Chile Mining Industry - Case Study Example

Report on Chile Mining Industry Table of Contents Table of Contents 2 Introduction 3 Ethical issues 3 Evaluation of theories 4 Utilitarianism theory 4 Care ethics 5 Responsibilities of the company and other stakeholders 5 Responsibilities of the company 6 Responsibilities of stakeholders 6 Recommendation of solutions 6 Restructuring of ethical code of conduct 6 Socio-economic Assessment Toolbox (SEAT) 7 Meetings with labour union 7 Critical evaluation of solutions 8 Conclusion 8 Reference List 9 Introduction The report is based on the analysis of different ethical issues within the mining industry of Chile. As the third largest producer of copper, the mining industry of Chile can be considered as one of the major contributors in the overall GDP of the country. Presently, various leading organisations of this industry have witnessed a number of strikes from different levels of contract workers. In 2014, over 4000 of contract workers of Los Bronces, a part of Anglo American Plc, has initiated protest against various unethical practices of the management. These strikes are adversely affecting the production and export of the mining industry (Craze and Woods, 2013). The report will identify ethical issues faced by the Anglo American Plc. This study will also evaluate their responsibilities towards the ethical issues faced by the overall industry. Finally, it will provide several valuable recommendations to neutralize the situation. Ethical issues Business ethics explains all the activities of different organisations and industries as per their right or wrong approaches towards their stakeholders (De George, 2011). The prolonged strikes within the contractual workers of Los Bronces mine have highlighted various ethical issues faced by the copper mining industry of Chile. The main ethical issue within the organisation is the tendency of management to neglect the worker’s rights towards the job security and minimum wages (DesJardins and McCall, 2014). Management of the organisation and the contractual employees are the major stakeholders involved in this ethical issue. The increased level of work outsourcing has influenced the employers of the organisation to initiate short-term contracts which offer very low salaries to the workforce. This practice is creating excessive work pressure within the workforce due to the increased threat of job insecurity. This ethical issue is also affecting the government and regulatory bodies of the country as the organisation is neglecting the minimum wage policy (Reuters, 2014). Workplace harassment and insecurity can also be considered as the breach of worker’s right. The human resources management of the mining organisation and the contractual workers are the major stakeholders involved in this ethical issue. The Health and Safety Act provide the rights to the employees to seek for a safe and healthy workplace (Doh et al., 2013). On the contrary, the management of mining organisation forces the employees to work in a highly risky work atmosphere. This situation imposes a great threat towards the physical safety, security and the social life of the workforce (Reuters, 2014). The anti-union practices have increased the fear of retribution within the employees who support unionization (Doh et al., 2013). The management, labour-union and contractual employees are involved in this ethical issue. The anti-union practice can be considered as one of the major ethical issues faced by the Anglo American Plc. This issue is hindering the right to collective bargaining as well as the freedom of union association of the employees (Deckop, 2006). Negligence towards the right of collective bargaining of employees has directed the management to refuse the negotiation regarding demands of the workforce that is eventually affecting the work motivation of the employees (Chatterjee, 2014). Apart from the breach of worker’s right, the workplace violence by the contractual workers is another ethical issue faced by the organisation (De George, 2011). The improper management of the workforce and dissatisfaction within the employees has enhanced the violent behaviour of the workforce while the unethical support of the labour union has also influenced their outrageous behaviour. This situation has resulted in the damage of organisational resources as well as productivity. The destruction of organisational resources and assets is also affecting the shareholders and the investors of the organisation. Evaluation of theories The utilitarianism and the care ethics are the two important theories that evaluate the necessity of proper handling of the previously mentioned ethical issues (Broad, 2014). Utilitarianism theory The utilitarianism theory of ethics illustrates that the moral action is the key feature of any organisation to maximize the utility of all the organisational stakeholders. This theory evaluates that the choice of action of any business allow them to increase the utility of all levels of stakeholders. The workplace satisfaction in terms of economical gain, physical safety and social well-being can be considered as the utility for the employees of any organisation, while the increased productivity of workforce and revenue generation can be determined as the utility for the management, shareholder and investors of the organisation. Therefore, it can be said that the utilitarian activities generate an urge within the management to indulge in moral activities that allow them to bring gains to different stakeholder of the organisation (De George, 2011). According to the analysis of the case study, it can be said that the management of Anglo American Plc. has demonstrated various immoral activities such as violation of worker’s right and workplace harassment. The choice of action of the management failed to bring utility for the different levels of the organisation. Their unethical movement has caused financial loss for the shareholders while it has generated demotivation within the workforce. On the other hand, the unethical behaviour of workforce has adversely affected the revenue generation and resource capacity of the organisation. Therefore, the analysis of utilitarian theory in the context of the organisational work culture of Anglo American Plc has influenced the requirement of proper ethical actions in terms of the management and the workforce (Chatterjee, 2014). Care ethics The theory of care ethics explains that the choice of action of any management needs to nurture and support the requirements of other relatively vulnerable stakeholders. This kind of choice of action can be termed as morally ‘right’ while the negligence towards the requirements of the vulnerable stakeholder can be consider as a ‘wrong’ activity. The theory also evaluates that the choice of actions within any organisation promotes the relationship within the different levels of the workforce (Broad, 2014). The activities of Anglo American Plc. can be considered as morally wrong as these are not supporting the economically and socially vulnerable employees, which are eventually harming