Business Ethics Report: Costco's Ethical Theories and Consumer Rights

This report examines the business ethics of Costco, a multinational wholesale company. It begins with an introduction to the company and its practices, followed by an analysis of five key ethical theories: meta-ethics (cognitivism and non-cognitivism), applied ethics, moral psychology, descriptive ethics, and stakeholder theory, and how these theories relate to Costco's operations. The report then explores consumer rights, including the rights to basic needs, safety, information, and choice, and how Costco adheres to these rights in its production and sales. Finally, the report provides recommendations for Costco to improve its ethical practices, particularly in areas such as video advertising and working environment, to maintain consumer trust and adhere to governmental regulations. This report aims to provide a comprehensive understanding of Costco's ethical framework and its implications.

BUSINESS ETHICS

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Table of Contents
1. Introduction..................................................................................................................................3
2. Ethical Theories........................................................................................................................... 3
3. Consumer Rights......................................................................................................................... 5
4. Recommendations........................................................................................................................8
5. Conclusion................................................................................................................................... 9
Reference List................................................................................................................................ 10
No. Assessment Criteria Weightage Marks
Allotted
a.
Ethical Theories
 Ethical Theory 1
 Ethical Theory 2
 Ethical Theory 3
 Ethical Theory 4
 Ethical Theory 5
10%
10%
10%
10%
10%
b. Consumer Rights
 Consumer Rights 1
 Consumer Rights 2
 Consumer Rights 3
 Consumer Rights 4
5%
5%
5%
5%
c.
Recommendations
 Recommendation 1
 Recommendation 2
 Recommendation 3
 Recommendation 4
 Recommendation 5
6%
6%
6%
6%
6%
Total marks 100%
Overall marks 50%

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1. Introduction
The main topic of this assignment is business ethics, and it is called the implementation of the
proper business policies as well as practices in an organization. The chosen multinational
company for the assignment is Costco which is located in the United States of America. This is
wholesale and a multinational company. This company provides a wide selection of merchandise
and has expanded all over the world. The company first came into existence in 1976, and at that
time it was named as Price Club. The location at which this company first came into existence
was San Diego. It is functioning over 206 sites and generating billions of dollars every year.
In this company, the businesses regarding daily commodities are done and with a proper level of
services are also offered by this company. There are some ethical practices which are done by
the company and are explained below. This company also is competing with four consumer
rights in production as well as for selling purposes which are also described below. The
recommendation is also provided on how the company can manage business practices using
ethical considerations.
2. Ethical Theories
In this ethical theory portion, five major ethical theories are mainly analyzed and described, and
it helps Costco to fulfil its goals by influencing and persuading goals. These theories are,
Meta-ethics: It is primarily divided into two parts. First one is Cognitivism, and another one is
non-Cognitivism.
1) Cognitivism: According to this Ethical theory, an organization is maintaining the ethical
practices orders its organization by its tag line sentence (Beckerman, 2017). This correct
sentence is mainly described as a good face of a domain existing independently of its
subjective thoughts and feelings. This ethical practice is most typically to try to support
its position by way of seeking out analogies between the moral discourses.
The tagline of Costco is simplifying home and Life. This company maintains its slogan based on
their services. The service process of this company is straightforward and easy to use (Enoch,
2017). Costco is mainly a retail organization, and it offers online and offline services for its

