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Business Ethics and Corporate social responsibility concepts
Enron Company was performing very well they started by trading in natural gas and in the late 1990s the company had grown to be a multinational corporation partnering with other companies. The company was taken over by Skilling who seemed so promising, intelligent and honest. The company experienced prosperity and its future was promising. It even sold its shares at $90 in 2000. However the following year in 2001, the company shocked the world due to its unethical behavior that eventually led to its shut down and imprisonment of the key leaders. The company was found to be bankrupt and investigations revealed that the company leaders and employees were involved in money laundering, corruption and inside trading. From the article, several ethical issues are raised.
Firstly, the business culture did not promote oneness and openness. The company did not have respect for the rights of employees and shareholders. The company incited unfair competition among the employees because the performing ones were promoted while those who did not perform were fired mercilessly. Employees now shifted their attention from performing as a unit and begun finding fault on each other and reporting.
This was totally unethical because employees should be given an opportunity for growth as well as fair compensation of their efforts at the work place. Secondly, Skilling aimed at earning more profits for the executives instead of shareholders. This was unfair and against the business culture to uphold the interests of shareholders.
Enron involved in some partnerships that were against the law. They partnered with Wall Street companies such as Citigroup where they sold assets when prices were low and bought them when prices went up. They overstated their worth by $ 586 million so as to remain in business and this led to them having debts of up to $ 6 billion dollars. This is totally unethical because the company did not uphold integrity in its dealings. They were cheating the public and the shareholders.
Aristotle is a great philosopher who described the theory on virtue ethics. He described virtues as qualities of a good life. They include: courage, patience, temperance, justice and happiness. Virtues according to Aristotle are a skill that can only be enacted or developed through practice. For one to acquire a virtue and for it to be stable, then a person must keep practicing for example for patience to be instilled in an individual, they must exercise patience in all their endeavors. In this way the virtue is instilled in them.
How the theory compares to consequentialist and non consequentialist theory
The consequentialist theory evaluates what is right and what is wrong based on the consequences while the non consequentialist theory judges the right or the wrong based on the intrinsic properties of an action instead of the consequences. These two theories compare to the virtue ethics theory in the following ways:
Firstly, virtue ethics evaluates the character not the actions of an individual while the consequentialist theories are both centered on judgment of actions.
Secondly, virtues need to be instilled and nurtured but once acquired they are stable while the consequentialist theories are aimed at identification of principles that can be applicable in any moral situation.
Thirdly, according to Aristotle’s theory, an action is right if it’s what a virtuous person would do in such a case while the consequentialist theories, an action is right or wrong based on whether it gives the best consequences.
Virtue ethics theory measures actions based on certain virtues with the aim of being a virtuous person while the consequentialist theory advocates for any action so long as they eventually maximize happiness.
However, both the virtue ethics theory and the consequentialist theories are similar in that they uphold morality. They both identify that some actions are right and others are wrong.
The Kantian theory states that the rightness or wrongness of an action depends on whether it fulfils our duty but not on the outcome of an action.
Kellogg’s CSR statement is insincere and just aimed at convincing stakeholders that it is a socially responsible company. This is because; they claim to provide nutritious food that promotes healthy lifestyle this is untrue because tests have revealed that the products contain fats that are not healthy for human beings. They try to convince stakeholders that they are socially responsible so that their deception can help them make more profits. This is very unethical for the business as they should uphold integrity and stay true to their CSR statement.
Kantians theory lays emphasis on the motive of an action. The theory is based on four aspects;
Kellogg’s CSR does not portray good will, their aim is to maximize their profits which is totally business unethical.
Respect towards human beings
Kellogg Company does not show any respect to human beings because if they did, they would not sell products that they know very well would affect the health of consumers.
Kantian theory also has an aspect of universal acceptability which Kellogg Company does not adhere to. From the CSR statement it may seem acceptable to make them competitive globally but this is a deception on the part of the company and very unethical.
The other aspect of the theory is categorical imperative which implies that the actions of a party should be applicable all over the world. It would be so dishonest of companies if they made false statements of their CSR to deceive the public. Kellogg’s actions could therefore not be justified by Kantians theory.
Apart from the assumption that fair trade promotes fair returns to poor farmers in developing countries and the fact that it also addresses fair trade, other perspectives are;
Most developing countries make a living through farming. However, their products fetch very low prices in the international market. This is because of very strict rules on quality of products and this translates into poverty for the primary producer.
The cost of production for farmers in developing countries is subsidized to nearly zero. The rich countries subsidize farming in their countries too and this leads to surplus production. Due to this, the products of poor countries are dumped in the market at very low prices affecting farmers.
Role of consumers
Consumers have a part to play in ensuring that they purchase fair trade products. By doing this, they will be ensuring that the efforts of the primary farmer is compensated fully.
Fair trade advocates for fair treatment of women at work places. The poorest women are the ones that make clothes according to statistics. Fair trade ensures gender equality in terms of compensation.
Most countries import cheap products and therefore local producers do not have a market share. They end up experiencing losses. Fair trade prevents import of cheap products by putting up rules and restrictions.
Responsibility of corporations to the global community
Corporations have a major responsibility to play in the global community. Firstly, corporations have a responsibility to sell and use fair trade products such as coffee, sugar and cocoa because this is the only way they can promote fair trade.
Corporations should also maintain safe working conditions for all their employees as well as respect their rights. The corporation should also treat both men and women equally and not treat women as an inferior gender with poor pay.
Thirdly, corporations should ensure fair pay for their employees. This should be inclusive of terms of employment. Responsible companies should not employ people on short term contracts because these types of employment promote dismissal any time without notice.
Lastly, corporations should participate in fundraising to promote fair trade. Such fundraisings include Oxfam Campaign which promotes fair trade all over the world.
Hira, Anil, and Jared Ferrie. “Fair Trade: Three Key Challenges for Reaching the Mainstream.” Journal of Business Ethics 63.2 (2006): 107–118. Web.
ProfessorZaldivar. “Aristotle’s Virtue Ethics.” YouTube. YouTube, 30 Jan. 2012. Web. 24 Aug. 2016.
Sims, Ronald R., and Johannes Brinkmann. Teaching Business Ethics 7.1 (2003): 69–86. Web.