MGT3001 Governance and Business Ethics: Cadbury NZ Report

This report presents an analysis of Cadbury NZ's business ethics, focusing on corporate social responsibility, moral philosophies, and decision-making processes. It examines ethical dilemmas, including fair trade practices and the impact on stakeholders, within a global context. The report applies teleological, deontological, and contemporary ethical theories to understand the issues. It highlights the influences on ethical policies and explores alternative solutions to address customer concerns and improve business practices. The study also covers Cadbury's history, its ethical decision-making approaches, and the factors influencing these decisions, as well as the implications of ethical choices on stakeholders and the company's overall brand value. The report concludes with recommendations for transparent and ethical business conduct.

GOVERNANCE AND BUSINESS ETHICS 1
GOVERNANCE AND BUSINESS ETHICS
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Executive summary
The following report is based on the analysis of business ethics and understanding of the
operations of the New Zealand based company Cadbury NZ. The report focuses on the various
concepts of corporate social responsibility and the moral philosophies of the business, and the
process of the decision-making process. The report includes the ethical issues of the company
faced in the current market and the nature of the conflict. Various analysis like teleological,
deontological, and other contemporary theories are being conducted to understand the ethical
issues of the company. The study found out that there are various implications on the
stakeholders and other cross-cultural fundamentals. The study states that many things influence
the decision making process with regards to the ethical policies of the company. The report also
focuses on the implications of the alternative solutions that will be helpful to make the issue
more clearly to its customers and other businesses.

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Table of Contents
Introduction......................................................................................................................................4
Ethical dilemmas in the global environment...................................................................................4
Cultural ethics..............................................................................................................................4
Power distance;............................................................................................................................5
Individualist cultures and collectivist cultures;............................................................................6
Masculinity...................................................................................................................................7
Uncertainty avoidance;................................................................................................................7
Ethical decision-making approaches...............................................................................................8
Deontology...................................................................................................................................8
Utilitarianism...............................................................................................................................8
Rights...........................................................................................................................................9
Virtue...........................................................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

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Introduction
Ethics means the moral principles that an individual possess which he/she might have learned it
from the society or the people around him, basically when the term is added with the business the
term focuses on the individual employee or group of employees or departments which work
together to achieve a goal of the company, and the goal of the company is to make profit but in
order to achieve that goals the company follows some principles which add value to both the
company and its customers(Leonard, 2018). Business ethics means the cultural values imposed
into corporate practices, which include the philosophical values of the culture. To deliver the
business to the customer better than the competitors in the market have a direct relation to the
ethical policies of the business which makes the business differ from the others and attracts
customers, it is invisible but visible as an outcome of the values followed (Ware, 2016).
The brief history of Cadbury New Zealand.
In 1824, Birmingham England, John Cadbury started selling tea coffee and drinking chocolate,
and from about 1831 he also began the production of the variety of cocoa and drinking
chocolates, which were produced in the factories of Bridge Street and were sold mainly to the
wealthy class due to the high cost of production. John Cadbury partnered with his brother
Benjamin Cadbury and the company was named “Cadbury Brothers." The Cadbury products
were introduced to Australia and New Zealand in 1853 in which three boxes were advertised in
Adelaide, and it was the first overseas order. In 1920 the first factory was build in Australia at
Claremont which was close to the supply chain of the fresh milk. Today Cadbury has three
factories in Australia which are located in Victoria, MelbCadbury'sne, and Claremont and one in
New Zealand which is in Dunedin

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Where the Ethical issue is prevalent and its relevance.
According to the survey conducted by department for environmental, rural and food affairs
(DEFRA) in 2007 half of the united kingdom customers replied that they won't purchase the
product which is offered by the company with the unethical practices and about 45% said they
could pay a premium price for the products which are manufactured ethically and contains no in
unethical practices followed by the makers of the products (Mackenzie, 2015). Cadbury
fortnightly announced it to join the fair-trade foundation along with the nestle and mars under the
cocoa program. But this programme doesn't take into account of the situation when some year
due to adverse weather conditions the quality of the crop may differ and none knows who
regulates this programs, even if the things are ethical how a customer is going to categorize
between the ethical and unethical products, while customers can only read the label on the
products and read on various websites that the products are ethically produced. Only fair-trade
product has a blue and green colored spot at the side of the package whereas others do not. As
the Utz certified labelling is volunteering activity in which nestle and mars are taken into no
obligations, where the experts believe that the industry giants must work together into this topic
rather than confusing it further, so there would be a day when the customers won't be able to
believe who is a genuine seller and how they treat their stakeholders, but in the end the farmers
will be the persons losing the game.

