Globalization and Sustainability - Australian Chocolate Manufacturing Firm and Cocoa Bean Broker - Case Study Example

Business Ethics, Globalization, and Sustainability (Chocolate Unwrapped) Name Institution Introduction One of the basic responsibilities of the management of any organization is to maximize profits for the shareholders as well as representing the intentions of the shareholders. However, despite the social responsibility of businesses to increase their profits, as stated by Friedman (1970), the organization must also be socially responsible to the society and take a moral stand of their actions. Just as the managers of any organization do respond professionally to the interest of the organization’s shareholders, humanity also responds ethically to their actions. In line with their corporate culture, many organizations have decision making structures that are internal managed in terms of their set of beliefs and values that accomplish their set goals and objectives (Geirsson & Holmgren, 2000). More than that, as argued by Sims (2003), the social issues and problems add also to the total responsibilities of every organization because organizations must be socially responsible for their actions that affect the society directly or indirectly. In this case therefore, corporations have moral responsibilities that extend from individuals to the societies. Case analysis The process of making the famous chocolate passes through numerous stages that first begin by farming of the initial product of chocolate. Chocolate is actually a by product of cocoa, planted as a normal plant. Its seeds are peeled to remove the milky components that are packed and processed to other products including chocolate. In this case therefore, the first step in manufacturing chocolate is identification of the cocoa supply. The case in this study discussed here involves two firms, the Australian Chocolate Manufacturing Firm and Cocoa bean broker. Initially, the firm was purchasing (being supplied) cocoa beans from Mexico, but a better supplier was found in Cote D’Ivoire, where the cost of supply was somewhat 40% cheaper than the supply from Mexico. From the business perspectives, it is important not to close a contract with the supplier if an alternative supplier has not been sought considering the future impending and prevailing risks. Suppliers are very important stakeholders of any organization in the profit-making sector, and since the sole mission of every management is to maximize profit fro its shareholders, then pre-contractual agreements without considering the impending consequences may become serious problems to the firm from the business perspective. The case takes a centre business focus when the two parties negotiate a two year deal, as a two year fixed price contract with a Cote D’Ivoire local broker at the expected 40% lower than the Mexican price. The problem arises from the management practices and working environment of the brokerage firm in Cote D’Ivoire. Instead of employing adult, mature, and educated workers, the brokerage firm employs young boys and girls to be working on the cocoa plantation. First of all, one of the social ethical responsibilities as discussed earlier is that any corporate firm must have some level of moral responsibility that is more than the responsibility of the individual constituting the corporation (Sims, 2003). There are ethical dimensions that surround the kind of employment patterns that a firm uses. The workers must be socially, physically, and professionally mature and oriented. Employing boys and girls in the cocoa firm is morally unjustified (Herumin, 2007). Child labor is unacceptable code of conduct both socially and culturally (Herumin, 2007). Children need time to develop their mental skills and to identify their abilities through going to schools. It is a chance that everybody, especially the cocoa broker and the manager of the Australian firm in this case got through childhood education that progressed to tertiary education. Denying children the opportunity for education is an ethical and legal offence punishable by law (Hindman, H2009). No mater the excuse that a firm may have, for instance being orphaned, it is immoral to employ boys and girls in your firm, people that are still young, still developing their minds and thus easy to manipulate and afflicted. According to Weiss (2009), there are some management decisions that are made, yet they have serious effects on others. These decisions are the ethical decisions. These decisions ones made have significant ends of effects on others. However, as stated by Weiss (2009), these decisions are normally surrounded by choice since there are many other alternative choices, alternative choices tat are socially perceived as ethically relevant to one or more other parties involved. Employing children in the cocoa firm as described above is unethical decision that affects many members of the society negatively. However, there are many alternative choices that such cocoa firms can employ successfully without employing children in order to make profit. Joblessness is highly prevalent in Cote D’Ivoire, and this can be the chance of the cocoa broker to create a properly and ethically accepted employment of adults looking for employment in this sector. The noticeable scanty clad of children working in the cocoa field at the first sight reveal more about the working conditions on the firm. As the boys and girls squat together in groups, opening seed pods by cracking and snapping them with machetes, as