies are able to build customer loyalty

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while engaging in ethical practices since it creates a positive brand reputation which allows
organisations to reach out to a wider customer base. A recent study found that 73 per cent of
millennials customers preferred to pay additional money for products which are ethically
manufactured by organisations (Curtin, 2018). This shows the engagement in ethical
behaviour such as protection of the environment allow organisations such as Tesco to offer
better products at high prices for its customers which benefits them and it increases
company’s profitability that has a positive implication on its stakeholders such as employees,
shareholders, managers and customers. Companies are also able to avoid legal problems
while engaging in ethical behaviour since they comply with relevant laws that affect their
business operations. Another positive impact is retention of talented employees since ethical
behaviour creates a positive work environment in which employees feel secure and they are
more committed towards achieving corporate goals (Leonidou, et al., 2017). Especially
employees working in developed nations are able to protect their fundamental rights which
show positive implications of ethical behaviour on the stakeholders of a company.
Conclusion
To conclude, general ethical issues faced by companies such as Tesco are relating to
accounting of health and safety of employees and protection of the environment. These issues
can be addressed by complying with relevant laws and taking precautionary measures.
Stakeholders and the business benefits from ethical behaviour of a company and the positive
implications results in enabling companies such as Tesco to maintain a balance between
stakeholders’ interests and increasing profitability.

BUSINESS ETHICS 4
Task-2
Introduction
There are various social implications of the actions taken by businesses or society which are
necessary to be considered while protecting the interest of various stakeholders. This report
will evaluate various social implications which businesses face while conducting their
operations in relation to ethics. The impact of these ethical issues on society due to business
activities will be analysed along with their social implications by taking an example of Tesco
Plc.
Social implications of business ethics
Society is considered as a key stakeholder of businesses and the different activities taken by
businesses have a direct impact on the development of society. Organisations have to deal
with a number of social implications which are a result of practices which they conduct in
their different areas relating to business ethics. Compliance with business ethical principles is
crucial for businesses to make sure that they positively influence social development while
achieving their corporate goals (Bondy, et al., 2012). One of the key ethical issues faced by
Tesco that affects society includes negative impact of the operations of the company on the
environment. Environmental resources are scarce in nature which makes it crucial for
businesses to make sure that they did not abuse them and take necessary measures for their
protection that benefits society as a whole. Tesco has to make sure that it reduces carbon
emissions and harm fresh water sources as well. These challenges has substantial social
implications which are necessary to be assist by companies to make sure that they implement
measures to positively influence them. Harming the environment resulted in increasing
number of diseases and it also contributes to global challenges such as global warming and
climate change (Manroop, 2015). Tesco has to implement business ethical principles to
understand these ethical concerns that are a result of different areas of its activities.
Another key challenge is protecting its employees from any harm, injuries or diseases while
they discharge their duties at a workplace. This is social obligation that is imposed on Tesco
to make sure that the company did not hinder the development of society in which it operates.
These are social issues that affect not only the employees of Tesco but their families as well
as local communities. Lack of focus on these areas makes it difficult for Tesco to maintain its

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image and reputation in the market that makes it challenging for the firm to sustain its
profitability (Kolk, 2016). On the other hand, positive social implications of compliance with
business ethics led to the development of society and meeting of interest of stakeholders of
the firm. The company should implement policies for training its staff members while also
incorporating ways through which carbon emissions can be reduced from different areas of
its activities that will lead to increasing brand reputation of Tesco providing positive
consequences to a company. It shows that focus on smaller areas of the business can also
have a significant impact on achievement of social obligations of the business that contributes
to creating a just and fair society (Saeidi, et al., 2015). Tesco has to identify these social
implications of business ethics that are a direct result of its business activities to ensure that it
formulates strategies that are focused on maintaining a balance between interests of its
stakeholders and achieving major milestone without creating obstacles in the development of
society.
Conclusion
Based on the above observations, it is concluded that Tesco’s operations have direct social
implications relating to business ethics which are necessary to be understood by its
management also leading to fulfilment of social obligations of the company. To understand
these social obligations is crucial for Tesco that will allow the firm to create a positive brand
reputation contributing in its profitability allowing it to maintain a healthy balance between
the interests of its stakeholders.

