Ethical Business Behavior at Anglo American and Primark - Essay Example

? Ethical Business Behavior Table of Contents Introduction 3 Ethical Business Behavior of Organizations - Anglo American and Primark 4 Conclusion 7 References 8 Introduction In business practices, ethical concerns play a significant role, and much research has also been undertaken in this field. The ethical concerns become important in situations of asymmetric interaction across organizations. This study explicitly addresses the different areas of how to monitor, manage and evaluate the ethical issues in the organizations. The ethical culture and values of every organization depend on its persona. The bottom line is that the conceptual framework in the organization is laid upon the ethical framework. This study would include assessment of two famous organizations called Anglo American and Primark on the basis of their ethical practices. Ethical business practice is like a hot selling cake in the global market, but the question is that how many organizations are following them too. Formulation is easy, but implementation, control, monitoring and evaluation of the same are tough and require knowledge and expertise (Svensson, & Wood, 2011, p. 2-3). The study would begin with a brief overview of business ethics in organization and its significance, further leading to detailed description of the essay structure. In the body, a comprehensive discussion regarding the ethical business behavior has been presented, followed by ethical business practices of Anglo American and Primark. Furthermore, a cost benefit analysis has been drawn to show that how ethical business practices benefit organizations and reduce cost. In order to support the view point, Svennson & Woods’ Model has been utilized to throw light on other facade of ethics and its importance in business. Finally a conclusion has been included to summarize the learning and to highlight the key areas from the study. Ethical Business Behavior of Organizations - Anglo American and Primark Most of the newspapers are filled with the names of those executives or organizations that follow unethical practices. Companies like Tyco International, Global Crossing, Parmalat, Systembolaget, WorldCom, Qwest, Arthur Andersen, Barings Bank, Enron, and Skandia (Carroll and Meeks, 1999) have all come to eminence on immoral grounds. Across the world it has been seen that eminent personalities, highly influential people, etc have faced issues due to their unethical practices. The word ethics has many nuances. It basically deals with the enquiry of morality and setting grounds based on the morality to make judgment, standards, or code of conduct. Business ethics deals with standards, principles or values which draws the line between wrong and right organizational practices (The Times Newspaper, 2011, p. 1-2). Ethical misconduct has become a major issue in the organization nowadays. The resource center for ethics, National Business Ethical Survey (NBES), has conducted a survey among 3000 US employees in order to collect reliable data on the ethical practices of the organizations. It was found that about 49 percent employees reported to have seen at least one type of misconduct was surely seen in their organization. About 63 percent of the employees reported about such misconduct to the management (Ferrell, & Fraderich, 2012, p. 8). The results depicted that almost all the organization were the victims of unethical practices. Ethical business practices comprises of assuring that the maximum lawful and ethical standards in case of maintaining relationships with the organization and its people (Anglo American, n. d.). Anglo American is an American mining company, who are highly committed to follow the ethical business standards for conducting business. They also include their employees in their campaign of following ethics in business. Even the stakeholders of the company are not exempted from the policy of ethical business practices of the company. The company has independent whistle-blowing facilities for both internal and external stakeholders of the company. They help in reporting the unethical business practices anonymously (Anglo American Business Integrity Compliance Department, 2011, p. 2-3). These include corruption, bribery, breaches, theft, discrimination, environmental damage or illegal accounting practices. The company has Speak Up services in every country, where they have established business. The people are requested to lodge their complaints through this medium. Primark is an UK based company which mainly deals in garments and accessories. The target customers of the company are the fashion loving customers who want value for their money. So the company follows a simple strategy of making clothes with simple and trendy designs, uses the local fabrics, focuses on the most demanded sizes and does not spend heavily on advertising. Here the discussion