An Essay On Ethics In Employee Compensation At Amcor Limited.

Background Information About Employee Compensation at Amcor Limited

Question:

Discuss About The Cambridge Companion To Virtue Ethics Press?

The report focuses on whether or not ASX companies need to pay no more than 20 times the average salary of employees. In the modern world, this is an important aspect of the business organisations as in the public organisations, the remuneration paid to the executives have been met with many criticisms (Crane & Matten, 2016). The compensation provided all the employee benefits that are required for the satisfaction of the employees and ensure a healthy working atmosphere. However, it is to be kept in mind that the finances of a company are high in order to provide sufficient compensation benefits. Certain Government laws also exist that encourages in the payment of compensation to the employees as per the work was done by them. The essay takes into account the need of the ASX companies in providing compensations that are higher than the average salary. According to Trevino & Nelson (2016), the companies need to keep in mind that employee satisfaction at the cost of financial stability may hamper the growth of the organisations in future. In order to conduct the report in a successful manner, the example of Amcor Limited is considered.

Amcor Limited is a multinational packing company situated in Australia. It is a public company that aids in flexible as well as rigid packaging for food companies, beverage and tobacco companies. The aim of the company is to protect food items, beverage and pharmaceuticals from any type of contagious diseases. The company is located in Melbourne and was established in 1986. The headquarters of the company is located in Zurich, big due to the fact that it is registered with the Australian Security Exchange (ASX), the company conducts its operations from Australia. Over the years the company have grown and have managed to earn revenue of $9.1 billion in the year 2016. The company owns over 35,000 employees (Amcor.com, 2017).

Based on the analysis of the company, it can be said that the increased compensation of the employees can hinder the progress of Amcor. This is because the financial position of the company can be compromised given the increased rate of compensation of the employees. In this regard, a certain analysis is made that form an integral part of the analysis of business ethics. The analysis is done in the Utilitarian approach, Kantian approach and the virtue ethics that are involved in understanding business ethics. Theoretical implication and extension of the concepts in terms of use in Amcor are also analysed. 

Utilitarianism: An Overview

Weiss (2014) stated that Utilitarianism determines the right approach from the wrong approach. It is an essential ethical theory that focuses on the outcomes in the form of consequentialism. Utilitarianism contributes to the analysis that results in determining the outcomes of an action. The implications of such outcomes are also important in order to provide benefits for people. According to Hoffman, Frederick & Schwartz (2014), utilitarianism considers the ethical choices that produce the greatest results for the betterment of the people. It is a common aspect to use modern reasoning in the field of decision-making and providing benefits to the employees. Hence, a clear distinction is made that determines the good from the bad. A pragmatic approach is followed in order to avoid performing acts based on principles. Despite this, it can be said that due to the unpredictable future, it is difficult to understand whether the actions taken can cause any good consequence.

DesJardins & McCall (2014) criticised the concept stating that utilitarianism fails to provide values such as justice and individual rights. For example, using the service of an experienced person at a time when the mass people without experience can be considered as the greatest good during the time. However, actions taken during such instances are considered as unacceptable as well as unethical. Chell et al., (2016) observed that the utilitarianism have two major consequences that are essential for evaluation. The first consequence includes taking decisions that are normally deemed to be illegal. The actions taken in an instant manner may cause temporary solve of a problem. However, it can have a bad influence in the future as the consequence can lead to the hampering of the situation. The second consequence is the non-fulfilment of goals or objectives (Oakley & Cocking, 2011). This can also be considered as a loss for any company or people as the taking an ethical decision at the time of crisis can also have a negative consequence. Hence, it can be said that utilitarianism has certain limitations in determining the right and wrong approach based on the reasoning of the people.

Hartman, DesJardins & MacDonald (2014) observed that utilitarianism tends to offer an easier method to determine the course of an action. The right approach, decision and choice are determined based on the actions that are performed by an individual. In order to understand the current choice of action, it is necessary to analyse every possible choice of actions that are required. One of the challenging tasks that are faced in the modern era is to determine the maximum benefit that can be received while evaluating the quantity and quality of the benefit. Apart from these, the consequences that may arise while determining a current course of action can be considered as a challenging factor in the modern era. Barry (2016) stated that despite a current approach taken by individuals while applying the concept it can have certain problems. These problems arise due to them as the concept requires assigning values for benefits and costs. These require being calculated in an abstract manner in order to determine the results of the choice of actions. Another problem is the fact that during the time of justice based on moral decisions, individuals cannot apply the concept of utilitarianism.

Criticisms of Utilitarianism

Hence, in this regard, it can be said that utilitarianism considers the policies, decisions and actions that are taken in order to determine the right course of action. In a company such as Amcor, the application of the concept is required in order to determine the worth of the increased compensation. In the modern era, the concept has been described as putting the need of self before that of others (Donaldson & Dunfee, 2014). It has also been pointed out that the use of Kantian theory can help in determining the right choice of ethical action that is required in the modern world.     

