Ethical Challenges Faced By 7 Eleven: Maintaining Leadership Styles And Guidelines For Sustainable Growth (Essay)

Ethics reflects individuals or communities moral judgement or essence regarding what is right and what is wrong (Carroll & Buchholtz, 2014). With increasing competition in the present market, businesses are becoming very conscious about maintaining their image in the market. Maintenance of ethics allows businesses to keep customers happy and satisfied with the provided services. Otherwise, it can damage the popularity of the organization in the competitive market. On the contrary, appropriate maintenance of all the ethical guidelines induces businesses to invest more on the operational procedure. It increases the cost associated with the businesses procedure that can eventually have impact on the revenue level. For that reason, organizations often face ethical dilemmas in order to run their businesses in an effective way. Maintenance of ethical guidelines requires appropriate collaboration among all the stakeholders associated with the organization. In this essay, the focus will be on the ethical practices and challenges on one of the most popular retail organizations 7 Eleven. The essay will include different ethical dilemmas 7 Eleven has faced in recent times in order to remain competitive in the market. It will also provide significance of utilizing appropriate leadership styles for keeping all the ethical guidelines in check. The essay will also try to identify the best possible way to develop workable ethical environment for achieving sustainable growth in the market.

7 Eleven is among the most popular international retail chain in the global market. 7 Eleven was founded in the year of 1927 with the objective of providing superior quality of consumer goods. Over the years, 7 Eleven has achieved immense success in the global market. Presently, it has established headquarter in Irving, Texas with the licenses and franchise stores around 56,600. The organization has more than 45,000 employees’ worldwide working in different positions (7-eleven.com, 2017). It highlights the strong hold of 7 Eleven in the international retail market. However, 7 Eleven also faced different types of ethical challenges across the global network that has somewhat damaged the image of the organization in recent times. For instance, workers of 7 Eleven has complaint about the systematic wage abuse in different retail outlets. The payroll system of 7 Eleven has allowed franchises of 7 Eleven to pay whatever rate they are like to provide. As a result, 7 Eleven is has often violated the minimum wage law across the geographical region. Therefore, wage exploitation has emerged as one of the prime ethical issues of 7 Eleven in recent times. The organization not only has faced ethical dilemmas in running operational procedure but also has faced different legislative challenges. The founders Russ Withers and other top executives have admitted the practices wage exploitation for enhancing the profit level in an effective way. The leadership styles of 7 Eleven are also accused for exploiting foreign labour forces in Australia and UK market (Crane & Matten, 2016). Therefore, the managerial style of 7 Eleven is also questionable with regards to maintaining the ethical guidelines in an effective way. Moreover, the managerial styles of 7 Eleven are accused for forcing employees to work more than the scheduled time without any extra wage payment. In fact, the leaders of 7 Eleven are also focused on exploiting international students for performing all the requirements associated with the operational procedure. Thus, the managers of 7 Eleven has also not focused on keeping the guidelines of student visa that only allows students to work for 20 hours per week. Fairfax and Four Corners have produced evidence regarding these unethical practices of 7 Eleven is going on for at least 6 years. Moreover, the top executive of 7 Eleven has tried to escape from this unethical practices issues by blaming entirely on the franchises (Luetge, 2012). For that reason, Fairfax and ABC Four Corners have suggested that franchise business model is not appropriate for Australian market structure. Therefore, 7 Eleven needs to take full responsibilities in keeping the Australian minimum wage law in an effective way.

Utilitarianism Theory and 7 Eleven's Ethical Dilemmas

Over the years, several theories have been developed for providing proper guidelines to managers to handle all the ethical aspect associated with the business procedure in an effective way. Utilitarianism theory of ethics has focused on assessing the best actions for maximizing the utility of particular resources. As per the article by Ferrell and Fraedrich (2015) the utilitarianism theory express utility as the total of all pleasure that results from specific actions minus the suffering a particular individual have to take for performing the actions. Thus, it not only focuses on profit maximization perspectives of business. In fact, it induces businesses to keep track of other factors as well, which will ensure continues success in the global market (Cheng & Wang, 2015). Utilitarianism theory has focused on providing proper support to all the stakeholders in order to keep the operational process at the desired order. Now, the managerial styles of 7 Eleven has always focused on maximizing the utility of all the available resources in an effective way. The prime objective of utilitarianism 7 Eleven managers was to enhance the effectiveness of the operational procedure without increasing the cost. As a result, the managers of the focus organization have enforced foreign students as well as labours to work beyond the scheduled timelines. Therefore, it has violated the ethical guidelines provided by the utilitarianism theory. As illustrated by Trevino and Nelson (2016) utilitarianism reflects a version of consequentialism, which provides consequences of any specific actions that are standard form of right or wrong. It describes the fact that utilitarianism theory focuses on maintaining interest equality of all the stakeholders associated with the businesses of the organization. Thus, it emphasizes on ethical psychology of all the stakeholders that can have major impact on the business procedure. Proper maintenance of interest of all the stakeholders can allow businesses to achieve healthy work environment, which is critical for achieving success in the market (Arnold & Harris, 2012). However, the practices of 7 Eleven managers have not focused on keeping track of the other stakeholder interest that eventually hampered the overall image of the organization. In fact, the managerial practices of 7 Eleven has focused on exploiting the foreign students and labours to maintain low cost operational procedure. For instance, the practices of 7 Eleven managers have focused on enforcing all the labour forces to work for additional hours without payment of extra wages (Weiss, 2014). It highlights the fact that top executives of 7 Eleven has not focused on assessing the interest of the employees or other stakeholders at all. Thus, it highlights major unethical practices conducted by the 7 Eleven managers.    