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Ethical decision-making approaches
Deontological
Is a set of arguments stating that individuals should follow their duties plus responsibilities while
involved in making decisions concerning morals (Konopka, 2018). Therefore one will trail
his/her duties to an alternative individual since upholding one's trust is the ethically precise one.
One of the restraints of deontology is that there are no logical bases of deciding an individual’s
responsibilities (Meyers, 2018). For example the lousy weather conditions effects on the cocoa
crops and the quality, instead Cadbury is backfiring on the Ghanaian traders with the thing that
they are charging 10 % more than the others in the market, whereas there is no minimum base
rate in the place which it stated in the program that says that the farmers are to be paid the
minimum pay rate unlike other developed countries which makes no sense of the regulations of
the program which is being implied in the place.
Teleological
The company has taken steps to help farmers. Önday (2015) states that the motive behind the
fair-trade certification was giving the farmers the fair price of the trade and the issues of the child
workers will be eradicated but the certification itself has much obligation to cover, as it is
unclear that the fair-trade organizations original intents to give the certification to Cadbury is to
reach the customer base or really it wants the fair trade to benefit the farmers of the cocoa.

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Contemporary
The moral in the implication of the certification of the fair-trade implies that the company main
aim was to eradicate the issue of the child lab Cadbury’s and the farmers would get the best fair
price which will give a positive impact on the customer as they see the company as a value and
the trust in the company will be established more firmly, which will help company to increase
their customer base.

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Discussion of the case
Cadbury Schweppes has a clear motive to serve the society and give back something to the
people and the customers, giving them healthy and standard products of diets as they market
their products for the children too, so they have to market it responsibly because of the vast
customer base across the world who prefer their products (Insch and Black, 2018). The
companies motive to give the farmers the best fair price is an initiative that most of the
companies have ignored or did not focus on it yet, but the Cadbury policies of the CSR are the
ground rules which they voluntary do. The primary purpose of the brand is creating a brand that
brings the people together.
The stakeholders of the company have effects if the company practices unethical ways of the
business as they are the people who together are the reasons for the success of the business and if
they uplift the trust in the company will result adversely for the company itself (Desai, 2017).
There are no apparent intentions of the company to exploit the farmers and Cadbury Schweppes
clearly states that everything is done ethically so despite the negative reviews on some web sites
it will not affect the whole business or there would be very negligible effects on the stakeholders.

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Cadbury NZ is a European based company which have business over the almost whole world,
which means the companies have been successful in implying the cross-cultural significance it
needs to perform the trade with the different types of countries with different culture and
background (Chang, 2018). At the point when enrolling staff, Cadbury Schweppes is enthusiastic
about empowering differing qualities in the working environment. It along these lines supports
applications from an extensive variety of individuals. More outstanding assorted qualities in the
working environment supports diverse methods for taking a gander at and taking care of issues
and may prompt more prominent imagination. The primary market from where the Cadbury
Schweppes purchase the cocoa is the Ghana which is an African country, so no matter of doubt
that it would take any decisions which are going to affect the leading suppliers of the cocoa.

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The ethical decision-making process used in the issue.
Cadbury has shown a perceived sense of responsibility towards the supplier i.e., the farmers, as
the entire decision is taken is going to affect the farmers only, which is going to add value to the
company (Chang, 2017). The willingness to introduce an open system which Cadbury has done
by joining the fair-trade implications which will give the fair prices to the Ghanaian farmers for
the cocoa (Power, Di Domenico, and Miller, 2017). Cadbury Schweppes has given their first
preference to the farmers by joining the Fair-trade policy which is going to benefit to the farmers
in order to meet their vision statement that says that the bringing the brand together that people
love.

