Business ethics. Assignment 2 PDF

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1. Ethics has been known as the study and philosophy of human behaviour, with an emphasis on figuring out what is right or wrong (Ferrel, Fraedrich and Ferrell, 2011). Ethics handles a portion of the principal inquiries of human life: How should individuals live and What should individuals do specifically circumstances (BBC, 2014). An ethical issue more often includes contrast between values or principles that guide our recognition what is right or wrong (Valasquez, 2012). Ethical issue is a problem or circumstance that requires an individual or business to pick between choices that must be assessed as right (ethical) or wrong (unethical) (Ferrel, Fraedrich and Ferrell, 2011). Example, should companies gather customer data and sell it, should companies monitor and track employess all the time etc. After watching the video there were some ethical issue which I can identify:  Child labour  Exploiting workers by giving less salary and long working hour  Health and safety risks of workers  Environment degradation 2.The broad view of CSR means that apart from business primary objective of profit maximization, it has some responsibilities towards society and people where it operates and the community or people who gets affected by its negative business practises (Valasquez,

2012). Corporation not only has responsibility towards shareholders but also it has responsibility to some other parties that affect or get affected by its behaviour and this includes all other parties that have a stake what company does or does not do (Shaw et al., 2016). Example, Woolworth plans of reduction carbon emission by 10% below 2015 by 2020 supports broad view of CSR (Woolworth, 2017). Another example, Coles has partnership with national cancer charity Redkite. Redkite supports children and young with cancer and Coles has contributed $26 million of their profit till now for Redkite (Coles, 2017). The period of 1960s and 1970s were the awareness and issue eras of broad view of CSR. That was a time of changing social consciousness and recognition of social issue, association in community affairs, rectification of racial discrimination, reduce urban pollution and focus on social contribution of business (Carrol & Shabana, 2010).The strong supporter of broad view of CSR Keith Devis says that ‘Business is not self-enclosed world, it activities have deep ramifications throughout our life and it’s hard to escape from its influence in our life’. So, for their broader ramifications and influences in our life, they should take some responsibility (Smith, 2011). In a nutshell, broad view of CSR tells that because of business social and economic power in our society. It has duty beyond enhancing profit.

3. Narrow view of CSR illustrates that corporation has only one social responsibility to maximize its profit within the rules of the game and

corporation should not be forced to take public responsibilities that clearly belong to government (Valasquez, 2012). Business has no responsibility other than maximizing its profit for shareholders and management has only one responsibility is to protect the interest of shareholders, apart from that business has obligation that is obeying the rules of the game (Shaw at el., 2016). The concept of narrow view of CSR begins with the late classical economist Milton Friedman. The strong supporter of narrow view of CSR Milton Friedman argued that ‘Business has only one responsibility and that is maximize profit for its shareholders, social issues are not concerned of business and these social issues can be solved by the unflattered working of free market economy (Carroll & Shabana, 2010). At the end, it can be said that narrow view of CSR gives business only one responsibility to maximize profit and one obligation to play according to the game rules.

4.The clothing retailers who buy goods from the Indian factories taking narrow view of CSR. In video, I watched that the factory owners of India do not pay fair wage to workers, factory working condition is really bad, factories do not have proper sanitation for its workers, child labour is common in factories and most of the factories are in slum with no good structure of proper factory. In broad view of CSR business takes responsibility beyond mazimixing profit, business take responsibility to other who affect or get affected by its action. If retailers take broad view of CSR then as an important stakeholders it

will take some responsibility for the garments worker like ensuring minimum payment of workers, working safety and ban child labour. They do not take any responsibility for the affect stakeholders which clearly support narrow view of CSR. 5. The invisible hand argument has been given by Adam Smith in his book wealth of nation, in his book he illustrates that in a free market people /organization must be left free to promote their own selfinterest and in doing so they will be guided by an invisible hand which will led to enhance greater good (Tran, 2015). Corporation needs to be left free for doing this, as they are not moral agents and they should not be invited to fight for racial discrimination, poverty or pollution, share corporate profit, lower product price etc. (Shaw et al., 2016). Example, suppose society wants fuel efficient cars. As a result, profit seeking companies will come to make fuel efficient cars and competition between companies will led to lower prices, improved quality and efficient variety of cars. The government does not need to involve itself in this matter, since the needs of society are automatically met and The competition and self-interest act as invisible hand that regulates the free market. Today’s corporation bears little to no resemblance to corporation which were existed in Adam smith time (Shaw et al., 2016). Today’s corporation has more economic power, control over government and our life than ever before (Shaw et al., 2016). For example, California deregulated its energy sector to enhance competition and gave a chance to invisible hand to operate. Instead of cheaper price of electricity, California got

electricity blackouts and higher prices because of companies dexterously and greedily manipulated market (Shaw et al., 2016). 6. The broad view of CSR shareholder and the corporation model argues that corporation has obligation beyond its shareholders and to all stakeholders who get affected by its actions, therefore, except shareholders its obligation encompasses employees, suppliers and environment etc. (Ferrel, Fraedrich and Ferrell, 2011). Moreover, management has fiduciary obligation to all of its stakeholders as well, for example, to employess, investors and consumers. Making money for shareholder is a real duty, but this does not trump all of a company’s other responsibilities (Shaw et al., 2016). For example, suppose someone promises a person to meet in a place for lunch at a certain time which creates an obligation, but that obligation does not ignore one’s duty to assist someone having a heart attack. Another example can be, manager of corporation for maximizing shareholders profit, they just cannot invest anywhere which will affect the ecosystem of environment and pollute the society (Adani coal mine project in Great Barrier Reef). On the contrary, critics of narrow view illustrate that management has a fiduciary duty for enhancing shareholders wealth, any other duty and social responsibilities are inconsistent with maximizing profit (Shaw et al., 2016). Milton Friedman argues that shareholder will select the managers for serving them like private servant but when managers don not serve the shareholders they act like public servant (Shaw et al., 2015). For example, if manager spends money of companies for social issues

