Theory of Deontological Ethics and General Business Ethics - Case Study Example

Table of Contents Scenario 3 Introduction: 3 Body: 4 General Business Ethics: 5 Theory of Deontological Ethics: 6 Issues: 6 Solution: 7 Conclusion: 7 Scenario 4: 9 Introduction: 9 Body: 10 World Trade Centre: 10 Functions: 10 Example: 11 Uruguay Round: 11 Issues: 11 Religious Issues: 12 Conclusion: 13 References: 15 Scenario 1: Introduction: BASF, a German chemical company wanted to open their new plant in U.S.A. For this, they wanted a huge land of 1.800 acres. To setup this plant they require a huge number of cheap labour and fresh water for everyday use which would be near about five million gallons. The company spotted an area, near to seaside of the South Carolina; name is Beaufort, which could fulfill their needs of the company. The department of Beaufort was happy to deal with BASF. Since, the economic condition of Beaufort was not good. Even more, per capita income was low than average per capita income of U.S.A. It would benefit for the people of Beaufort because BASF was going to provide employment to the population of this territory. However, Beaufort is famous for a resort i.e. Hilton Head, which is internationally popular. This resort attracts many vacationers from the world every year. Management of Hilton Head was worried about the disaster of environment which could be caused by the chemical plant. The chemical plant could be affected to air and water of this territory. It could be cause for disastrous situation and the vacationers would stop coming in this city. A typical situation is arrived in front of department of Beaufort and the people of this city. This chemical plant could provide lots of employment to this city and their per capita income would also rise. They also concerned about the pollution which would be caused by the chemical plant. This whole situation comes under the moral and ethics of business in terms of environment. Governments of all nations are shows concern about environment regarding pollutions. Government and many NGOs are involved to protect the world from pollutions. Pollution is one of the major causes of global warming and the diseases to human being. There are preventions steps are using to stop pollution. Government also keeps tracking of this and started regulating the cause of pollution. Even though government has many policy on this, which should be fulfill by manufacturing industry before the start their business. This whole topic will carry out the business ethics and environmental ethics, which is based on theory of Deontological ethics It will provide a sufficient proof, which will show that BASF how good in these and what steps they are taking to deal with this problem. The whole case is related to a chemical plant and its concern about environment. It also provides the knowledge of business ethics and environmental ethics which should be taken by the manufacturing companies. It will help to learn about role and duty which played the BASF and its consequences. Body: It is a stage of globalization. Many companies are wanted to extend their role and wanted to earn high return on investment. Manufacturing sectors wanted to foothold into current market. It not only because to earn more, but make their supply chain strong. To do this, they are installing new plants in new locations to reduce their logistic budget and fulfill the demand of market. However, this new thinking might overlapped the business ethics, which harms the surrounding. The main issue with manufacturing industries, they dumped their waste materials without any proper treatment, which the cause of pollution and harmful effect to nearby surroundings. It is unethical activity, which performed by few industries. However, in chemical sectors, manufacturing industries produced lots of waste product, which may contains biohazard materials. It can be the cause of pollution and harmful diseases. Biohazard material even may destroy the freshness of water and can pollute the air. To stop and regulate this activity, government has formed many policies and department. They contain certain type of laws and rules and regulation to avoid this, which called as Business Ethics. All organization has to follow this to protect the surroundings. General Business Ethics: It is a specific study of principled rights and wrong, which concentrate on principled standards, which apply in organizations. Therefore, it counts as an application to measure the business behavior. It helps to understand what is right and what is wrong in business. It deals with certain laws, which are applied in business to perform. These laws are useful for every business to maintain their good image in market. If a business does not follow ethics, then their image in market will hamper and they have to suffer for losses in business. It is important for all business to follow the ethics. Even ethics in business, help in the growth and maintain good relationship with customers. In ethics, organization has to follow the rule and regulation which made by law system or government. Doing this in the business can provide better output and gives satisfaction. Since satisfaction to running