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The factors influencing the ethical decisions in Cadbury NZ.
According to Bothara (2018), the factors that influence ethical decisions can be categorized into
two factors, namely: individual and situational.
Individual.
The decision of joining the fair-trade is going to influence the company's internal stakeholders
and the future market of the confectionary industry, as Cadbury Schweppes is the leading brand
in the industry and taking the policy of giving the fair price to the farmers is going to influence
on its customers too as they see the company as a value, and it is more important that the
decisions the company takes are going to affects its value in the market which is going to help it
to gain more customer base.
Situational.
The negative remarks that the company was getting was that the Cadbury Schweppes is selling
the products which include the lab Cadbury’s of a child which is unethical, Cadbury took this
matter into hand as it a severe allegation over the company and company have to find a solution
to maintain the values of the company, so the company took the decision of introducing the fair-
trade principles to its products which will give fair price to the farmers and will eradicate the
child lab Cadbury’s issue.

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Conclusion
The Fair-trade policy must state clearly the regulations for all the applied situations.
Furthermore, Policies should be transparent so that the customer can also understand. , so the
customer does not get confused over the identification that the product he is buying is produced
ethically. The Cadbury Schweppes took a decision to join the fair-trade organization which was
taken to eradicate the child labor and give the farmers the best price for the trade and was
reviewed negatively by various experts due to not understanding the facts that the company have
considered to imply the principles, but the analysis clearly states that the Cadbury Schweppes
has taken decision in order to increase the value of the company by increasing the value of the
supply chain, by giving the farmers fair-price and labelling the products that the products of the
Cadbury are 100% ethical and no exploitation of environment or human resources is done to
conduct the business, as the policy of the company is to bring the brand to people which brings
the value and standard. Thus, the ethically Cadbury is the peoples best and loyal brand which
does the business ethically.

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References
Bothara, R., 2018. The Global Health Classroom: Collaborative Global Health Learning
between New Zealand and Samoan Medical Students in a Virtual Classroom (Doctoral
dissertation, University of Otago).
Chang, A., 2017. Disclosure standards of large New Zealand companies: a content analysis study
of compliance with the FMA’s corporate governance guidelines.
Chang, A., 2018. Analysis of corporate governance compliance standards in New Zealand–a
qualitative study on disclosures using content analysis and interviews. Journal of Financial
Regulation and Compliance, 26(4), pp.505-525.
Desai, P., 2017. A study of corporate governance and corporate social responsibility practices in
selected health care organizations Issues and challenges.
Insch, A., and Black, T., 2018. Does corporate social responsibility cushion unethical brand
behavior? Insights from chocolate confectionery. Journal of Public Affairs, 18(3), p.e1853.
Konopka, R.M., 2018. If you think about it more, do you want it more?: the impact of heuristic
and deliberative information processing on consumer preferences for ethically endorsed
products: a thesis presented in partial fulfillment of the requirements for the degree of Doctor of
Philosophy in Marketing at Massey University, Palmerston North, New Zealand (Doctoral
dissertation, Massey University).
Leonard, P.G., 2018. Social licence and digital trust in data-driven applications and AI: a
problem statement and possible solutions. Available at SSRN 3261228.

GOVERNANCE AND BUSINESS ETHICS 14
Mackenzie, M.J., 2015. Corporate social responsibility in the New Zealand hotel industry: An
explorative study (Doctoral dissertation, University of Waikato).
Önday, Ö., 2015. The Relationship between Concepts of Corporate Governance, Business
Ethics, and Corporate Social Responsibility: Situation on World and in Turkey. Weber Business
Management.
Power, S., Di Domenico, M., and Miller, G., 2017. The nature of ethical entrepreneurship in
tourism. Annals of Tourism Research, 65, pp.36-48.
Ware, D., 2016. High Expectations: What shareholders and directors expect from New Zealand
public company boards.