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Is a universal Code of Ethics for Global Business needed and is it Possible?

Discuss aboutt the Business Ethics and Sustainability for Social Media.

The management of the modern business entity will be judged by the actions taken in the course of doing business and the impact on the environment in which the business is operating. Ethics in business affects the decisions that will be taken by the management and the leadership of such organizations. Ethics in business is concerned with ensuring practices that will ensure best practices that are sustainable in the long term. Thus business ethics will ultimately lead to practices that are good and legal yet without a legal obligation. The business ethics will be closely linked to the shareholders and their rights, ethical issues affecting employees, impact in the environment and responsibility in production and sourcing. This holistic approach to business coupled with ethical decisions will lead to the business being run sustainably is a  universal ideal that requires a universal code of ethics for global business (Leach  2012)  and can be achieved as seen from the UN Global Compact principles of doing business.

The answer to the above question will be answered by holistically incorporating responses from several case studies as well as interrogating the application of theories on ethical business. The answer to the question is that there is a need for universal codes of ethics which are global and can be achieved by knowledge dissemination and training as well as setting minimum standards for doing business. The UN Global Compact is one such ideal code of conduct which can be applied universally. The principles that underpin the UN Global Compact will also be used as a reference point as to whether the ethical business theories espoused can be applied universally and the limitations that may arise. The case studies in consideration are taken from the book by Crane and Matten and are from chapters 3,6,7,8 and 9. The answers to the ethical dilemma posed by the case studies will be used as a consideration to answering the above question.

There are two theories that underpin the ethics that are applicable to business ethics. The first theory can be referred to as descriptive and attempts to give a description of the moral systems of a group of people or society. The descriptive theory involves research that is empirical that is undertaken on individuals and societies. The theory integrates topics that cover the relativism of moral systems, values, the concepts of right and wrong as well as ethical ideals (Jaunich 2012). The other theory is the normative theory that proposes to prescribe the correct moral way of acting while doing business (Crane & Matten 2016). These are the rules that help us to differentiate the concepts of right and wrong as well as answering two important questions: how are men expected to behave and what is the ideal good life for men.

Background Theories

There are several theories under the normative concept and include the ethical absolutism theory that was developed under the traditional ethical theories European philosophers. The ethical absolutism theory postulates that there are moral principles that are universally applicable to concrete contexts and situations (Fryer 2016). The consequentialist ethical theory bases moral judgment on the outcomes of an action that is taken. The corollaries attached to this theory are that right or wrong depends on the results of the action that is taken. Another theory is the utilitarianism theory that posits that an action is morally right if the outcomes will result in the greatest good happening to the greatest amount of people. The main corollary attached is that the goodness or badness of the agent is separated from the rightness or wrongness of the action. Other theories include the deontological theory, the virtue theory (Holland & Albrecht, 2013) and the ethical relativism theory.

The UN global compact has ten principles that are the foundations expected of companies that run their operations sustainably. These ten principles are expected to be incorporated into the policies, values and strategies of an ethically responsible business entity (UN 2017). The principles are broadly defined within four parameters which are: human rights, labor, environment and anti-corruption. The human rights parameter has two principles which are that businesses should respect and support international human rights and also ensure they are not complicit to the abuses of such rights.

Four principles fall under the labor parameter which is that businesses should recognize the right to collective bargaining for workers as well as the freedom of association.fro the workers. Another principle is that businesses should eliminate forms of labor which are compulsory and forced the abolition of child labor and eliminating practices of discrimination in respect to employment (UN 2017). Three principles under the environment parameter are that businesses should be cautious in their approach to environmental challenges while doing business. They should also be involved in initiatives that promote environmental responsibility and encourage technologies which are environmentally friendly. The anti-corruption parameter carries the principle of eliminating all forms of corruption, including bribery and extortion.

