Ethical Challenges and Leadership Strategies: Ladbrokes Company Report

This report provides a comprehensive analysis of the ethical challenges faced by Ladbrokes, a company operating in the gambling industry. The report begins with an introduction to business ethics and then delves into the specific issues faced by Ladbrokes, including the introduction of Fixed Odds Betting Terminals and their impact on various stakeholders such as employees, customers, owners, government, and communities. The report examines both good and bad ethics within the company and offers recommendations for more ethical business operations. Part 2 applies utilitarian and Rawlsian theories of social justice to the case study, discussing how these theories relate to the company's practices and suggesting improvements. Part 3 includes a reflective essay on ethical leadership, discussing its meaning within an unethical organizational culture and how ethical leadership can influence business activities. The report concludes by emphasizing the importance of ethical leadership and the need for companies to prioritize ethical practices to ensure sustainable business operations.

Report

INTRODUCTION
Ethics can be describe as a major principles that includes behaviour of person while
conducting any activity. It refers to the set of rules and regulations that should be followed by
company in order to conduct its business activities in effective manner (Bowie, 2017). Business
ethics are the set standards for a company in which they should perform its operations for
maintaining safety and security of customers. This will help in performing business function and
offering services which does not harm to society and its citizens. Chosen company for this report
is Ladbrokes which is dealing in gambling industry. This company was established in 1886 and
its headquarter is located in London, United Kingdom. This report includes the major issues
faced by company as well as role of biz in the society. It consist of good and bad ethics and
different theories is respect of organisational issues.
PART 1
Report based on selected company.
Issues:
There is some major issues faced by Ladbrokes company which has affect its business
process. It is very important for company to analyse as well as evaluate this issues clearly in
order to improve its business activities as well as performances (Trevino, and Nelson, 2016).
This company is dealing in gambling industry and conducting various unethical business
practices. It is affect society as well as citizens. In 2001 betting shops such as Ladbrokes has
introduced Fixed odds betting terminals which is a super slot machines. In this a punters can
either win big or lose big. Earlier bets can be up to £ 100 in every 20 seconds. This was
affecting lives of many people so government has taken as set limit he number of maximum and
set it as £ 2. This has affected the business of Ladbrokes company and it was a huge loss of
betting shops (Sroka, and Lőrinczy, 2015.). Most of the shops has been closed in the gambling
industry. Respective company was also facing same issues as its majorly of shops has been
closed. According to the figure 5000 jobs has been loss and 1000 out of 1500 shops has been
closed (Pearson, 2017). This was a huge loss for Ladbrokes organisation which has direct
impact on its performance and profitability.
Role of biz in society:
1

Businesses play a crucial role in society as and it will have huge impact on consumers as
well as other citizen of society. There are different types of business which is providing various
types of products and services to customers. It is very important for these businesses to perform
its organisational activities in ethical manner and its product as well as services should not have
any harm to society. Ladbrokes company have number of negative impact on society as it was
dealing in gambling industry (ChellSpence, Perrini, and Harris, 2016). In this type of business a
punter can earn huge amount but there is equal changes of losing big also. As per the report,
Fixed Odds Betting Terminals is cracking the cocaine of gambling. There are various negative
impact of betting and gambling for society and citizens. People who are participating in
gambling activities are losing their job as well as family members in addiction of gambling.
Five stakeholders:
There are five major stakeholders which are effected by issues. Stakeholders of
Ladbrokes company are employees, customers, owners, government, communities. This issues in
gambling sector has huge impact on all of these stakeholders which could be direct or indirect
affect. Impact of this issue on each and every stakeholders is mention below in detail.
 Employees: Employees of Ladbrokes company have huge negative impact due to
changes in gambling industry. Most of employees has lost their job because of new rules
and regulation developed by government. There were approx 5000 job losses due to
closer of Ladbrokes company shops. Majorly of employees working in gambling industry
is unemployed.
 Customers: Customer who were addicted to the betting and gambling activities they
were majorly affected due to closer of majority of shops. This can be considered as a
huge loss for customers (Davies, 2016). Majority of shops has been closed because of
government rules so customers will not be able to use services of Ladbrokes company.
 Owners: Owner of Ladbrokes company has huge negative impact on it business due to
changes in government legislations (SA, 2015). This company was conducting its
business activities in gambling industry and in this most of the shops has been closed.
Respective company have to face huge financial loss due to government policies. This
company has lost and closed 1000 shops from 3500 shops and 5000 job losses. This have
big negative impact on respective company performance and profitability.
2

