The Usefulness and Application of Ethical Egoism - Case Study Example

Corporate Ethics and Governance Part A Environmental degradation is a very important topic concerning the world today and different groups as well as organisations focus on various ways and means in which they can help the environment rather than harm it (Green, 2005). Corporations are no exceptions since government pressure as well as the opinions of consumer groups can force them to be friendlier towards the environment (Schulte, 2006). Of course human activities, as well as the actions taken by corporations, both have had a visible impact on our environment and this has been recognised by our government on several occasions where laws were made to ensure a bare minimum which is done by corporations to make it clear that they cannot destroy the environment altogether in their relentless pursuit of profit (VonAncken, 2006). However, today doing the bare minimum is no longer enough since consumers demand that the company or the brands which they support also become ethical and responsible. For companies such as Cadbury Schweppes, the reason why they have to focus on being ethical producers who show their concern for the environment is simple. The reason is the emergence of the ethical consumer who is special because s/he finds solace in the fact that the purchase decisions made by him/her are actually helping the environment rather than hurting it (Ethical Consumer, 2006). Thus by being friendly to the environment, they are helping their stakeholders and their shareholders. Cadbury Schweppes knows that ethical consumers will make purchase decisions that are influenced to some extent by the operations of the company and the level of ethics that the company shows. Therefore, the company makes it very public that they support environmental causes and even make it point to tell the consumer that the trucks they use and the operations they have with Cocoa farmers are all environmentally friendly (Cadbury Schweppes, 2008). Of course the company does not clarify if the trucks are being run on alternative fuels nor do they explain the exact contracts they have with cocoa farmers, but they still suggest that their operations are quite environmentally friendly. Fundamentally, the ethical theory which seems to be applicable to Cadbury Schweppes or companies like it is the theory of ethical egoism. The company wants to have a positive image since that positive image will translate to more sales and thus be a real benefit for the company rather than a monetary loss. Simply put, at the very root of business and retailing is the image of the company and the presentation of the company to the consumers. If that image is positive, then the company will remain a good company to buy from if other things are equal. If the image of the company is negative in any aspect, the sales might start dropping (Brown, 2005). The usefulness and application of ethical egoism becomes clear when we see that Cadbury Schweppes actually pushes that image to the consumer much like any government would want to be seen as an ethical government (Yeatman, 2004). As the company is dealing with consumer good and consumable confectionary items, the idea of reliability, being environmentally friendly and good for the world in general is an important part of the company’s image and therefore the company considers that to be a part of its social and environmental responsibility (Cadbury Schweppes, 2008). Undoubtedly, Cadbury Schweppes has made significant investments in ensuring that they have cocoa suppliers and have setup their bottling plants with the aim of making a profit but in their search for profits they have to also consider ethics issues. They support recycling drives, help and support nature preserves and even provide assistance to poor cocoa farmers (Cadbury Schweppes, 2008). However it must be noted that all these steps appear being taken because the company wants to appear to be ethical and environmentally friendly. Had there been no push for companies and individuals to be more aware of environmental situations, it is not likely that Cadbury Schweppes or any other company for that matter would be focused at all on the environment or even notice the issue of global warming. Ethical egoism may seem like another version of corporate greed but the reality of the situation is that it is the one ethical approach which seems to work beautifully for corporations. In fact, it can be shown that other approaches such as utilitarianism or universalism may fail when it comes to making companies such as Cadbury Schweppes behave ethically. For a company seeking to make profits, the approach for business ethics can not be based on utilitarianism since this ethical theory would ask a business to do whatever would bring the most benefits for everyone in a given society (Lachapelle, 2005). This would lead to an ethical problem since the basic principle of a business working for profit is to beat the competition and such competition will mean that some individuals within the society will lose out because of the actions of the company. Thus a company can not follow utilitarian principles without also looking out for the interests of the competition while the idea of looking out for the interests of its employees, shareholders and even customers would run contrary to that. As soon as the interests of the company’s stakeholders are made to be the most important ones for the company, the interests of the rest of society who may not be stakeholders in the company can be ignored altogether. This problem