Kantian Deontological Theory and the Importance of Morality in Business

Kantian deontological theory has highlighted the importance of maintaining moral philosophy within the business sector. As described by Buchholtz and Carroll (2012) deontologists feel that morality needs to be included in the duty for avoiding any ethical challenges in the business perspective. Now, the 7 Eleven practices of providing wages lower than the minimum rate has clearly not focused on keeping the morality associated with the business procedure (Cheng & Wang, 2015). In fact, it has always focused on enhancing the profit level of the organizations by lowering the cost of operational process anyhow. Therefore, the management of 7 Eleven has not focused on understanding the importance of keeping morality for achieving long-term success in the market. As highlighted by Hoffman, Frederick and Schwartz (2014) deontology theories focuses on two classes of duties that can have major impact on the ethical maintenance guidelines. Firstly, deontology focuses on general duty of the organizations towards all the stakeholders involve with the businesses. In the business sector, these general duties involves keeping the quality of the provided products, maintaining proper benefit structure for the employees and maintenance of legal guidelines. Secondly, deontology has focused on duties towards particular person or group of individuals. Now, businesses involve different stakeholders that can have major impact on the overall success or failure of the businesses. Therefore, it is necessary for the businesses to perform specific duties in order to keep all the stakeholders happy and satisfied with the provided quality of the services. Deontology focuses on assessing all the specific types of actions for fulfilling all the requirements (Jennings, 2014). Again, the identified unethical practices by 7 Eleven managers have focused on enhancing the sales volume in an effective way. It has never focused on performing all the responsibilities towards the stakeholders of the businesses. Hence, the managerial activities have focused on maximizing the utility through the exploitation of different resources. The franchise business structure of 7 Eleven has not focused on maintaining specific rules and guidelines for the franchise owners. As a result, it has allowed franchises to exploit foreign students and labour force for maximizing the profit level associated with the business structure (Hartman et al., 2014). In fact, 7-Eleven managers has also avoided legislative guidelines in Visa that does not permit students to work more than 20 hours per week. Thus, the operational procedure of 7-Eleven has violated all the ethical guidelines mentioned in the deontology theory in a major way.         

Organisational ethics is the form of creating thee organisational culture, which promotes the personal responsibilities and ethical conduct. The associated leaders are the role models to drive the ethical principles within the workplace. Huang et al., (2014) implied that the managers within a workplace need to maintain the managerial ethics that will guide others to maintain the ethical responsibility in a significant way (Shakib & Layton, 2014). It is the major responsibility of the manager to foster the ethical culture through one’s work and take the responsibility for one’s conduct. The managers of 7-Eleven needs to undertake the transformational leadership style to make the employees more efficient and responsible towards their work. During the decision making process, the managers required to make the collaborative approaches. There is the apparent conception that the managerial ethics are determining the guiding behaviour of the individuals.  In order to foster the ethical culture, an individual needs to take the responsibility to drive the organisational behaviour in a proper way (Shakib & Layton, 2014). It is to be indicated that with the help of the effective rules and guiding principles, a complex workplace can be transformed into less-complicated landscape. The guiding principles of the managerial ethics help in creating the clear way for the associated managers to undertake the relevant decisions for the organisation. It has been observed that 7-Eleven has to face the scandals for the poor wage structure of the associated workers (Hartman et al., 2014). In fact, the managers of the company are alleged for not paying adequate knowledge on such problem. If the managerial ethics were properly followed, the employees would not have faced such conditions.

Conclusion

It has been observed that the managers usually face some of the significant challenges in undertaking the relevant decision-making process. It is essential to consider whether the decisions are fruitful for the associated stakeholders or not. However, the ground rule combined with the decision making process determines that the managers may use the materialistic approach or self-interests during such time (Huang et al., 2014). However, encouraging the moral behaviour is necessary to evaluate any decision making process. For instance, the managers of 7-Eleven needs to consider the justified wages structure as per the efforts of the employees. The use of the moral ethics will lead to the positive climate of the decision making process by the managers within the organisation (Regan, 2016). It is evident that if the employees receive the adequate monetary and non-monetary motivation from the management, it will contribute to ensure the positive performance outcome. Accordingly, the external stakeholders will receive the proper benefits from the company that is considered as the beneficial approaches for the future prospects (O'Brien & Boersma, 2016). Hence, it is necessary for the managers to consider the positive moral behaviour in terms of making the relevant decision.