 Government: These changes are made by government rules and regulations.
Government and political party have to develop various rules and regulation for this
industry and losses of job as well as shop also impact the government. Gambling is one
of the important source of government finance as companies which are performing in this
industry were pay huge taxes to UK government.
 Communities: Communities and society were also majorly affected by changes of
government rules as well as closure of business in gambling industry (Strobel, Tumasjan,
and Welpe, 2015). This will have positive impact on society and different communities
as its was affecting lives of citizens. Due to betting up to £ 100, there was huge loss faced
by punters. This was not only financial loss but there were loss of lives also.
Good and bad ethics:
There are two type of business ethics in which one is good ethic and other is bad ethics.
There are various examples of companies which represent the good and bad ethics of business.
Recommendations:
There are various recommendations for companies for conducting its business operations
in more ethical manner (Rhodes, 2016). It is very important that company is following proper
rules and regulation of government in order to conduct its business operations in smooth manner.
Companies should provide product and services which does not harm to society and any
community.
3

PART 2
Two theories based on the selected company
Business ethics is defined as theory which is helpful in determining right from wrong by
emphasising on results and outcomes (Rawls, 1973). This is a form of consequentialism.
According to utilitarianism the most ethical choice is one which will produce greatest good for
greatest number.
Describe the theories
Utilatarian theory - Utilitarianism is defined as the theory which is based on the
consequences achieved through the acts which are beneficial for a large number of people. The
focus is on the betterment of the society instead of a single person (Secchi, 2007). There are
different kinds of features in this theory but the main objective is to maximize utility, which is
the concept of providing increased benefits and well being of people living in the community.
Rawls Theory of social justice – John Rawls is one of the renowned political
philosophers of twentieth century who has given so many ideologies regarding social justice. He
is recognised for justice as fairness theory that develops justice principles for governing a social
order. John Rawl has developed a conception of justice from the point of view of person who is
4

equal and free. Freedom of these individuals consists in possession of two moral powers, an
ability for sense of justice and conception of the good (Harsanyi, 1977). The sense of justice is
defined as capacity to apply and understand and act from public conception of justice. This
characterises the fair means of cooperation. The conception of good includes conception of what
is more valuable to people. The most important concept of Rawl is the concept of
comprehensive doctrine. This consists of various moral philosophies like philosophical and
utilitarianism. The moral conception is defined as comprehensive when this includes conception
of what is more valuable in human life.
Apply theory to the issues
In context of the given case of gambling in organisation, it is seen that this theory is
applied for providing people equal opportunities within workplace. This organisation needed it's
workers and employees to be happy and satisfied. On the other hand, Utilitarian theory is also
applied on the given case (Sen, 1995). This can be concluded in the way that this theory is
mainly for making other happy and providing welfare for the people in society. But this concept
used by organisation went wrong as benefit provided to people became problem for employees.
Suggest improvisations to the issue depend on theory
The recommendation made for the company is to provide employees welfare and happy
life but there must be no compromise with their job. Activities and initiatives taken to improve
employees must not harm them in future.
5

PART 3
Reflective essay on management of ethical leadership
What does ethical leadership management mean in an unethical organisational culture
Ethical leadership management is a kind of leadership which involves people to explain
them to differentiate between right and wrong so that common good can be determined which is
acceptable in different areas of my life. According to me, ethical leadership helps me to control
business activities in effectively and attainment of organisational goals. As noble quality of a
leader is leading by example (Ali Chughtai, 2016). For me as an ethical leader it is imperative to
remember that actions speaks louder than words. All individuals judge me by the way in which I
react and not from my words. Thus to have impact on my employees, I must speak by my
actions. I am able to earn respect from my subordinates by practising and demonstrating use of
honest, ethical and unselfish behaviour with my employees. I think that my workers and peers
will follow me only when I respect others and show integrity. Another role of mine being ethical
leader is concentrating on performance of ethics that includes ethical issues and standards and
the way in which these factors affects society. I teach my peers regarding ethics especially in
cases where there are ethical issues (Shapiro, and Stefkovich, 2016). For being a successful
ethical leader, I have to be a good communicator. There are different ways of communicating
with employees. Some feel comfortable while speaking in public. On the other hand, there are
some people who are hesitant in speaking with leader due to anxiety, fear or anxiousness. In
such cases, I have to make solutions so that all employees can communicate with me. For
removing this hesitation, I have given way of communication i.e. emails and messages. This is
helpful in providing open conversation. I am also building camaraderie with my team. I have
6