then it will seem that they are forgetting the bottom line of maximizing profit for shareholders and instead of acting private servant, then they will act like public servant. 7. The invisible hand argument illustrates that corporation should be left free to promote their self-interest and by doing this they will be guided by an invisible hand which will lead to greater good for society (Shaw et al., 2016). In the documentary, retailers and factory owners are promoting their self-interest and but it failed to ensure greater good for the society. Employees, society and environment which are important stakeholders left behind without greater good. Longer hour and lower pay to employees, child labour, safety of employees and causing harm to environment which came up with the documentary and as important stakeholders they depried of greater good and no invisible hand came to give greater good to them. The criticism of invisible hand is consistent with programme. 8. if we relate shareholder and corporation model with the programme, then we can see that retailers as a corporation and managers of those corporation succeed to fulfil shareholder obligation but it fails to fulfil obligation to other stakeholders such as employees, society and environment etc. longer hour works, working condition, pay rate, child labour and factory in slum area cleary indicates violation of obligation of important stakeholders. The critics of shareholder and corporation model say that managers has fudiciary duty to maximaze shareholder profit and their other obligations are inconsistent with it.so, if we relate criticsm of the model with of

programme, then we can see that manager succeed in fulfilling their fudiciary duty to shareholders and they did not take any other responsibility beyond that.

9. Ethic of care defines that we have special obligation to exercise care to some people with whom we have valuable relationships and particularly to those who are dependant on us (Velasquez,2012). Ethic of care theory developed by feminist writer such as Carol and Nel Noddings, this approach motivated by the thinking of men and women (Shaw et al., 2016). The main idea of this theory lies that the well-being of an individual is dependent on the well-being of community (Shaw et al., 2016). Example, if in a community the unemployement rate is higher then, there will be higher robbery and crime which will lead to affect every individual in the community. On the contrary, if every individual who are employed share some of their income to support the unemployed people then, here will not be increase of crime and robbery and individual can live peacefully in the community. If we analize ethic of care we can see that broad view of CSR is ethical. We can apply ethic of care in particular case to see how it works. David jones has ethical sourcing strategy where they

source there product from companies who treat their employees ethically and take role to introduce code of conduct in factories for stoping workers exploitation and child labour (David Jones, 2017). David jones once a year seats with their stakeholder to measure the performance and update the report of their strategy and policies (David Jones, 2017). We can assess David jones work in the light of ethic of care:  Is justice being done? David Jones is trying to improve workers life and by doing that they are trying to create more just in the society. The workers who work in factories and make cloths for David Jones will not be underpaid, nor they need to work in unsafe condition (Shaw at el., 2016). Some people can argue that workers are being treated unfairly and coerced to sing the contract. However, in this matter David Jones gave them notice and choice before signing the contract (Shaw et al., 2016)

 Is equality being achieved? If the workers are getting fair wages and safe working condition then, they are getting the same facility in other parts of the world where workers are protected by employment legislation (Shaw et al., 2016).  Empathise-put yourself in ‘other shoe’ If the workers needed to work long hours in unsafe working condition and they had no possible alternatives then, they would feel cheated, frustrated, angry and exploited etc. But because of David jones initiative the workers are getting the facility like other workers around

the world., they will not feel cheated, exploited and frustrated etc. (Shaw et al., 2016).  What is the right thing to do? The right thing to do would be ensured when no one is exploited and to right any wrongs you can (Shaw et al., 2016). People in power are well placed to make the change and when more retailers like David Jones make the step, customers are ready to pay little more to ensure that workers are not exploited and manufacturers will stop and aware of consumers attention of ethical issue such as child labour and sweatshops then, here will be changing in business and other sectors (Shaw et al., 2017).  Is anyone suffering? The exploited workers are suffering but the David Jones designed ethical sourcing of cloths alleviate this of workers (Shaw et al., 2017)

If we apply broad view of CSR in David Jones case then, we can identify that social responsibility of business covers all the concept of ethical of care and other ethical issues. So, we can say that broad view of CSR is ethical. 10.A professional is an individual who has specialized knowledge commonly acquired through year of study in university, gradual professional improvement and moreover, usually member of a professional association and they are bound to follow code of conduct of the association (Shaw at el., 2016). Moral obligation is one type of behaviour which might affect human living standard and it gives

priority over other obligation like self-interest (Shaw at el., 2016). Moral obligation is not legally bound, but it’s a duty which one owes and one ought to perform (Valasquez, 2012). More obligation exixsts for professionals because they have specialized knowledge in their field, the specialized knowledge where society dependens on it and they have influence over stakeholders (Shaw et al., 2016). In the video, the retailer and manufacturers are the business professionals. They have huge influence over stakeholders such as employees, environment and community. In this video, it came out that these professionals are not fulfilling their moral duties, for that reason workers are being exploited, child labour used in production and harmed the environment. I believe that professional can make a difference in Indian workers life, as they have special power and influence over stakeholders and society, so if they fulfil their more obligation and do not give priority of self-interest then, no workers will be exploited, child labour will not be used in production and damage of environment will be minimal....