It is noticed that many of the workers associated with the company 7-Eleven are foreigners. However, the company fails to give the justified work endure to these employees to some extent (Newman et al., 2014). It was reported that many of the workers in different stores complained that they have been suffering from the wage abuse. The payroll system maintained in 7-Eleven is not up to mark as per the expectations of the associated employees. Hence, it was necessary for the managers to keep the focus on their wages structure. There is the limitation found in the ethical decision making process (Cheng & Wang, 2015). The ethical issues emerged in the company suggests some of the recognizable gaps in making ethical decisions. The lack of proper review in payroll structure may create the significant issues in ethical decision making process. Such ineffective decision making process is affecting the consumer relationship as well.  The managerial ethics are developed to guide a significant decision making process considering the external and internal behaviour (Shakib & Layton, 2014). Ethical dilemmas arise when there is the recognizable conflicts arose among different parties.

It is necessary for the managers to educate the staffs about the probable risks within the organisation. It is to be stated that the low wages paid to the organisational staffs may create the job dissatisfaction and increase the attrition rate. Hence, it is necessary to the managers to understand the wages need of the associated staffs (Huberts et al., 2014). However, in order to make the ethical decisions, the managers of the company need to be transparent about the budget planning. The employees are the major assets of the company and it is essential to retain the employees with proper monetary and non-monetary benefits (Strom, Sears & Kelly, 2014). However, the maintenance of the proper leadership style is necessary in such cases. The maintenance of the relevant leadership style would be appropriate in engaging the employees with proper job satisfaction (Cheng & Wang, 2015). The involvement of the upper management is also necessary. It is essential to undertake the appropriate guiding style. Especially, the leaders need to find the proper way to motivate the associated employees and make them more comfortable with the organisational scenario.

The ethical decision making process includes the different types of leadership styles that influence the workforce to perform better. According to Van Gils et al., (2015), leadership styles are considered as the preferable approaches to motivate, direct, and implement plans within an organisation. The leadership style is categorized into different styles and segments. First, autocratic or authoritarian leaders direct the employees as per their decisions. The employees cannot oppose or challenge the decisions of the autocratic leaders (Cheng & Wang, 2015). This leadership style may lead to job dissatisfaction since the employees fail to receive the necessary freedom. Second, participative leaders gather the employees and take their advices before implementing any organisational decision (Demirtas & Akdogan, 2015). The consultation with the employees generates the sense of reliability. Moreover, the employees feel that their existence and contribution can bring difference to the organisational productivity. The company can be benefitted by the active participation of the skilled employees at the organisation. Third, laissez-faire leaders allow the employees to undertake their personal decision as per their capabilities (Freeman, 2016). In this process, the employees lack the closer supervision of the managers. At the end, the leaders need to allow the decisions undertaken by the employees.

The transformational leaders help the employees develop their skills, both the personal and professional life. It is the most helpful leadership style to motivate the employees in an effective way. The employees become more interested in engaging themselves into organisational activities. The final one is transactional leadership style in which the leaders provide the reward or punishment on basis of the performance parameter. It is necessary to identify the performance outcome of the employees (Yang, 2014). The managers of 7-Eleven needs to undertake the transformational leadership style to make the employees more efficient and responsible towards their work (Demirtas & Akdogan, 2015). During the decision making process, the managers required to make the collaborative approaches. Receiving the relevant feedback or opinion from other teams would be much preferable for ensuring the most effective business functionalities.  Collaborative decision making process is also conceptualized as the evidence-based decision making process.

The consensus decision making process is quite similar to democratic votes where the leaders can explain the organisational process to the associated employees and consult the best practices. It will ensure the productive approaches to the firm for the future prospects. In fact, it has been noted that some of the leaders select the delegating process of decision making. Making the convenient approach will be beneficial for the firm to undertake the right decision (Demirtas & Akdogan, 2015). It is essential for the firm to develop the ethical decision making approach for the betterment of the employees’ involvement. In fact, it was necessary for the managers to keep the focus on their wages structure. There is the limitation found in the ethical decision making process. The ethical issues emerged in the company suggests some of the recognizable gaps in making ethical decisions (Cheng & Wang, 2015). The lack of proper review in payroll structure may create the significant issues in ethical decision making process. Such ineffective decision making process is affecting the consumer relationship as well.  

Conclusion

The study develops the idea about the ethical dilemmas arose in 7-Eleven. It has been observed that the inappropriate leadership styles and ineffective decision making process was the major issue behind the employees’ dissatisfaction. The employees complained about the poor wages in which the leaders failed to pay the attention. Hence, it was necessary for the company to make the proper ethical decisions by being transparent about the budget planning. The employees are the major assets of the company and it is essential to retain the employees with proper monetary and non-monetary benefits. However, the maintenance of the proper leadership style is necessary in such cases. The maintenance of the relevant leadership style would be appropriate in engaging the employees with proper job satisfaction.

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