Horse-Meat Scandal - Coursework Example

Horse-meat scandal Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecture Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 28th February, 2013. Introduction Businesses in the modern times are faced with a number of contemporary issues that have been encountered by managers even in a traditional environment. The main objective of operating a business is to make profits but it needs is not the only objective but has to play a role in ensuring their work is done ethically(Weiss 2002, pp. 44-70). Nowadays corporate management is increasingly being confronted with the questions of how they make their profits in an ethical way rather than the traditional question of how much profit they make and with whom. Managers have to decide between what is ethically practiced while at the same time making sure their firms remains competitive and profitable. The increasing pace of companies practicing ethics in various facets of life compounds the question of ethics that is facing contemporary organizations. One of the forces which faces a business is the ethical responsibility that ranges from the wa people communicate to how they transact in their businesses(Weiss 2002, pp. 44-70). To ensure that ethics is practiced,organisations have come up with most advanced means of communication where organisational activities are more transparent and organization cannot hope to hide unethical conduct from the public. The internet has been instrumental in exposing businesses that act unethically. Secondly, ethics have brought about the liberalization of trade, but businesses that operate across national boundaries have to contend with different ethical and legal standards. This essay explores the ethical challenges facing the European meat packing companies by analyzing the recent scandal where companies packed horse meet as beef. Secondly, the paper analyzes the effects of liberalization of the European market, diverse legislation and the action of regulatory bodies on the ethical challenge. The essay also analyzes the responsibility of a company to refrain from acting unethically regardless of how much profit it can make from such conduct. This essay ends by giving a summary of all that has been discussed in the paper. Horse - meat Scandal Recently, several producers of meat in the European market have been involved in an ethical scandal involving the passing off of horse meat as beef. Most of the horse-meat found is being passed off as beef has been found to contain an illegal substance, Phenylbutazone (BBC 2013,p13). At high levels the substance is harmful to humans who consume it. In response to the illegal activities, the EU Standing Committee on the Food Chain has announced a new testing regime involving DNA testing to discover cases that detect whether the meat being offered on supermarket shelves is really beef (BBC 2013,p.20). Although the meat producers involved in the scandal have denied responsibility for misleading consumers to purchase horse-meat, it was not beyond their power to prevent this unethical practice. The scale of the scandal shows that the companies were intentionally defrauding consumers. Ethics: Company responsibility In any kind of business carried out, it is meant to serve the citizens around them. This therefore brings the issue of corporate social responsibility where responsibility is seen as standards that are acceptable in any organization. It is through the European Union that corporate responsibility is upheld. Through the meat scandal, the union has come up with strategies where proper standard is upheld in the delivery of products in the region (Mail on Sunday, 93). Corporate responsibility entails carrying on business with the consumer in mind. Ethics means that the products given to the consumers are of the right standards and what the customer specifically wants which will not harm their health on consumption. The meat scandal has been attributed towards not upholding the roles of corporate social responsibility as selling horse meat to many people in the region indicates that the business is unethical and through this, conflict is created and trust is lost by the consumers of the product. Business ethics have been of importance as by not applying this as a tool in business means reduced markets accompanied by reducing profits (Interfax 2013, p. 1). In a globalized context, ethics are highly emphasized as through a liberalized market structure, ethics happens to be the key of success in carrying out business. This is because through ethical companies gain trust hence becomes profitable meaning that there is positive reputation. Meat packers Dilemma The meat packing businesses involved in this case have to handle a number of ethical dilemmas. The first dilemma that is the subject of this paper is whether it is right to pass horse meat as beef and offer it to consumers. According to the value theory an ethical dilemma involves choosing the course of action that protects the greater good of the society. The meat packers may argue that it is not wrong to offer horse-meat as beef as they are both edible (Interfax 2013, p. 1). Despite this argument the presence of dangerous substances in the meat shows the packers have ignored their ethical responsibility and did not make an ethical decision while faced with this ethical dilemma. Secondly, the meat packers are faced with the ethical dilemma of whether to recall the meat wrongly labelled and lose the millions they had invested in getting the meat to the market. Ethics: regulatory body responsibility Regulatory bodies are the first line of defence for consumers who are faced with a number of businesses who are bent on exploiting them to make more profits. According to Debreu (1972), the Agency theory a firm is motivated by self-interest in its operation and most of the time the self interest of the owners of the firm or their agents takes precedent over ethical responsibility to society (Heath and Norman 2004). According to Heath and Norman (2004), both agent and principal are motivated by the need to maximize personal wealth. It is no surprise then that European meat suppliers would try to dupe consumers into buying horse meat instead of beef. The action perfectly fits the profit motivation which Heath and Norman (2004) say is what drives firms. From the point of view of the agency theory firms are bound to make moves that take advantage of consumers and therefore consumers need to be protected from these unscrupulous firms. Consumers are individuals and cannot be able to take on powerful corporate bodies, therefore necessitating the presence of regulatory bodies. From an economic perspective, the need to have regulators in the market is justified by the need to prevent market failure (Spector 2011, pp. 3390-3394). The public places the responsibility of ensuring businesses act ethically when dealing with them rests squarely on the shoulders of regulatory bodies. In the Articles on the horse meat scandal the consumers call the regulators to warrant the quality of the food they purchase. It can be argued that the regulators including the UK's Food Standards Agency (FSA) have failed the public by not detecting the passing of horse meat as beef earlier (BBC 2013,pp15-49). The presence of a potentially harmful substance in the horse