The background to this case study is the setting of production to manufacture the confectionery which is unconventional and uses child labor. While the previous manufacturer in Portugal operated a conventional workshop or factory, the Thai manufacturer has no workshop but rather outsources the work to families who work communally to produce the finished goods (Crane & Matten 2016). While the quality may be the same as the Portuguese manufacturer, there is an ethical dilemma raised as to the use of child labor. The dilemma is that from the point of view of the product manager, child labor is outlawed under the UN labor principles dealing with child labor. Based on the virtue theory, the manager feels guilt (Wang, Cheney & Roper 2016). while purchasing gifts for his nieces when imagining they could be in a similar situation as child laborers.

The UN Global Compact

The dilemma is compounded in that this practice is widespread and accepted within the Thai culture but is wrong from the culture of the manager. The theory of ethical relativism would allow the use of child labor in the Thai culture since this practice is right within their norms but the same would be wrong within the culture of the manager. Thus the need for a universal code of conduct would be needed to bridge the gap between what is accepted within one culture and another so that the universal code becomes the equalizing consideration as to what is morally right and acceptable.

The ethical dilemma in this case study is seen in the manager working for PCC in light of the confidential information that he has access to (Rossouw 2011). The information should be kept confidential and he has a moral obligation to keep the same. He can also use the discretionary information to sell his shares and make a profit out of this information. He is also under the dilemma of whether to inform his best friend who will potentially use the same information to also make a profit by advising his clients to dispose of the shares of PCC (Crane & Matten 2016). The theory of ethical absolutism is applicable in this context due to the right s and responsibilities expected of a shareholder.

The manager being a shareholder has a right to sell their shares to others while they also have the responsibility of not misappropriating nonpublic confidential information to trade their shares ( Petrick, Cragg & Sanudo 2011). The misuse of such information constitutes insider trading which is an absolute unethical and morally wrong. Coupled with the UN principles of anti-corruption, the insider trading is a considered form of corruption as well as there is an implied implicit form of human rights abuse to the other shareholders who are not privy to this information. Thus the need of a universal code that would prohibit and hold persons accountable who are engaged in such practices is needed.

The moral dilemma in this case is whether to use the information gleaned from the social media site Facebook and use it as part of the critical process to make the decision as to whether to hire the lady in question (Crane & Matten 2016). While the information from the social media site is not acknowledged under law (Beasley & Haney 2013) as being part of the interview process, it carries with it information that if ignored could impact the company negatively if negatively broadcasted by potential competitors. The use of the utilitarian theory would be applicable in this case as the decision by the human resource manger will produce the greatest good for the greatest number of people.

Case Study- Producing Toys; Child’s Play

This would include the company, the shareholders, and the people under the trial as well as for the current employees (Strand 2014). The decision to hire the applicant with lesser qualifications but deemed to have better moral values will thus result in greater good for more people. The need for a universal code of conduct in business that is ethical is needed so as to ensure that the use of social media can be used with discretion while protecting the right of workers to associate, more so during non working hours. The code would thus balance the right of the worker while at the same time ensure that the rights of the employer are not disregarded for their mutual good.

There are ethical issues involved when goods are labeled as organic from the perspective of the consumer. The organic label implies that the goods are produced in an ecologically sustainable and ethical way (Crane & Matten 2016). The implied ethics could be in relation to the treatment of the animals which is ethical and the use of crop husbandry practices which are ethically and environmentally sound. There is also the dilemma posed by the production of food organically as it carries long-term challenges of ultimately being more destructive (Crane & Matten 2016) to the environment through more land required to produce the same amount of food through conventional means.

The organic labeling also encourages certification of food that is fraudulent and misleading to the consumer. A consumer purchasing on the eco label might consume food contaminated with pesticides while paying a premium for a lie (Thompson 2015). The moral rights theory that gives the right to life and safety is a right that is often violated within the organic foods industry by the production of food which is unsafe and dangerous while at the same time degrading the environment (Zsolnai 2011). A universal code of ethical conduct in business would lead to certification that is also universal with the same quality expectations in every country of origin. This would eliminate unethical certification and outright fraud within the industry.

The ethics of sustainable sourcing is increasingly important aspect of doing business especially for companies that source for their raw materials globally (Akkucuk 2017). The case study on Uzbek goes to show that the use of raw materials that have been grown or sourced within practices deemed to be unethical is no longer acceptable (Crane & Matten 2016). Companies that are keen to do business ethically will endeavor to establish a chain along its different suppliers who do not infringe upon the minimum expected standards of doing business (Seay 2015). This may include not using child labor, use of forced labor or payment of wages which are considered as slave wages. This applies also to operations which are run as sweatshops in order to reduce the cost of production.