comes with the utilitarian principles and would make all businesses to act as non-profit companies. As we have a capitalist system with a liberal economy, competition is seen as vital for the interests of business development, in these circumstances the utilitarian approach become difficult to follow (Drydyk, 1991). The theory of ethics which comes under universalism also fails although it is a more optimistic one concerning the removal of differences between the demands of a corporation and the demands of society. For a company, taking a universalistic viewpoint would mean that the company would have to cooperate with the competition and try to seek common grounds with all individuals in a society to see what compromises can be made by them with regard to any issue. While consumers and governments might want the company to reduce its polluting activities by incurring higher costs, the company stakeholders may not want to make such compromises. In fact, the shareholders and investors of the company may prefer to see increased company’s profits while environmental concerns on cocoa farms located thousands of miles away could actually be immaterial to them. Overall, it is clear that the actions being taken by Cadbury Schweppes are quite legitimate since the company is doing its best to show the public that it is a responsible business which cares about the environment and allied issues such as global warming (Cadbury Schweppes, 2008). There is certainly a gap in the process of reporting on the issues but that is a common problem across many different companies (Adams, 2004). While we do not get more details about Cadbury Schweppes and the company is also short on the exact data as to what carbon emissions levels were reduced by the company on a yearly basis, it does provide comforting cartoon images on its website to convince us that it is doing all it can to help the environment. While it is certainly possible to object to this approach because we do not know if the company is doing enough to help the world, nor do we know if the company is even doing all it can, we are reassured that it is. Word Count: 1,269 Part B Through recycling, water conservation, and more efficient technology, people and companies have made great strides in becoming more environmental responsible. However, these efforts still fall short of what is needed for long term prosperity on Earth. While the ecosystem has some abilities to correct or heal itself, the limitations on the damage it can sustain are quickly approaching. It is vital that more people and companies begin to recognize the seriousness of these issues and start taking personal responsibility for the environment (Gupta, 2004). Within this scenario, Cadbury Schweppes is one of the many companies involved in a proactive approach towards the protection of the environment. Through many projects all over the globe, the company is involved in cleaning and developing water resources, recycling, and contributing towards the general health concerns of the people who consume their products as well as those who are affected by the company in case of employment and presence of their industrial facilities (Gupta, 2004). The company has a mainstream active approach towards the sociological and psychological effects of any product marketing it may have and has deliberately diverted its campaigns to lose focus in many channels of advertising to make the learning environment for many of its young school going clients more productive and non-influential to help their development. As Cadbury Schweppes has grown out of the basic can dos of the responsibility that the normal companies take up and they have fostered a leading role in amalgamating family values and social ethics into their operations, they follow an instrumental approach towards fulfilling environmental ethics (Cadbury Schweppes, 2008). The model of instrumental decision making is very strongly implemented throughout the corporate governance of Cadbury Schweppes. The management of the company has taken a serious stand to translate the values of the founding members of the business to implement them in today’s society in the same fashion as they had been intended to be. For the very purpose, the company has extended its human resource development programs and investment in the development of society and values along with their commercial operations. These operating values are a strong replication of the business mission of the company, which states, “working together to create brands people love.” The stakeholders stand for this mission objective and the company’s instrumental approach towards the betterment of life of people along with their brands is self explanatory (Cadbury Schweppes, 2008). The company states that it has outgrown the minimum contributions that most of the companies have held on to incorporate an establishment where they have just stopped at bare minimum standards set by the law to meet re-cycling, toxic materials disposal rules, and greener packaging for their products. Many, highly cynical of the business world and the types of behaviour that appear to be natural outcomes of the competitive pursuit for profits, frequently describe business reasoning or morality as Machiavellian. They believe that whatever behaviour or action it takes to get business is justified by those in business (Gupta, 2004). When it comes to Cadbury Schweppes, the company has taken into account the need for a long lasting community involvement for a better service through many of their outreach programs. In today’s market the consumers are looking