well as emptying the milky white cocoa beans from the pods and throwing the beans into piles for collection by the brokerage company, their working conditions is laid open for ethical judgment (Hindman, H2009). The intensity of child labor effects is making their working environment very poor. Through aspects of fear and molestation, children can undergo through adverse conditions in such fields that can even lead to death. Basically, before a manager makes any management decision, there are factors to consider. One of the factors to consider is the ethical dimension of the decision to be made and how it would affect the company and the society at large. According to Geirsson & Holmgren (2000), ethical decision making follow a sequence that starts by recognizing the moral issue of the decision to be made. A critical analysis of the morality of the objective to achieve must be considered before considering the moral judgment that may follow the decision (Geirsson & Holmgren, 2000). More importantly, the moral judgment is best examined if the management put in place the moral intent that is actually in line with the moral behavior that links the corporate decision making to the society. In addition, since the corporation depends directly and indirectly on the society, the points of payback to the society must be within the morally ethical context (Sims, 2003). Consider the diagram below: Figure1: stages in ethical decision making From the figure above, the ultimate decision made by the cocoa broker to use young boys and girls, summarized into child labor, did not have the moral ethical intent. More importantly, the situation should be subjected to a harsh and justified moral judgment by the relevant authorities that fight to prevent child labor. The second ethical fact that the cocoa broker failed to understand and adopt is the aspects of the moral behavior that surround working environment. According to Geirsson & Holmgren (2000), employee motivation initiative and orientations as also echoed by Maslow, whose hierarchical framework of employee motivation levels made a significant boost to working relationship knowledge to many organization and human resource management firms. According to Maslow’s need hierarchy, the motivation of workers is not a matter of chance or advantage, but encompasses different provisions. Some of these provisions are emotional in nature and extends to varied satisfaction agendas (Weiss, 2009). The children, being orphaned may fail to have a modernized career agenda in their lives due to aspects of desperation and luck of parental guidance. However, the intent to mistreat them by making them to work profusely in cocoa plantation lacks the moral and ethical orientation. The behavior of the cocoa broker at this stage so far is unethical. The economic of labor demands that labor qualifies to be labor if payment is involved. Although there should be other benefits that are associated with working for a particular firm, such as food, wages are the pivotal link between working and workers. Actually, labor demands wages. Many labor unions and movements have been formed in the past decades to protect the plight and welfare of workers. One of the corporate roles is also to ensure their workers are paid in time, order, and according to the input. Upon realizing that the brokerage farmer of cocoa that I have entered into a two year contact with has immoral behaviors that surround the ethical etiquette of business, it is critical that I don’t sign the contract or sign the contract under conditions of changes. These changes must include no child labor involved, better working conditions to workers that extends to payment and others (Hindman, H2009). It seems that the normal situation in Cote D’Ivoire has serious moral deficiencies considering the number of children working in the firm. Their working conditions being reduced to fear, no pay, inhuman treatment and others, has made the circumstance surrounding the contract to become compromised. Through comparison of the situation and prior visits to Mexico, it was notable that while cocoa harvesting was hard work, conditions for Mexican workers were generally better. In Mexico children are mostly absent from plantations, and receive compulsory primary schooling from the government. Unlike Mexico, in Cote D’Ivoire children work in cocoa plantation in large numbers otherwise risk being conscripted as child soldiers, or perhaps end up in the child sex industry. The normative ethical theorists conflict greatly with these unethical management behaviors as practiced in Cote D’ Ivoire. According to the normative ethical theory, businesses decision making pacts must be within the correctly ethically prescribed acts (Sims, 2003). They must be guided by the rules and principles of right and wrong. The cocoa farmer knows it is very wrong to hire children as your laborers ethically. In addition, the broker knows very well it is not ethically and morally justified not to pay your workers in this case. Utilitarian Analysis of the case John Mill gave a utilitarian approach on moral behavior that assumes that in an ethically normal situation, actions are right in proportion as they tend to induce happiness and at the same time can become wrong in the event the tend to induce a reverse of happiness. According to Mills, happiness is pleasure that is present and can also be described as the absence of pain. In this case, pleasure can differ in quality and quantity, and pleasures that are rooted in one's higher faculties should be