business is also necessary for top management and employees. If a management or employee is not happy with their own work, then it will hamper the market and surroundings too. So ethics in business consider as an important part to make a good will in market. Theory of Deontological Ethics: Deontology Theory is a sub part of Normative Ethic. Normative ethics is used to find out the conclusion between rights and wrongs action. It helps to balance between right and wrong action. In other words, it is an ideal test to conduct for behavior. Deontological Theory state that a position to judge the morality of activities based on faithfulness law or rules. It also consider as a duty which is based on ethics. Issues: Here, main issue is with the environment and surrounding area. If BASF, setup their new plant in this city, then it could be the cause of pollution. In most cases, chemical manufacturing plants pollutes air, land and water. It effect the human begins, who leaves near by the industries. However, past track record of BASF was not good. Even, there was case with BASF in Germany. A plant of BASF in Belgium, which is situated near to Rhine River, was get polluted. Most of waste materials which contains harmful chemical were dumped in Rhine River by BASF plant of Belgium. This shows that the unethical process and carelessness of BASF in business regarding environment. A report says that due the harmful chemical waste products of BASF’ Belgium plant which was dumped in Rhine River was the cause of water pollution. Water quality of Rhine River was decreased, due to the presence of harmful chemicals in water was found. It killed many water species of Rhine River and destroyed the water biodiversity. Many fishes of Rhine River were killed due to the dumped products. However, BASF was able to solve this problem. They are now controlling the pollution, by using biological aquatic treatment processes. It prevents water of Rhine River to get polluted. Even though, it helps to preserve water biodiversity. It also helps in preventing the industrial misfortune and in reducing emissions of injurious product. They also introduced a new technique to survey of water biodiversity i.e. Electrical Fishing. It allows to counting and identifying the number of fish without any harming them, BASF, no date. Efficient Process. [Online]. Available at: http://www.basf.com/group/corporate/en_GB/sustainability/environment/efficient-processes. [Accessed on May 10, 2014] Solution: If BASF is willing to setup their new plant in seaside of Beaufort city, then they have to follow the business ethics regarding environment protection. Since it would be great joy for the people of Beaufort city that per capita income will raise. The people of Beaufort city will be employed. BASF has to show their moral duty in both aspects of protecting environment from pollution and for the people of Beaufort city who are going to be employed. Since, preventions are better than curare. To protect the environment and to make happy to the people of Beaufort city, they have to be ethical in their business. Before starting their plant in the city, they have to install some biological water treatment process to protect the collecting river to being disastrous. Even they should install some special chimney in their new plant to protect air and surrounding area. Conclusion: If BASF start their plant in Beaufort city and fulfill the demand of people, then many people of this city will get employed and start earning money and per capita income of this city also increase. To do this, first they need to show concern about environment and surrounding areas. It also helps Hilton Head resort for their vacationer, who love to visit and spent their vacation in this city. There are many methods to prevent the water pollution. Earlier, BASF had done the same job in Belgium city, near to Rhine River to protect the water biodiversity. To do this, they had installed a biological water treatment plant, which purifies the waste chemicals before dumping into Rhine River. They should also install chimneys in their plant, to control the air pollution. Chimneys are very useful in manufacturing plants to prevent the air to get pollute. There are many others methods are available in market to prevent air pollutions. Such are dust collection device, sewage treatment, scrubbers and many more. It will protect air to being disastrous from bio hazards. However, the Ethisphere Institute, which is an independent research centre for business ethics. This institute monitors every organization in world in terms of ethics. They till now, not consider the BASF as a world most ethical organization in chemical sector, Ethispher, 2014. Most Ethical Companies in the World. [Online]. Available at: http://ethisphere.com/worlds-most-ethical/wme-honorees/. [Accessed on May 10, 2014]. Scenario 4: Introduction: Nations and societies may differ in the context of values and ethics for running business. Every nations and societies have their own laws and culture of work, which could be similar or different. These similarities or differences of values and ethics in business are solved internally by nations and societies among them. In this