Case Study- “who cares whose Shares”

The Uzbek case study is important to show how more than 150 companies who are guided by a universal code of conduct decided to boycott purchasing Uzbek cotton in order to enforce change on production practices (James 2015). This led to the abolition of child labor below 16 years of age and which is one of the principles espoused under the UN Global compact. The principle of eliminating child and forced labor is underpinned by the consequentialist theory of certain outcomes following a particular course of action. In this case the use of child and forced labor had the consequences of Uzbek cotton being boycotted.

In conclusion, the need for a universal code of ethics for global business is needed in order to ensure that certain standards of doing business are respected across the globe. This will safeguard against differences of what is considered morally right or wrong in different societies as seen in the case study of the Thai manufacturer. The need is also seen in the expected rights and responsibilities of shareholders who are privy to nonpublic information and how to use it ethically. The need for standardized code of ethics for employers is also seen where a code of conduct in the hiring process will result in the greatest good for the greatest number of people. The need for a universal code is not only needed but possible by enacting codes such as the UN Global Compact for doing business which will give companies the moral backbone in making decisions not only to protect their brand reputation but to also ensure they run their business sustainably.

References

Akkucuk, U. 2017, Ethics and sustainability in global supply chain management. Hershey, PA: Business Science Reference.

Beasley, B., & Haney, M. R. 2013. Social media and the value of truth. Lanham, MA: Lexington Books.

Crane, A., & Matten, D. 2016, Business ethics: managing corporate citizenship and sustainability in the age of globalization. Oxford, Oxford University Press.

Fryer, M. 2016, "A Role for Ethics Theory in Speculative Business Ethics Teaching", Journal of Business Ethics, vol. 138, no. 1, pp. 79-90.

Holland, D. & Albrecht, C. 2013, "The Worldwide Academic Field of Business Ethics: Scholars' Perceptions of the Most Important Issues", Journal of Business Ethics, vol. 117, no. 4, pp. 777-788.

James, M.L. 2015, "Voluntary Sustainability Reporting: A Case Exploring Ethical, Regulatory, And Strategic Considerations", Journal of the International Academy for Case Studies, vol. 21, no. 1, pp. 91-96.

Jaunich, G.J. 2012, Ethics and business decision-making, The College of St. Scholastica.

Leach, M. M. 2012, The Oxford handbook of international psychological ethics. New York, Oxford University Press.

Petrick, J., Cragg, W., & Sañudo, M. (2011). Business Ethics in North America: Trends and Challenges. Journal of Business Ethics, volume 104, pp.51-62. Retrieved from https://www.jstor.org/stable/41476057

Rossouw, G. 2011, A Global Comparative Analysis of the Global Survey of Business Ethics. Journal of Business Ethics, 104, 93-101. Retrieved from https://www.jstor.org/stable/41476061

Seay, S.S. 2015, "Sustainability Is Applied Ethics", Journal of Legal, Ethical and Regulatory Issues, vol. 18, no. 2, pp. 63-70.

Strand, R. 2014, "Strategic Leadership of Corporate Sustainability", Journal of Business Ethics, vol. 123, no. 4, pp. 687-706.

Thompson, P. B. (2015), From field to fork: food ethics for everyone. Oxford, NY: Oxford University Press.

UN, 2017.The ten principles of the UN Global Compact. [online] Available at: <https://www.unglobalcompact.org/what-is-gc/mission/principles> [Accessed 31 May 2017]

Wang, Y., Cheney, G. & Roper, J. 2016, "Virtue Ethics and the Practice-Institution Schema: An Ethical Case of Excellent Business Practices", Journal of Business Ethics, vol. 138, no. 1, pp. 67-77.

Zsolnai, L. 2011, "Environmental ethics for business sustainability", International Journal of Social Economics, vol. 38, no. 11, pp. 892-899.

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