is not focused on the marketing strategies, but on the ethical practices of the company. Primark works with various third party suppliers, so they are always concern about the ethical sources (The Times Newspaper, 2010, p. 1-2). The company has a solid stand as far as business ethics is concerned. The company involves the employees all across the globe to monitor its business process, so as to maintain ethics in its operational functions. The company considers it a global brand and based on such conceptions it is bound to function ethically. Primark offers best product, but not at the expense of their customers. Primark manufactures it products under good condition and the employees in the factory are well treated. It also has a well-established relationship with the stakeholders, such as the shareholders, employees and the customers of the company. There is no discrimination within the organization, the working conditions are safe and health, and child labor is strictly prohibited. One of the well established myths is that ethical business practices are generally costly and time taking. The fact is that company which genuinely follow ethical business practices are the top companies of the world, few being exceptions. Anglo American is a company which sets its goals each year during its sustainability development. These goals includes functioning without any fatal accident, enhancing diversity, boost the benefits of mining for the local areas too and energy efficiency (Boone, & Kutz, 2009, p. 59). These goals help in gaining competitive advantage and make Anglo American the partner choice for governments and other communities in the world. It also boosts the position of Anglo American in the stock market and attracts investors to invest. All the stakeholders get benefited in this approach. The company has to bear no extra cost for doing clean business, though for ethical operation some extra cost can be considered, but there are end numbers of benefits attached to it. Similarly in case of Primark, the company has to bear certain operational cost for conducting business in an ethical manner. Primark carries extra cost of carrying out all the audits. It also has to bear cost of working with ethical partners. The company yields the benefit of such costs through conducting transparent business globally. Let us now consider the business ethics model of Svennson & Woods’, and discuss the benefits that Anglo American and Primark gets by sharing a healthy relationship with its external shareholders. The stakeholders and their views are very important for any company and they affect the failure and success of the company. Though the external stakeholders are not concerned with the day to day operation of the company, yet they impact on the reputation. In Anglo American stakeholder engagement is important. This helps in understanding the priorities of the external groups and assist in better decision making. To function at local levels the company has also developed a Socio-Economic Assessment Toolbox (SEAT) process. This helps the managers to calculate the impact of the company’s operations and functions on the stakeholders and the community at large (Svensson, & Wood, 2007, p. 12). Conclusion The study was based on the ethical practices of organizations such as Anglo American and Primark. Unethical practices prevail in most of the organizations nowadays. It is very difficult to sort out those organizations which not only boast but also follow ethical practices. The two companies selected here are not only famous among their stakeholders for their stability or profitability, but also for following clean and transparent managerial practices. References Anglo American Business Integrity Compliance Department. (2011). Business Integrity Policy. Retrieved from: http://www.angloamerican-chile.cl/~/media/Files/A/Anglo-American-Chile/Attachments/pdf/business_integrity.pdf. Anglo American. (no date). Transparency and Ethics. Retrieved from: http://www.angloamerican.com/development/approach-and-policies/transparency-and-ethics/ethics. Boone, L. E., & Kutz, D. (2009). Contemporary Business. (13th ed.). New Jersey: John Wiley & Sons. Ferrell, O. C., & Fraderich, J. (2012). Business Ethics: Ethical Decision Making & Cases. (9th ed.). Connecticut: Cengage Learning. Svensson, G., & Wood, G. (2007). A Model of Business Ethics. Journal of Business Ethics, 77, 303–322. Svensson, G., & Wood, G. (2011). A Conceptual Framework of Corporate and Business Ethics across Organizations Structures, Processes and Performance. The Learning Organization, 18. The Times Newspaper. (2010). Primark. Retrieved from: http://www.thetimes100.co.uk/new-downloads-pop.php?getFile=cHJpbWFyay9wcmltYXJrXzE1X2Z1bGwucGRm. The Times Newspaper. (2011). Anglo American. Retrieved from: http://www.thetimes100.co.uk/new-downloads-pop.php?getFile=YW5nbG9fYW1lcmljYW4vYW5nbG9fYW1lcmljYW5fMTNfZnVsbC5wZGY=. Read More