world, there are huge number of countries and societies, and all are different in culture, religion, work style, philosophical literatures and tradition. These things create different ideas and moral for organizations and business life. So the different organizations and business have different values and ethics in working. These are necessary to achieve their targets and growth of organization and business. Within a nation or society, they may have sets of approach values to concerning organization and business. In Muslim countries, they may have different approach of work. Since, in Muslims countries, there are differences between modernized people who desire to work to values of globalization where as some people want to implement tradition Islamic values in business. Even if nations and societies comes together and share their same values but they may vary in ethics. It might be possible that two nations are at formal level in bribery as immoral, but one nation might implement this in their standard business and other might not. These all things have different consequence if two nations and societies are working together to run an organization and business. It may have good or bad impact to between two nations and societies. In this condition, there are many questions are arise. The first one, asks about the differences and similarities between nations’ and societies’ values and ethics that concerning business to running. The second one asks about the justification of differences in practice to run an organization and business in different nations and society. The third one deals, whether these diversities or differences in values between nations and societies could be the advantage over international organization and business. Body: World Trade Centre: An organization called World Trade Centre (WTO), who deals with the issues of trading between nations and societies. It is build to supervise and free international trade. This organization was started on January, 95 by replacing the GATT. The organization, main function is to monitor the trades between participating nations. It gives a platform to all participating nations to build a framework for formalization and negotiation to run the business. It helps to solve the disputes and a fair mutual agreement between nations. Functions: The implementations, operations and administrations are covered in the agreement between nations. It provides a platform where the negotiation and dissolving the dispute can happen. As we know there are many differences in the work culture and values of nations. To solve this type issues WTO help them. Example: Uruguay Round: This was started in November, 82 at a meeting of ministries of GATT in Geneva. In this meeting, agendas were related to agriculture subsidies to be reduced, to remove the restriction from foreign investments and to start new process of trade in service industry like insurance and banking. They also wanted to deal with intellectual property rights, World Trade Organization, no date. The Uruguay Round. [Online]. Available at: http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact5_e.htm. [Accessed on May 10, 2014]. Achievements: These issues came to end after the establishment of WTO. The WTO was able to solve this problem with new settlements and agreements among all participating nations. The settlements and agreements are structured into six parts: Umbrella agreement Services Intellectual property rights Goods and investment Dispute settlements Reviews of trade policies of governments Issues: The Japan culture and values are very much different from the world. Even the culture of Japanese is different from Indian and Chinese culture. In Japan, values traders count as status of merchants, where as in India and China is just opposite and questionable. The work culture trust of Japan is based on contract basis agreements whereas in India and China it base on personal relationship between traders. Japanese traders are more interest in long term goal whereas in India’ and China’ traders want immediate result, perhaps in short term goal. The reason behind this is different values and ethics in business is because of different work culture of these nations. Whereas, there is large gaps between these nations in terms of information of business module sand structures. Japanese are always interested to export their goods in European and United States’ market. They have least interest in market of India and China. They have never shared their business strategies with overseas market, they are strict in this. There may have a possible chances of clashes between U.S.A’ and Europe’ market. However, Americans are good in dealing and negotiation in business. Americans are considering as expert of negotiation and dealing, that’s the reason Japanese shows more to U.S.A. They neglected the old the disputes and ritual matter between them. Religious Issues: However, religion and old tradition are also having grater impact in business ethic. For example, the view of interests in Bible which are expressed, unlikely Islam is not. Christianity has talked about the modernization but Islam there is nothing about this, so that follow their old tradition