Ethically serving stakeholders

by The Times 100 on Monday 1st March, 2010

We hear the term ethical behaviour but what does it mean exactly? The Co-operative Group has members rather than shareholders who determine the ethical direction of the business. For example, it has an ethical food policy which has resulted in such things as reformulating its own brand products to reduce salt, sugar and saturated fat which is better for health reasons. It supports projects such as the Street Games charity which promotes sport to disadvantaged children and therefore giving them a chance to get involved in opportunities they would not have otherwise had. Members of a business influence the decisions that are made by managers in the organisation, and make sure they are underpinned by the core values – equity, self-responsibility and democracy. By adopting policies which ensure the business is doing the right thing both with its internal and external stakeholders, The Co-operative is a sustainable organisation with a distinct competitive advantage.

Many other organisations have also benefited from behaving in an ethical manner. One of these is the Malilangwe Wildlife Reserve in Zimbabwe. Despite its chequered history, tourism in Zimbabwe is growing. Tourists can stay on the Pamushana Lodge which overlooks the 40,500 hectare wildlife reserve. The reserve is owned and run by the Malilangwe Trust which reinvests its profits into conservation in the area. As a result, its Rhino population has increased and roan antelope were reintroduced. The camp works closely with local communities. It supports projects which benefit over 10,000 people in surrounding villages. These projects include education programmes, a health clinic and the provision of porridge to 25,000 under-8s –-the only meal that many of them will receive each day.

Thanks to the relationship it has developed with the local communities, the wildlife reserve has been generally left alone by poachers; a problem that blights many other wildlife reserves. This has had the knock-on effect of it being able to provide the kind of safari experience that attracts more and more visitors, showing that the costs of ethical behaviour can be far outweighed by the benefits. (The Times 27th February 2010)

Questions

  1. Define the term 'business ethics.'
  2. Give examples of ethical issues.
  3. Analyse the costs and benefits of behaving ethically.
  4. Devise a questionnaire for your peers to find out their views of different ethical considerations, then use your findings to make recommendations to an organisation of your choice.

Answers to questions

  1. Define the term 'business ethics'. Business ethics is concerned with whether the decisions made by organisations are morally right or wrong.
  2. Give examples of ethical issues Examples could include: Should products sold be Fairtrade? Should child labour be used? Is it acceptable to use bribery to secure a contract? Should cosmetics/medicines be tested on animals? Should organisations donate money to charity? Is it acceptable for employers to spy on their workers?
  3. Analyse the costs and benefits of behaving ethically Benefits: Gains competitive advantage, Can attract more customers, May attract workers, Can encourage investment, Can improve the organisation's reputation, May prevent undesirable pressure group action and media coverage Costs: Ethical behaviour may restrict some business practices, Costs of labour, raw materials and finished products may be higher.
  4. Devise a questionnaire for your peers to find out their views of different ethical considerations, then use your findings to make recommendations to an organisation of your choice.

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