BUSINESS ETHICS 6
Task-3
Introduction
There are various ethical concerns faced by communities in which business operates and
these concerns are necessary to be addressed for the benefits and developments of these
communities. This report will analyse the case of Tesco to understand these concerns along
with measures suggesting improving corporate responsibility of the firm.
Ethical concerns faced by communities and measures to improve
corporate responsibility
Local communities are a key stakeholder of companies and they are directly affected by their
operations. It is the duty of companies such as Tesco to make sure that they assess their
impact on these communities and take corrective measures which allows them to have an
overall positive impact on their development. Some of the key ethical concerns generated by
the activities of Tesco include ensuring health and safety of its employees, compliance with
necessary accounting principles and protection of the environment. Since a large number of
people are employed by Tesco, it provides employment facilities to the local communities
where its operations are established. It has to make sure that health and safety of these
workers are maintained since it has a direct impact on these communities (Tai & Chuang,
2014). The local employees along with migrant workers who are hired by Tesco should
receive protection in the workplace and the management should take precautionary measures
that protect these workers from any type of harm during their work. For example, the
company failed to comply with necessary health and safety requirements in 2016 which
resulted in causing injury to one of its employee due to such breach, Tesco was subjected to
the penalty of £125,000. This shows that it becomes important for the company to engage in
ethical actions for the interest of its stakeholders (Steward, 2018). In order to address this
issue and improve corporate responsibility, the company should conduct risk assessment to
find potential gap in its health and safety policies and it should also create a separate budget
that is targeted towards protection and development of its employees.
Furthermore, there are a large number of local shareholders that invest in the operations of
Tesco and its profitability also has an impact on economic development of local
communities. Therefore, the management is obligated to make sure that they maintain

BUSINESS ETHICS 7
transparency in the accounting practices of the company by complying with necessary
guidelines and accounting principles allowing them to eliminate unethical accounting
practices (Klettner, et al., 2014). For example, the company was involved in an accounting
scandal in which some of its staff members compromised the integrity of its accounts by
engaging in unethical conduct. Many of these staff members resigned from their position;
however, their actions hindered the public image of Tesco while also harming the interest of
local communities due to lack of transparency in its operations. This issue can be addressed
by stricter compliance with accounting guidelines such as GAAP and providing training to its
staff members that allows them to avoid engagement in unethical accounting practices
(Colson, 2017). A thorough audit should be conducted on a periodical basis in internal
accounting practices of Tesco to eliminate such ethical behaviour to promote corporate
responsibility.
Moreover, operations of the company also emit greenhouse gases due to use of electricity and
fossil fuels which increases pollution level in local communities. An ethical obligation is
imposed on the management to make sure that they reduce carbon emissions resulted due to
operations of the company which benefits the interest of local communities (Wills, 2013).
The company has to make sure that it complies with the relevant laws that are focused on
protecting the environment to create a positive impact on local communities. Breach of the
laws could have severe consequences that not only affect the brand image of Tesco but also
adversely affect the development of local communities (Eberle, et al., 2013). A good example
is fine imposed on Tesco in 2017 for violation of the environmental and safety laws; the court
ordered company to pay £8 Million for the failure of the company to properly maintain and
control petrol in one of its outlets. Due to the failure of the organisation, around 23,500 litres
of petrol was lost which affected the supply of petrol to the local communities while also
negatively affecting the environment (Bowdren, et al., 2017). These examples show the
ethical concerns faced by the local communities due to the operations of Tesco and necessary
measures to address these challenges. The company should invest in use of renewable energy
sources and taking better measures to protect scarce resources such as petrol to make sure
that they are not wasted. These actions will improve compliance with corporate responsibility
of Tesco while also ensuring the development of local communities.

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Conclusion
Conclusively, ethical concerns faced by local communities in which Tesco operates include
health and safety of workers, lack of compliance with accounting principles, and increasing
carbon emissions. These issues can be addressed by compliance with relevant laws, taking
precautionary measures, stricter enforcement of accounting principles and reduction of
carbon emissions.

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