weighted more heavily than baser pleasures (Geirsson & Holmgren, 2000). Furthermore, Mill argues that people's achievement of goals and ends, such as virtuous living, should be counted as part of their happiness. The cocoa broker in this case denies the children their happiness as described by their being in scanty groups and not being paid out of their labor. Their condition of working is determined by their fate that in the event they don’t work in the cocoa farm, their only alternative is to be taken as child soldiers or be absorbed in the commercial sex industry. Utilitarianism offers a relatively straightforward method for deciding the morally right course of action for any particular situation we may find ourselves in (Geirsson & Holmgren, 2000). To discover what we ought to do in any situation, we first identify the various courses of action that we could perform. Second, we determine all of the foreseeable benefits and harms that would result from each course of action for everyone affected by the action. And third, we choose the course of action that provides the greatest benefits after the costs have been taken into account. Kantian Analysis of the case According to Kantian theory of moral justice, morality applies to all rational beings, and a moral action is defined as one that is determined by reason, not by our sensual impulses. Dicker (2004) explains the Kantian ethical relations to morality that an action is moral on account of its being reasoned, the moral worth of an action is determined by its motive, or the reason behind the action, not by its consequences. The free will and autonomy of making the ethically right decisions will not only measure actions but also observe the ethically driven laws governing our internal and external environment (Tampio, 2012). From the ethical dimension, Kantian theory argues that reason is not the only source of morality but also the measure of moral worth of an action (Fairbanks, 2000). The rationality can be subjected to immoral or moral acts that lead to moral judgment and behaviors. From the Kantian theory, the cocoa broker has the immoral reason that backs his treatment to the children after unethically employing them to work in the scanty areas of the cocoa farm. The summary of the corporate social responsibilities has all the components of what the society desires from the firm, what the society expect, and require from the firm. Basically, all the economic, ethical, legal as well as philanthropic responsibilities of the firm to the society are summarized in the nature of the corporate social responsibilities. According to Carroll (1991), the pyramid of corporate social responsibility can be well represented in the following model shown in the figure below. Ethical Responsibilities (Expected by the society) Legal Responsibilities (Required by the society) Economic Responsibilities (Required by the society) Philanthropic Responsibilities (Desired by the society) Before making any decision, it is important to consider ethical concepts such as the traditional ethical concept that attach motivation and principles to actions and outcomes. Every decision that a manager takes has either positive or negative consequences. Just as the utilitarianism argues that an action is morally right if its results benefit many people who get the greatest amount of good from the action (Weiss, 2009). In as much as cocoa is an important raw material for chocolate, its production must not include children, because this would not derive any happiness for them and the firms involved would be ethically judged wrongly. The ethics of duty demands consistency, human dignity, and universality. In the same way, the ethics of rights and justice demands natural rights of individuals, justice, and limits (Geirsson & Holmgren, 2000). Travelling back to Australia and purchasing some of the special chocolates made by my company for nieces and nephews at home, my worries run through the children and my children wondering what it would be like for them to grow up in the Cote D’Ivoire as orphans, indirectly employed by my company to harvest ingredients for Australian made chocolates. Given the outcome of the above analyses, I would recommend that my organization does not enter into the contract with the broker from Cote D’Ivoire or enter into the contract subject to some serious changes. The inhuman nature of treatment towards the children working on the firm is very unethical and may ultimately damage the reputation of the organization. Secondly, the aspects of child labor in order to source the raw materials can eventually sound bad to the organization’s culture and social stand as well as its responsibilities to the society. In addition, child labor is not morally and ethically justified. As described by the utilitarian and the Kantian arguments, my partner in contract may justify his management techniques in favor of profitability, yet that reasoning leads to immoral actions. Suppliers being important stakeholder of an organization may jeopardize the company’s goodwill and market position. References Allison, H. E. (2003). Kant's theory of freedom. Cambridge [England: Cambridge University Press. Brandt, R. B. (1995). Morality, utilitarianism, and rights. Cambridge [u.a.: Cambridge Univ. Press. Dicker, G. (2004). Kant's theory of knowledge: An analytical introduction. Oxford: Oxford University Press. Fairbanks, S. J. (2000). Kantian moral theory and the destruction of the self. Boulder, Colo: Westview Press. 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