Kantian ethics can also be considered as the ethical theory dealing with the deontological approach. It provides the fact that an action can be considered good if the willingness to perform the action is for the greater good (Bowie, 2012). This can be applied in organisational context as well since most companies owe certain duties to the customers. An ethical law can be established from the concept of performing a duty. It has been argued that the feelings of people engaged in the goodwill of others can be considered as a proper good deed. Deeds that align itself with self-centric approach cannot be considered as a proper means to help build ethical awareness among people. Beauchamp, Bowie & Arnold (2014) stated that the unethical force to the individuals cannot be considered as an ethical approach because it can be considered as unauthorised agreement. The ethical duties arise due to the failure to fulfil certain works that needed to be done in an ethical manner.

In this regard, two perspective or approaches can be considered in order to determine the application of the Kantian analysis. Reynolds & Bowie (2014) observed that the characteristics of the ethical programs are based on the hypothetical imperative and categorical imperative. These two provide an overview of the manner in which the perspective of individuals can be taken into consideration. The hypothetical imperative defines the fact that individuals are sometimes asked to perform tasks by providing proper encouragement. Individuals take up social activities or any activity assigned at the workplace and complete it any manner (Bowie, 2010). The encouragement received by the individuals can be either in the form of self-satisfaction or from the interest of the people. On the other hand, the categorical imperative is when individuals are forced to perform tasks. These approaches can be differentiated in a manner in which the responses of the individuals take place. Hence, Baron & Baron (2013) observed that individuals need to act upon certain rules that produce no consequences and are accepted in a universal manner.

Kantian Ethics: An Overview

The imperatives are based on the reasons that are applicable in the ethical context rather than based on the contingent facts about the individuals. The biggest differences between the hypothetical as well as the classical imperative are the obligation and the binding of the individuals based on the duties and the ethical considerations that are undertaken by the individuals. Goodpaster (2013) opined that the actions of an individual need to be based on the communication that exists between two or more individuals. The interests and intentions of the individuals need to be discussed in order to determine any ethical consequences that may exist in the lives of the people. Based on the influences of the Kantian theory, other theories have come up that highlight the ethics of an individual. These theorists have been able to redefine the concept and ensured that the Kantian theory forms the base and highlight of the theories (Henschke, 2017). However, there have been criticisms regarding the application of Kantian theory in the modern world.

One of the criticisms is the fact that the theory provides no or less information about the actions of the people. This is mainly because of the fact that the theory is based on the principle of non-contradiction. The theory lacked the proper content required for the construction of principle morality. Jarvis (2017) further added the fact that the ethics need to be followed based on the explanation and interpretation of the things that are required to be done by an individual. However, Kantian theory presents the ideas of what is required to be done in order to maintain proper ethical consent in the society. Hence, the application of Kantian theory can also be justified in Amcor in order to understand the requirement of the employees.

According to Spiegel (2017), virtue ethics is based upon the approaches that focus on the development of characters among an individual and motivates them in order to maintain the ethical considerations. Virtue ethics can be related to the moral philosophies and principles that do not hold any guidelines or rules in terms of ethical considerations. It is important for an individual to find a proper balance in order to make ethical decisions. The agents involved in practising virtue ethics does not engage in any rules that require individuals to carry out ethical decisions. Virtue ethics is considered as one of the modern and major approaches in the normative ethics. The self-interest of the people is a major benefit in terms of achieving the goals set for maintaining the ethical considerations. Businesses can also use the approach in order to earn maximum profits. Van Hooft (2014) identifies this ethical approach as a manner in which moral character of an individual can be developed. The manner in which individuals opting virtue ethics perceives the world is different from those that are observed by followers of other ethical contexts.

Criticisms of Kantian Ethics

It has been established that utilitarianism approach points to the facts that the consequences of emphasising on moral duties and rights can help in maximising the well-being among an individual. The followers of Kantian approach have a different view stating that moral rights and duties will be conducted based on the moral rules that are developed. The followers of virtue ethics will counter these statements stating that the moral ethics and duties need to be considered as charitable events and the benevolence of it is required in order to attend virtue (Elliot, 2016). Virtue ethics defines concepts that are more fundamental in the society. Most often virtues are observed from a point of view of the characteristic of an individual. The behaviour of the individuals in the society, as well as the actions performed by the people, determine the virtue ethics of the individuals (Russell, 2013). The application of virtue ethics assimilate in society can be done by formulating two types of approaches. These include the action approach and agent-based approach. The action-based approach focuses more on the guidelines that need to be followed in order to maintain ethnic context. The agent-based approach is mainly about achieving the personal goals set by the individuals in terms of maintaining ethics in the society. Bright, Winn & Kanov (2014) stated that virtue can be used in two meanings that define the actions corresponding to the quality of character and disposition. It defines the necessary things that need to be done in order to understand and perform one or more universal duties that are required for maintaining ethical considerations.