meat brings into light the need for increased vigilance by food regulatory bodies in protecting the public from the unethical practice of mislabelling meat. Businesses have been pushing to be allowed to regulate themselves as they recognize their ethical duty to the public. However, in this case the players in the EU meat industry have failed to even fulfil their legal responsibility. It must be noted that ethical responsibility goes beyond legal compliance. According Saft (2009,pp.19), he sums up the need for public regulatory bodies noting that consumers need guarantees and safeguards while dealing with corporate entities. Sift argues for tighter regulations, more power to regulatory bodies and dire consequences for those who fail to fulfil their ethical responsibility. In the case one such dire consequence are exemplified by the French Government's suspension of the license of French meat supplier Superhero although the supplier denied knowledge that it was practicing meat mislabelling (BBC 2013, p.45). Ethical Dilemma faced with Regulatory Bodies The regulatory bodies in the meat industry in this case will be faced with a number of moral dilemmas when it comes to the meat packing scandal. First, the regulatory bodies will have to decide whether the meat packers are conducting their businesses unethically by passing horse meet with beef. The Ethical dilemma would be phrased as follows; “Is it wrong to sell horse meat as beef, while both varieties of meat are edible”. This is a fairly easy ethical question of the regulatory body to answer as it all depends on the preference of the consumers they are protecting. A consumer expects that the content of meat package, packed as beef will be beef and not something and thus the regulatory body responsibility is to ensure consumer purchases the type of meat that the packaging indicates (Stratton-Lake 2000, p. 16). However, a more complex dilemma for the regulatory body is how the effects of their intervention affect the meat packing industry. According to Stratton-Lake (2000, p. 84), the government is not supposed to interfere with the smooth flow of trade to ensure the economic development of any. The regulatory bodies must choose a course of action to react to the unethical conduct of the meat packers that do the least harm to the economy or the society in general. According to Gill (2004, p.74), the ethical principle of least harm is important to observe in ethical decision making. In this case, the decision by the French regulator to shut down the operations of one of its meat packers should have considered the principle of least harm. In this case, the complexity of the Dilemma is compounded by the fact that a lot of people who were not involved in the illegal conduct would be affected (Gill 2004, p.74). Workers at the French firm would lose their jobs due to the closure of meat packing firm, while farmers who supply the French packer would also lose on business. The fact that innocent workers and farmers would be affected brings up the issue of the equality inequality principle of ethical dilemma. This ethical dilemma can be phrased as follows “Is it fair for the regulatory bodies to take away the jobs of hundreds because the firms acted unethically”. One may wonder whether it wouldn’t have been fairer for the regulators to let the French firm continue operating but under more stringent conditions and regular scrutiny. Conclusion In summary, business in modern times has no choice but to conduct their businesses in an ethical manner of face catastrophic effects. Under globalisation, EU has brought about increased opportunities in different markets and it is through EU that common policies are exercised. This is similar as in the case of the meat scandal where the horse meat having being claimed to be distributed in many parts of the EU region was the work of the union to come up with strategies of how there can be reduced distribution and come up with measures of how any meat can be tested to ensure its legality and its health condition. Nowadays, consumers have become more aware of their rights and more vigilant and have been empowered by advances in communication technology in their battle against unethical organizations. It is clearly shown that the attempt by organizations to self-regulate is bound to fail even as they fail to comply with legal requirement let alone the highest standards of ethical obligations. The EU has been keen to observe ethics in its operations and has identified that corporate responsibility entails carrying on business with the consumer in mind. Ethics means that the products given to the consumers are of the right standards and what the customer specifically wants. The meat scandal has been attributed towards not upholding the roles of corporate social responsibility as selling horse meat to many consumers in the region indicates that the business is unethical and through this, conflict is created and trust is lost by the consumers in the product. The stakeholder theory expects organizations to behave ethically while their motivation for existence is profit creation is naïve. However, with the presence of regulatory bodies, organizations which act unethically can expect dire consequences adding another reason for organizations to uphold ethical standards (Mail on Sunday 2013, p. 93). Finally the presence of a potentially harmful substance in the horse meat has brought into light the need for increased vigilance by food regulatory bodies in protecting the public from the unethical practice of mislabelling meat. References BBC,2013. Horse-meat scandal: EU launches immediate wider tests. viewed on 24 February 2013.Available at: http://www.bbc.co.uk/news/world-europe-21467989 Debreu, G 1972, Theory of Value: An Axiomatic Analysis of Economic Equilibrium. Cowles Foundation, Yale University, Yale. Gill, D 2004, Doing Right: Practicing Ethical Principle, IVP Books, New York. Heath, J & Norman, W 2004. Stakeholder theory, corporate governance, and public management. Journal of Business Ethics, 53:247–265. Interfax, 2013. "No horse meat from EU found in Russia - Onishchenko." Russia & FSU General News. 15 Feb. 2013: 1. Interfax, 2013. "Russia expecting additional EU guarantees for meat exports - Onishchenko (Part 2)." Russia & FSU General News. 21 Feb. 2013: 1. Jil, l and Lori, H 2013. Associated, Press. "Horse-meat Scandal Exposes Complex Food Chain." AP Top News Package. Mail on Sunday,2013. EU won't solve meat scandal 2013., 17 February 2013: 93. Saft, J 2009. Ethics without regulation won’t cut it. Viewed on 24 February 2013, http://blogs.reuters.com/great-debate/2009/01/30/ethics-without-regulation-will-not-cut-it/ Saul, J 2006, Development After Globalization : Theory And Practice For The Embattled South In A New Imperial Age, Zed, London . Spector, Y 2011, "Theory of Constraint Methodology Where The Constraint Is The Business Model", International Journal of Production Research vol. 49, no. 11, pp. 3387-3394. Stratton-Lake, P 2000, Kant, Duty and Moral Worth, Routledge, New York. Sturgeon, T 2008, "From Commodity Chains To Value Chains: Interdisciplinary Theory Building In An Age Of Globalization." IPC MIT working paper series. The Associated, Press,2013. "EU Ministers Call For Emergency Meat Testing." 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