and implement into their business as ethics. Such as, in Muslim culture has own financial method which works without the term of interest. The term interest in Muslim culture is prohibited. Muslim can made loan but without any interest on it, stated by Islamic law called “Sharia” (Failaka International, 2001). Islam stated that exchange of money has no deep rooted value. The value is defined as a human efforts which behind of transaction and exchange. They follow as principle of Muslims and believe that money is not for money. Islam never stopped to be an entrepreneur to Muslim people. Since, they share their profit and losses with the financier in terms and condition of pre-agreed ratio. Nevertheless, Muslim can makes contact for loan to western bank and financial organization, this based on interest, which is forbidden in Islam. Another critical problem in Islam is Credit Card system. Since, credit card system also based in interest. However, this is permitted for Muslim through the help of “Bai Muajjal” form as a contact. In this system, the bank and financial service organization or goods provider, sales goods or provide money to client in at agreed fixed price which have profit percentages. This is proper way because in Christianity, it is very much acceptable to ask person as a charge at high price. Only one bank can provide credit card to Muslim in based on “Bai Mujjal” form of agreement (Failaka International, 2001). Many banks are now follow this term and condition to provide loan for business and personal work (Arif, 1988). This is a good example of how the circumstances and situations could be adapted as an unpredictable to follow the ethics and values. Conclusion: There are many attempts to produce a global ethical standard. Yet, they have not met an influence on international business. There are lots of evidence and proofs that people of different nations have different opinion and values which they apply in their business to run. Whereas western culture has developed in their business due to their goods ethics and values and now other developing are trying to follow this and implementing in their business for growth and development. Its necessary to all nations, specially developing nations should follow a standard ethics and values for their development. Many global standard rules and laws have been written to implement in international business, but they are following by some nation or even not accepted by them. This may happen because all nations and societies have own values and ethics to measure the business. However, country like America has unique point of view in this, which let them help in their business growth. The countries of eastern part have own values and ethics for business, which are mostly bounded with religious issues. Whereas, American business are believe in challenge and integration values. It does not mean that if a nation or a community accepting new tradition is a long term benefit for everyone, since it is authenticate to that place. If this is so, then all international companies and organizations have to adapt new rules and laws which will be based on moral and have to ready for future challenge in business. This new change will bring one standard of rule and laws which be helpful for multinational companies. Otherwise, they need to show a willingness to learn about new culture of those particular nations in a good manner. References: Ethispher, 2014. Most Ethical Companies in the World. [Online]. Available at: http://ethisphere.com/worlds-most-ethical/wme-honorees/. [Accessed on May 10, 2014]. McGuire, K, 2010. New tests find higher level of chemical Hannibal water results prompt question about state’s disclosure delay. [Online]. Available at: http://www.stltoday.com/news/new-tests-find-higher-level-of-chemical-hannibal-water-results/article_bbfffd8b-eddf-59db-b7ed-c8a62261a03e.html. [Accessed on May 10, 2014]. Henley, D, 2010. BPW: Chromium-6 findings require no water treatment changes. [Online]. Available at: http://www.hannibal.net/article/20100212/NEWS/302129861?view=print. [Accessed on May 10, 2014]. Evertiq, 2006. BASF’s environmental efforts recognized. [Online]. Available at: http://evertiq.com/news/5235. [Accessed on May 10, 2014]. BASF, no date. Efficient Process. [Online]. Available at: http://www.basf.com/group/corporate/en_GB/sustainability/environment/efficient-processes. [Accessed on May 10, 2014]. American Chemistry Council, no date. Toxic Substances Control Act. [Online]. Available at: http://www.americanchemistry.com/Policy/Chemical-Safety/TSCA. [Accessed on May 10, 2014]. Davies, J, no date. The Effects of Federal Regulation on Chemical Industry Innovation. [Pdf]. Available at: http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=3725&context=lcp. [Accessed on May 10, 2014]. GOV.UK, 2013, Guidance: Chemicals Intrentional Trade Regulation. [Online]. Available at: https://www.gov.uk/chemicals. [Accessed on May 10, 2014]. Society for Chemical Hazard Communication, no date. International Chemical Control Law. [Online]. Available at: http://www.schc.org/international-chemical-control-laws. [Accessed on May 10, 2014]. 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