Making ethical decisions

by The Times 100 on Monday 14th March, 2011

Following a request for assistance from Japan, the UK International Search and Rescue (ISAR) team has travelled out to Japan to search for survivors of the devastating earthquake and tsunami. The team of 59 search and rescue experts, four medics and two sniffer dogs has taken 11 tonnes of equipment, including lifting and cutting tools and specialist listening devices to help find those trapped under the rubble. The UK government has also sent further staff to the British embassy in Tokyo. Other international relief organisations, such as Rapid UK, are on stand-by to fly out to Japan if called upon. 45 other countries have search and rescue workers ready to provide aid. (BBC, 13th March 2011)

In the wake of disasters of this scale, governments and aid organisations around the world have big decisions to make. These decisions are concerned with 'doing the right thing'. Who should be helped first? How many people should be sent to provide aid and for how long? How much money should be dedicated to helping?

Ethical decisions, however, are not restricted to disaster situations. All organisations have a responsibility to society. In order to behave in an ethical manner, businesses must take into account what is considered to be 'right' for a range of stakeholders. Primark, for instance, is very clear about where it stands on business ethics. Its business principles underpin its operations and include respecting human rights, setting guidelines for appropriate conditions of employment in its suppliers' factories, and employing an Ethical Trade team to ensure its responsibilities are met. Ethical behaviour may incur additional costs to a business, but by taking a socially responsible viewpoint, organisations like Primark can benefit from building confidence in their brands, reducing risk and developing sustainable business practices.

Questions
1.Define business ethics.
2.Using the Primark case study, describe what is meant by its Code of Conduct.
3.Explain the costs to Primark of behaving ethically.
4.Evaluate the pros and cons to businesses of behaving in an ethical manner.

Answers
1.Define business ethics.

  • Business ethics are the rules of conduct and principles and patterns of behaviour in business dealings that involve 'doing the right thing'.

2.Using the Primark case study, describe what is meant by its Code of Conduct.

  • Primark's Code of Conduct is based on the International Labour Organization's Code. The Code provides a set of standards for international labour. These promote opportunities for women and men to work in freedom, equity, security and dignity. Primark's Code of Conduct has 11 points, including the agreement that child labour will not be used and that working conditions are safe and hygienic.

3.Explain the costs to Primark of behaving ethically.
The costs of ethical behaviour to Primark include:

  • Employing a global Ethical Trade team
  • Training buyers on all ethical trade issues
  • Managing and paying for external audits
  • Helping suppliers put right issues raised by the audits, through training and support from the Primark Ethical Trade team.

4.Evaluate whether businesses should behave in an ethical manner.
Arguments why businesses should behave in an ethical manner:

  • Stakeholders may expect organisations to have the same values as themselves.
  • It may be easier to attract customers, workers and investors.
  • Ethical behaviour may lead to more sustainable business practices.
  • It reduces unwanted negative media attention.

Arguments against businesses behaving in an ethical manner:

  • The costs to the business may rise.
  • Firms should only consider the owners/shareholders' needs, e.g. to create as much profit as possible.

Choice may depend on:

  • Whether competitors are also behaving ethically
  • How far stakeholders, such as customers, value ethical behaviour compared with other considerations such as price.

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