for not just a product but what the company stands for and its values. People are concerned about their health as well as the environment they live in. people also want to be dealt honestly and want a brand to make them feel right at home so that they can own the name to the safety of their children (Aguilar, 1994). Furthermore, if they are not comfortable with the answers, people vote with their wallets and find alternative suppliers. As employees, they vote with their feet and seek other employment opportunities. Global connectivity and business visibility have helped pierce the corporate veil, shedding light on individual and corporate character traits. Instead of focusing only on actions, accountability has extended to include assessment of companies characters as being good or suspect characters (Aguilar, 1994). Recent failed corporate leaders have been the target of character assessment as well as financial scrutiny. In the case of high profile American lifestyle guru Martha Stewart, although the very human stories behind her actions enthralled global audiences, she was eventually convicted and sent to prison for lying and not, as many assumed, for insider trading. She was never, in fact, charged with insider trading but only with making false statements and obstructing justice during investigations (Aguilar, 1994). The naming and shaming tactics being used in business scandals and company collapses suggests that a focus on character and personality will become an even more popular prism to assess the ethical fitness of the business world. From a virtue ethics perspective, what is seen as the right business decision will be one that accords with what a person of good character would deem appropriate or whats accepted by the general public as being the right thing to do. Similarly, the division between personal and professional accountability has converged to the extent that unacceptable behaviour in either arena will call into question both character integrity and suitability (Aguilar, 1994). The doctrine of private vice/public virtue is no longer acceptable to a cynical society exasperated by the profligacy of public office. With the democratisation of capital, it is no longer faceless shareholder money but increasingly our money in terms of superannuation payments and Mum and Dad investment dividends that business is risking. The barometer of public acceptability has swung inexorably towards warm and sticky (Aguilar, 1994). Virtue ethics applied in the case that led to the resignation of former Australian Governor General, Archbishop Hollingsworth. In this case, decisions made in his professional capacity in the church--albeit in what he determined to be the long and distant past--called into question his suitability for the state office of Governor General. This is becoming a distinctive feature of modern public life. The concept of public virtue/private vice has no place in 21st Century society, as was seen in the famous case of the then Lord Archer--now humble Geoffrey Archer--whose attempts at concealment of a felony were exposed in Court, resulting in a gaol term, loss of political office and stripping away of his peerage. Such public accountability has now extended to the business world and its leaders (Aguilar, 1994). Many researches may have linked the emotional intelligence of leaders to the performance of their organisation and shows how the leadership style of the person at the top tends to replicate itself at every level in the organisation. The more a leader exhibits competencies like empathy, nurturing, motivational skills, and positive interpersonal skills. The more stable and positive the emotional and social climate of the organization, and the better the business performs, as measured by profit growth, growth in sales, return on investments and achievement of business goals. Conversely, when leaders do not have employee confidence or commitment, organisational performance suffers. The most important message system in any organization, therefore, is the behaviour model of those at the top (Aguilar, 1994). Word Count: 1,178 Works Cited Adams, C. 2004, ‘The ethical, social and environmental reporting-portrayal gap’, Accounting, Auditing and Accountability Journal, vol. 17, no. 5, pp.731-757 Aguilar, F. 1994. Managing Corporate Ethics: Learning from Americas Ethical Companies, Oxford University Press. Brown, R. 2005, ‘The ROI of Diversity’, Mortgage Banking, vol. 65, no. 12. pp. 111-113. Cadbury Schweppes. 2008, ‘Environment, health and safety’, [Online] Available at: http://www.cadburyschweppes.com/EN/EnvironmentSociety/Environment/ Drydyk, J. 1991, ‘Capitalism, socialism, and civil society’, Monist, vol. 74, no. 3, p. 457-478. Ethical Consumer. 2006, ‘Why Buy Ethically?’ EthicalConsumer.org, [Online] Available at: http://www.ethicalconsumer.org/aboutec/whybuyethically.htm Green, J. 2005, Reducing Air Pollution. Gareth Stevens Publishing. Gupta, A. 2004. Human Values In Management, Ashgate Publishing. Lachapelle, E. 2005, ‘Morality, Ethics, and Globalization: Lessons from Kant, Hegel, Rawls, and Habermas’, Perspectives on Global Development & Technology, vol. 4, no. 4, p. 603-644. Phillips, R. 2003. Stakeholder Theory and Organizational Ethics, Berrett-Koehler. Schulte, B. 2006, ‘Turning up the Heat’, U.S. News & World Report, vol. 140, no. 13, pp. 34-37. VonAncken, E. 2006, ‘Air Pollution: Our Impact on the Planet’, School Library Journal, vol. 52, no. 4 pp. 67-68. Yeatman, A. 2004, ‘Right, the State and the Conception of the Person’, Citizenship Studies, vol. 8, no. 4, p. 403-417. Read More