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customers. It also maintains a suitable and sufficient online buying product facility for its
customers. This satisfies its tag line, and it also provides quality services for its customers.
2) Non-Cognitivism: A non-cognitive theory of ethics suggests that moral sentences are
neither genuine nor bogus; that is, they need truth-values. What this implies will be
examined by giving a short coherent phonetic investigation clarifying the diverse
elocutionary faculties of standardizing sentences.
The tag line of this company indicates that its services will help its customers to enjoy the least
difficulties for buying products from Costco and they can maintain this. The examination will
comprehend how regularizing sentences assume their appropriate job even though they need
truth esteems, a reality which is covered up by the uncertain utilization of those sentences in their
language (Białek, Turpin and Fugelsang, 2019). It is seen that as per the services of Costco they
maintain its tag line and provide services indeed as per its tagline.
Applied ethics: It attempts to use philosophical methods to identify the morally correct courses
of actions in various fields of Human. Applied ethics is mainly a general ethical theory to the
moral problems based on the solving problems of an organization. It is also essential for an
organization to maintain ethical practices under its organization.
Based on the Costco business procedure, it is seen that this company is maintaining every ethical
practice under its organization (Costco.com, 2020). This process helps this company to work
with efficiency and also create a good impact on customers' minds. Costco is also called the
testimony to ethical capitalism. Costco maintains a code of ethics under its organization, and it
helps this company to connect with a considerable number of customers.
Moral Psychology: It is mainly a study of moral identity development, and it also deals with
people's integrated noble ideals with their progress (Franczak, 2018). It has played an essential
role in the decision-making portion of an organization or an individual. This ethical practice
stands as a significant obstacle as not using any unethical practices under an organization.
Costco is mainly providing daily use commodities under its organization, and it also provides
quality services for its customers. It is seen that it allows for moral support to its employees to
face any challenges it stands in front of (Chudárková, 2019). An organization needs to maintain

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proper growth of efficiency in its employees. The guideline prepared by this company for its
employees helps employees to maintain a suitable ethical practice for its employees. This
company obeys the governmental rules and regulation. It takes care of its internal and external
stakeholders and respects its vendors.
Descriptive Ethics: It is also known as comparative ethics. It is associated with the ethics that
are mainly prepared to fulfil the only company's aim. Any people's benefits are not covered
under these ethical practices. This describes people’s moral beliefs, claims, and behavior etc.
It is also seen that Costco maintains every code of law under its organization, and nothing is
hidden in between Costco and its customers. It also must be ensured by the management team
they are providing necessary information about its products that are launched by this company
(Heras-Escribano, 2019). It also offers suitable and practical plans for its organization. In this
launching process, this company is providing necessary information that is necessary for a
customer. This information helps customers to get an overview of the ingredients needed to
prepare these products.
Stakeholder theory: As per this this theory, it is required to understand the needs of the
stakeholders and provide them that while staying within ethical consciousness. For example, in
case of Costco, the company cannot provide something without profit to the customers as then it
has to reduce the supplier’s profit. Thus, maintaining ethics while doing business with all
stakeholders is important.
3. Consumer Rights
This is called as the practice in which buyers are generally protected of all goods and services.
This is also called as the process in which the public is retarded to make unfair practice in the
market (Marušić and Schwenkler, 2018). These are laws which are regulated and Acted by a
company to have a peaceful business in the market. Here are some consumer rights are there,
which is practised by Costco in producing and selling the goods and services.
Rights to Basic Need
This is a consumer act in which especially gives the surety of the decent living as well as
survival. Proper food and drinking water, clothing and health care with appropriate sanitation are

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the need to survive properly. This is called to be a right of the consumer in which all
commodities and proper thing for the survival are available at meagre prices (McPherson and
Plunkett, 2017). This is an Act which is followed by Costco and us due to a large number of
people in the U.S. this company is selling all products which are needed for survival.
In our daily lives, it is essential to have foods, proper clothing, shelter as well as drinking water
and sanitation. Costco offers these things with the sell of daily commodities in which this
company is following the consumer Act, which is rights to a basic need. It needs to be developed
as the company sells the product which is used by people in their daily lives. The company needs
to follow this consumer rights Act properly to adhere to problems. The process at which this
company offers things is also quite affordable and irresistible.
Right to Safety
This is called to be one of an essential Consumer Act, which is followed by the companies. The
main aim of this Act is to make defence and to make proper security for the things (Moore,
2018). A time comes in which products or items sold by a company can cause harm to the
customer, which can be dangerous and hazardous. For this reason, there is some method in which
prescribed things need to be sold by a company. There are many commission and laws are there
which are followed by many companies to provide proper security and compliance. This Act
establishes a test for the products and performance as well as the standard level is also
maintained.
Costco Company makes use of this Act in its products and services, mainly for the betterment of
the company and proper safety measures to be maintained. This company follows this to a high
level which makes this company reach its peak. Every consumer wants adequate strategy in the
commodities and services and which is ethically maintained by Costco. This made the company
more famous and viable.
Right to Information
This is called as other consumer rights, which states that in business, it is essential to provide the
consumer with proper instruction about services as well as products. The information which is
presented in a business needs to be accurate and correct as this is very important (Pölzler et al.
2020). It leads people to have adequate information and a proper level of protection under the
mismanagement of finance and advertisement by the company.