Thus, it can be said that virtue ethics form an essential part of the ethical theories that define the moral duties of individuals. The three theories that have been conceptualised above can be applied in organisational contexts (Fernando & Moore, 2015). In the case of Amcor, the ethical theories can be used in order to ensure that the company can manage the compensation that it provides to the employees. The following point analysis the extension of the theories in the organisational context in order to provide a clear idea about the application of the concepts.

Based on the analysis of the theories, it can be said that Amcor Limited need to apply ethics in the organisation based on the philosophies stated in the theories. This can help the company as well as the employees to develop self-consciousness about the ways by which they need to maintain the decorum of the organisation. The focus of the study is to understand whether or not compensation should be more than the fixed salary of an employee. Hence, the theoretical implications can help managers as well as employees to understand the pros and cons of providing more compensation.

Virtue Ethics: An Overview

Application of Utilitarianism: As stated by Hursthouse (2016), utilitarianism helps people to understand the rights from the wrong. The determination of the actions is identified after the analysis of outcomes. Hence, ethical choices need to be considered in order to improve the actions of the people. In this regard, it can be said that Amcor Limited need to ensure that unethical means are not adopted by the company in terms of maintaining the finances of the organisation. The goals and objectives of the organisation need to be maintained in order to keep the employees satisfied. The fact that the employees are drawing a high compensation needs to reflect in the work that is being performed. Solomon (2017) observed that the employees need to ensure that the benefits that are being provided to them are not beyond the compensation practice of the organisation. The consequences that may bring due to the increased compensation need to be communicated with the stakeholders. It may be difficult for the company to involve the stakeholders in order to ensure that the consequences of increased benefits are helping the company. Hence, based on this theory, it can be said that the increase of 20 times the averse salary is not applicable in a company like Amcor.

Application of Kantian theory: The application of Kantian theory, needs to be based on the fact that the employees can be categorised based on the imperatives that are associated with the theory. In the context of Amcor, the hypothetical imperative needs to encourage and motivate the employees in terms of performing the work. Based on the work performed by the employees the compensations can be provided (Hursthouse, 2017). On the other hand, the application of categorical imperative can force the employees to behave as professionals and carry out the objectives of the organisation. Despite the application of either of the imperatives, the fact that the compensation is more than the average salary is not justified (Koehn, 2015). This is because the average salary of the employees is the basic amount that is needed to be paid to the employees. However, the compensations are provided after completing a certain period in the organisation and based on the position of the employees. Hence, the increased level of compensation cannot justify the salary of the employees. The ethical consent in this context needs to come from the fact that the employees need to work hard in order to earn a minimum compensation from the managers (Annas, 2017).

Application of Virtue Ethics in Business

Application of virtue ethics theory: According to Trianosky (2010), virtue ethics refer to the ways by which character of an individual is developed. Based on the behaviours and attitudes of the employees, Amcor can generate compensation. The rules and regulations of the company need to provide the morality at which the managers treat the employees. However, the fact that ethical considerations are considered as donations can be a huge factor in the application of this ethical theory. Nevertheless, Annas (2017) observed that the behaviour and actions of the employees can result in the earning of compensation. This can be a motivational factor as the employees can gain the benefits that are useful for motivating them and enhancing the quality of work performed by them. According to Hursthouse (2016), virtue ethics judge people based on the behaviours and ideas provided by the people. However, the employees of Amcor are not judged based on the factors that are needed for gaining compensation. Hence, the excess amounts of compensation provided by the managers can herm the financial status of Amcor. Suggestions regarding the ways to improve the current situation or reduce the compensation amount can be provided in order to avoid the excess of finance in the company.

Conclusion

In order to improve the reputation of the organisation and ensure that the ethics are maintained it is necessary for the mangers of Amcor to ensure that the compensation level of the company is reduced. This is required in order to maintain the financial level of the organisation. The application of the theoretical concept developed by Kant can be used in this case. The employees need to be encouraged to work properly in order to attain the goals and objectives of the organisation. The fact that the compensation level is higher than the salary is motivation enough to perform work in an effective manner. Apart from this, it is also needed that the employees manage to comply with the reduced compensation in an organisation. This can be considered as the application of virtue ethics theory in the organisation. The fact that this theory idealises the idea of self-awareness can be used to convince the employees about the necessity of reducing compensation.

Thus, it can be concluded that in order to conduct a successful business it is necessary that companies manage to maintain the necessary ethics required for successful completion. In this regard, the application of ethical concepts and theories are important in order to implement the theories in a successful manner. In the case of Amcor Limited, the company can apply the theories in order to convince employees about the reduction of compensation. The fact that the compensation rate is higher than the average salary cannot be justified due to the financial loss that a company can suffer. Hence, the adoption of the theories is important to understand the required ethical behaviour in an organisation.

Conclusion

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