Assessing Target's and Google's Code of Ethics and Adam Smith's Invisible Hand

Assessing Target's Code of Ethics

Target is a general merchandise retailer with over 350,000 employees and 1,871 stores throughout all 50 states. Their headquarters are in Minneapolis, Minnesota where the first Target store opened in 1962. Their mission is, “to help families discover the joy of everyday life” and have the tag line of, “Expect More. Pay Less.” Also, according to their website, 5% of their profits go back into the community.

Overall, Target has a strong Code of Ethics. The 44-page Code starts with a message from the CEO, defines ethics at Target, and states the corporation’s purpose, values and behaviors. The Code then goes on to identify who it applies to, which is all team members employed by Target and mentions a separate code for the Board of Directors. After this initial section the Code goes into more detail with the following sections; putting ethics into action, working together, maintaining trust, conducting business fairly, safeguarding what’s ours, and caring for our world. Within each section the Code does a great job of outlining their (Target’s) commitment, how it’s done, what it looks like day-to-day, and gives “what if” scenarios. Other strengths of the Code are the direct links to corporate policies and the list of resources for reporting any misconduct or ethical concerns. The one weakness in Target’s Code of Ethics is there is no reference to disciplinary actions or ramifications for violating the code.

To ensure compliance with the Code of Ethics, Target established a Corporate Compliance and Ethics team located at the headquarters in Minneapolis. Stemming from this team, Target encourages employees at all levels to report any misconduct or ethical concerns. They have implemented an anonymous Integrity Hotline and website to report concerns in addition to the mail and phone option. An added strength of the hotline and website is they are accessible to those who speak different languages through interpreters or other links. They also developed a tool to assist employees with making ethical decisions. This tool consists of questions in this order: Is it legal? Is it in line with the Values, Behaviors and Code? Does it enhance Target's reputation? If reported to the media, would it reflect positively on Target?

Based on the language throughout the Code and the tool they want employees to use when faced with decisions, Target’s Code reflects a company value system grounded in Profit Maximization. The first question of the ethical decision-making tool is, is it legal? This is a key component of profit maximization because it requires people to act within the law. Also, throughout the Code there are references to making decisions that reflect the best of oneself and Target. This is another part of profit maximization since it requires one to make a decision based on the best interest of themselves or the Company, instead of looking at all of society’s benefit (Utilitarianism) or one’s duty (Kantianism).

Compliance efforts by Target

Google is a technology company that mission is "to organize the world's information and make it universally accessible and useful". Google owns a variety of websites and software.  Google has just under 115,000 employees and revenue above $60 billion.  Google was founded in 1996 by Larry Page and Surgey Brin while completing their PHD’s at Stanford.

These first five items in its first section are simple and articulate.  Google does a good job of breaking their code up into different sections, this allows employees to easily look up areas of specific concern or question.  Another strength of Google’s code is the manner in which it is structured.  Each of the eight sections has a specific title, within each title there are subcategories.  Most questions that arrive could be answered by finding the main topic and reading within the specific subcategory.  There is everything from bringing your dog to work to its policy on protecting user data.  One of the ways it could be improved is by having a mission statement of sorts in the introduction of the code.  It has an opening paragraph, but it is wordy and hard to understand.  Another shortfall is the code does not list anything about reporting things anonymously.  It does have a policy on none retaliation, but this could be improved by explicitly stating there is an option to report violations and remain anonymous.

Google has an Ethics and Compliance department.  This department’s primary responsibility is to uphold and enforce Google’s code of conduct.  In 2018, an employee of Google made major headlines when he resigned from Google.  He resigned because Google planned to build censorship AI for the Chinese search market.  The employee first attempted to raise his concerns with Google’s internal department, his concerns were heard but did not change the course of action Google had in mind.  By resigning from a high-ranking position with Google, this employee was able to make a change by starting their own non-profit to fight and bring to light controversial items/project un tech.  This is an example of Google’s Ethics department hearing a concern and determining the concern met the standards of its code, therefore it did not take action.