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Costco Company follows this Act to provide people with adequate information and maintain
public choices to be the last. These companies from the 90s have been a trustful and a right
business service provider with different types of a commodity by following this Act.

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Right to Choose
This is a consumer rights Acts in which consumer gets a variety of options from a company
regarding products as well as services (Costco.com, 2020). There are various laws and
regulations are there which enacts in this Act. The Act mainly revolves to give the consumer to
make their own choices.
This is an Act which is also followed by the Costco Company, and due to the demand of the
company have also risen (Villalobos and Dewhurst, 2017). It makes plenty of offers and services
to be provided, and the consumer has a lot of choices.
4. Recommendations
● It is recommended for Costco to maintain a suitable and sufficient process in its video
advertisement. In this video advice, this company must be provided with necessary
information about its products. It helps customers to get an overview of the utility of the
products and contains all of the ingredients that are used to prepare these products.
● In case of future study, it is discovered that Costco is not providing the necessary
information about the products. It has some drawbacks and creates an adverse impact on
consumers ' health. In this position, this is creating a negative impact, and it is creating a
profound negative effect on the goodwill of Costco.
● This company must maintain a suitable and productive working environment under an
organization. In case this company does not support the governmental laws and
regulation under its organization, it creates a profound negative impact. It also must be
ensured by the company that it maintains every administrative norm.
● In its new advertisement, this company must provide information about the product or
products that are being sold by this company. In case the advertisement department fails
to maintain this, the overall organization is facing business barriers.
● It is seen that this company maintains the applied ethics in its organization, and this
process provides a suitable and productive working environment under its organization.
This company must be maintaining proper ethical practices for employees.

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5. Conclusion
It can be concluded from the above assignment that many ethical aspects are considered for this
company. This consideration is for a proper level of business practices in Costco. The ethical
theories which are found over here for better business practice to be done in Costco. There are
also some consumer rights that are used by the company to provide better services and selling.
The recommendation is given to have proper ethical consideration which will help the company
to maintain an appropriate measure. The ethical theories which are considered for better business
practices are meta-ethics, Cognitivism, non-cognitivism, applied ethics, moral psychology and
descriptive ethics. These are one of the ethical considerations which are done.

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Reference List
Beckerman, W., 2017. Economics as applied ethics: Fact and value in economic policy. Springer.
Białek, M., Turpin, M.H. and Fugelsang, J.A., 2019. What is the right question for moral
psychology to answer? Commentary on Bostyn, Sevenhant, and Roets (2018). Psychological
science, 30(9), pp.1383-1385.
Chudárková, P., 2019. Moral Intuitions from the Perspective of Contemporary Descriptive Ethics.
Debora, L.M., 2017. What is safety?: Miracles, benefit‐risk assessments, and the “right to
try”. International journal of clinical practice, 71(7), p.e12966.
Enoch, D., 2017. Non-naturalistic realism in metaethics. The Routledge handbook of metaethics,
pp.29-42.
Franczak, M., 2018. Human rights and basic needs: Jimmy Carter’s North-South dialogue, 1977–
81. Cold War History, 18(4), pp.447-464.
Heras-Escribano, M., 2019. Pragmatism, activism, and ecological psychology: towards a unified
approach to post-cognitivism. Synthese, pp.1-27.
Marušić, B. and Schwenkler, J., 2018. Intending is believing: A defence of strong Cognitivism.
McPherson, T. and Plunkett, D., 2017. Nature and explanatory ambitions of metaethics.
Moore, J., 2018. Isonomy, austerity, and the right to choose counsel. Ind. L. Rev., 51, p.167.
Pölzler, T. and Cole Wright, J., 2020. An empirical argument against moral non-
cognitivism. Inquiry, pp.1-29.
Villalobos, M. and Dewhurst, J., 2017. Why post-cognitivism does not (necessarily) entail anti-
computationalism: Adaptive Behavior, 25(3), pp.117-128.
Website
Costco.com,2020. About us: www. costco.com [Accessed on 31st July 2020]