tried to maintain quality relationship that is based on fairness, trust, openness, integrity, respect
and compassion. I always try to build positive relationship with productive relationship with
three various elements such as individual, team and overall organisation. I nurture the
relationships at different levels and this leads to various benefits and outcomes. The main benefit
which this provides to employees is well being of individuals working in the company. It is
essential for me to maintain a positive atmosphere for being a strong ethical leader. I can
influence others to do effective work only when I perform extraordinarily. Individuals are
affected by interaction which occur around them (Lawton, and Páez, 2015). The main thing
which I focus on is positive communication among employees as this helps in job attitude and
job productivity. The ethical leadership includes managing conduct and collaboration within the
organisational teams. The morale of employees is higher when employee engagement is present.
When subordinates are working as a team, this is helpful in developing relationships in the
workplace. This also improves overall performance of the group. Thus I have to be ethical leader
while conducting business operations. Generally, it is seen that strong leaders can only lead by
becoming an example. The health of the organisation can be improved by becoming a ethical
leader. I am always trying to put my efforts in becoming a strong leader. My subordinates or
workers will follow me only when I have done an impressive work. I give respect to all
employees as this develops more positivity among us and creates good relationship. When
employees are showing respect for each other, value can be added for opinions of other people.
This is helpful in creating positive environment at workplace. If I want to develop an ethical
organisation, I have to ensure that all employees are working at workplace and possess mutual
respect. This place must motivate employees to grow personally and build friendship and
contribute in overall organisational goal. I have adopted the four V model while taking my
decisions at workplace. These V stand for Vision, Values, Virtue and Voice. By adopting all
these I can develop in myself a strong leader. The main goal of mine as ethical leader is to
develop bright and positive future. This must allow potential for all employees to pursue fulfil
the demands and needs and meeting the highest potential. Ethical leadership is leading in a
manner which is guided by an individual's moral compass and conscience, with regards for
feelings of others and consequences of future. According to me, ethical leaders lead with
integrity and can manage employees effectively. Ethical leaders include a daily process for
performing several small tasks and allowing these segments for playing in cases whenever
7

necessary. Being a ethical leader, I am people oriented, and I am aware about how decisions
impact other individuals. As a leader, I am able to use my power and authority for serving
greater good instead of self serving interests. This type of modelling is serving as guide an
motivator for other individuals and putting demands and needs of group ahead of my own. This
type of engagement is creating an intellectual and emotional commitment between employees
and leaders which is making both parties equally responsible for pursuit of common objective
(d’Adda, and Et. Al, 2017.). I am able to maintain integrity and compliance in an unethical
business environment. There are different managers and employees working within an
organisation. They have different perspective. I have to manage their working so that they are
able to achieve organisational goals effectively. I have developed different characteristics of
ethical leaders such as stimulating, inspiring, visionary behaviour and influencing. The ethical
leaders coach cohorts for gaining a sense of professional as well as personal competence that
helps me to excel and being loyal, resilient and profitable. The model which I follow includes
models of 4 V i.e. values, voice, vision and virtue.
Values – Ethical leadership begins with an understanding of and commitment to a leader’s core
values. I discover the values that make up core of identities and motivators. This includes
process of integration of unique values with different choices related to professional and
personal life.
Vision – Ethical leadership needs the capability of framing actions within the picture of what can
be done in order to provide service to others.
Voice – As an ethical leader, I am able to articulate organisational vision to employees in an
authentic way which is enlivening into action.
Virtue – I must work according to right manner and know what is bad and what is good. I
practice virtuous behaviour by asking my employees about vision, values and voice in alignment
with and supporting the common good.
References
Books and Journals
Ali Chughtai, A., 2016. Can ethical leaders enhance their followers’
creativity?. Leadership, 12(2), pp.230-249.
Shapiro, J.P. and Stefkovich, J.A., 2016. Ethical leadership and decision making in education:
Applying theoretical perspectives to complex dilemmas. Routledge.
Lawton, A. and Páez, I., 2015. Developing a framework for ethical leadership. Journal of
Business Ethics, 130(3), pp.639-649.
8

d’Adda, G., and Et. Al, 2017. Do leaders affect ethical conduct?. Journal of the European
Economic Association, 15(6), pp.1177-1213.
Online
The Importance of Ethical Leadership,2019.[Online]. Available
through:<https://www.theworkplacecoach.com/the-importance-of-ethical-leadership/>
CONCLUSION
From the above discussion, it is concluded that ethical behaviour of leaders within the
organisation is essential for improving the effectiveness of employee performance. Ethical
leadership includes analysing the core values and having courage for living these values in
service of common objective. The conduction of business in ethical manner will provide way of
achieving growth and success. It is essential for ethical leaders to reach potential investors and
valuable prospects which is pay-off of leadership. The evolvement of consumerism highlights
values and ethics of business in addition of services and goods. The ethical leadership provides
power for creating workplace community in which workers and employees are trusted for doing
jobs. When organisation meets specific level of moral misconduct, media is used for organising
campaigns.
9