I believe Google’s code of conduct is grounded in profit maximization.  If one would simply read the code, they may disagree.  But when reviewing cases of whistleblowers at Google, in most cases, Google chose not to act until it had public pressure to do so.  Also, knowing people that wok or have worked at Google, they share similar sentiments.  The company expects employees to work many long hours, burn out is not uncommon and if you complain they tell you to move on, there are thousands in line that would love to work at Google.

Assessing Google's Code of Ethics

Adam Smith recognized the “invisible hand” – the market competition that drives self-interested individuals to act in ways that serve society.  For example, a McDonalds Happy Meal delighted children – yummy food AND a toy!  Some folks found the offering less than nutritious (some complained about their chubby children) and launched a boycott of the product.  McDonalds responded with a choice:  carrot and celery sticks in lieu of fries.  Adam would have been proud.   Do you believe the Invisible Hand is sufficient to serve the well-being of society OR should government intervene to ensure that corporate products serve society?  Cite “real life” examples to support your contention.

I think this may come down to a cultural interpretation of the role of government. In Europe, it is expected that the government has a degree of control in the lives of its citizens and business practices. In the USA, it is considerably less so. Every election cycle politicians shout about abolishing regulations which they believe stifle growth and industry.

However, what businesses may call regulations, a customer/consumer may call it protections.

A prominent example of the difference between Europe and the USA in terms of business practice is the recently implemented GDPR. When visiting websites in Europe, the website must notify you that it is collecting your data for marketing purposes via cookies. The user can opt-out of having their data collected.

However, in America, no such privacy laws exist at this time.

Another potential deregulation from the government was avoiding The Net Neutrality act. This act wanted to protect consumers as it would prevent ISPs from slowing down certain websites.

For example, if your ISP was Comcast/Xfinity, Comcast would be within their rights to slow down Netflix or other web streaming services. They would do this because Comcast would want customers to use the Comcast streaming service and not Netflix. The Net Neutrality Act would have made it so ISPs had to treat all web traffic equally.

I do support government regulations and intervention as and when required. Governments have a duty of care to their citizens. If a company is cutting corners or endangering the lives of its citizens, it is not enough for the market to decide, the government should intervene.

In 2015 freshman North Carolina Republican senator Thom Tillis made the ludicrous statement that restaurants should not require that their employees wash their hands. It is up to the consumer to decide if they want to go to a restaurant that either requires or does not require its employees to wash their hands. Senator Tillis considered this government regulation on small businesses, in this case, restaurants.

Compliance efforts by Google

Starbucks reacted to the invisible hand when they introduced their Coffee And Farmer Equity practice (CAFÉ). Responding to criticism that they were not sourcing beans from fair trade farmers or buying beans from farms that employed child labor, they decided to voluntarily opt and implement this CAFÉ practice. Many towns across Europe were only allowing retailers who bought and sold products that could be labeled fair trade. Starbucks at the time was not one of them. Fair Trade towns are slowly making their way into the USA.

In my opinion, the government may do more harm than good if they were to take on more power in controlling the market. I believe that people are capable of establishing and maintaining an equilibrium therefore the invisible hand is sufficient to serve the well-being of society. This allows consumers the choice on what, where and how they are going to buy and gives the producers creative and innovative control in their marketing and production. Companies are aware that the consumer is the driving force of their business and many put out surveys to receive feedback on how to improve in order to maintain or grow sales.

An example of the invisible hand can be seen again at McDonald’s when consumers desired breakfast items all day long. The customer identified what more they wanted from the company through hashtags on twitter and answering surveys and McDonald’s heard and answered. In late 2015, they introduced “All Day Breakfast” based on their social listening efforts.

Another example of the invisible hand at work is seen in the growth of the makeup brand, Glossier. This company uses social media to receive and ask for feedback on a regular basis. If the consumers want to see a product, Glossier will look at the demand and answer. For example, consumers were asking for a mascara from the brand and Glossier answered with Lash Slick. In this day, I believe that social media is breaking the barrier between companies and consumers, which is good because it gives society a voice to ask (or cancel) what they want.

However, there is also a downside with just the invisible hand governing the market because without any government regulation there can be things such as false advertising, scams, and exploitation. There needs to be some level of government involvement to protect people from the bad side of business. The invisible hand can drive the equilibrium, but the government still needs to establish law to protect the consumers.