the relation between employer and the employees. Therefore, the management need to consider several ethical course of action to improve the employment relationship. Responsibilities of the company and other stakeholders The ethical criteria suggested by Kline (2010) have illustrated the importance of international business ethics in a globalized economy which impacts the socio-economic and political scenario of the organisations of any country. According to the author, the ethical decision making procedure of the management of organisations improves the overall organisational work culture as well as the productivity of the workforce. The author has also evaluated that the standard of corporate responsibilities influences the global presence of any organisation. According to the author, ‘Sweatshop’ or the socially unacceptable workplace culture not only hinders the work-life balance of the workforce, it also harms the local as well as global reputation of the organisation (Kline, 2010). Responsibilities of the company The organisational work culture of the Anglo American Plc. has also demonstrated various unacceptable practices in terms of work difficulties, work place safety and minimum wages payment to the workforce. These practices have not only diminished the productivity and employment relationship but it has also adversely affected the global reputation of the business. This situation has affected the international investor’s relationship of the organisation. The unethical decision making procedure within the management of the organisation has also affected their revenue generation capacity. Therefore, as per the criteria of Kline (2010), the organisation needs to follow the business ethics in a globalized economy to improve their socio-economical and political condition (Kline, 2010). The ethical responsibility of the organisation will allow them to improve their global reputation and investor’s relationship. Responsibilities of stakeholders Apart from the management of the organisation, the other stakeholders such as the employees, investors and governmental authorities are also responsible for different ethical activities of the organisation. The employees are responsible for proper utilization of the organisational assets and resources. This will enhance the profit generation capacity of the organisation (Kline, 2010). Therefore, it will assist the management to provide better work atmosphere to the employees. The government authorities and investors need to focus on the investment related to various organisational and employment development projects. These activities will assist the organisation to indulge in different corporate social responsibilities to improve the social life of the employees. Recommendation of solutions The Anglo American Plc. needs to follow different ethical solutions to improve the employment relationship and overall organisational performance. The important step to improve the organisational work culture is to introduce a proper code of conduct within the organisation. Restructuring of ethical code of conduct The management of the Anglo American Plc. needs to restructure the standard for their ethical code of conduct that will include the core values of the organisation and their employee-employer relationship. This restructuring process of ethical codes of conduct will allow the organisation to guide the behaviour of all the internal stakeholders of the organisation. The government participation to streamline all the ethical regulation of the mining industry in Chile will also play an important role in terms of designing strict ethical codes of conduct for the organisation. The management of Anglo American Plc. need to abide by different ethical rules and regulation created by the government within the industrial sector. Various governmental regulations will allow the management of the organisation to create a proper code of conduct that will consider the worker’s right for workplace safety and organisational transparency (Craze and Woods, 2013). Apart from the creation of code of conduct, the management also need to monitor the proper implementation of the regulations within the workforce of the organisation. This procedure assists the organisation to improve different business ethics management tools by enhancing the workplace values and considering the worker’s rights (Crane and Matten, 2010). Socio-economic Assessment Toolbox (SEAT) The management of the organisation needs to properly utilize the Socio-economic Assessment Toolbox (SEAT). This is an internally created process of the organisation that assists them to manage the ethical behaviour of its internal stakeholders. The SEAT process will allow the organisation to quantitatively and qualitatively measure the managerial actions and their effects on their stakeholders. This process helps the organisation to analyse the effectiveness of the different activities of the management on various communities of the market. This process also improves the corporate citizenship activities of the organisation. Therefore, this activity of the organisation will improve the moral values of the organisation (Craze and Woods, 2013). Meetings with labour union The senior management of the organisation must indulge in different negotiation and bargaining activities with the labour union regarding the demands and requirements of the workforce. The management needs to select a section of senior management to directly deal with the grievances of the employees through time to time meetings with the representatives of labour union. This process will allow them to effectively eliminate different conflicts within the workforce and the management. On the other hand, the representative of the labour union also needs to strictly manage the activities of the workforce to eliminate any outrageous and unethical activities. The senior board members need to make sure that any unethical behaviour within the workforce will cause strict action against the employees. Therefore, these procedures will enable both the parties to improve the employee relationship within the organisation (Crane and Matten, 2010). Critical evaluation of solutions All the recommended solutions toward the ethical issues of Anglo American Plc. will enable the management of the organisation to improve their morally ‘right’ behaviour towards the employees and other stakeholders. The restructuring process of the ethical code will influence the overall organisational structure and their work culture. These codes of conduct will evaluate the different roles and responsibilities of the management such as the restructuring process of employee wages, training requirement and proper distribution of day to day work. Government’s participation in this process will also ensure the protection of organisational transparency and worker rights towards the workplace safety and security. Therefore, proper implementation of the recommendation will improve the social as well as economical condition of the employees which subsequently enhance the market reputation and revenue generation capacity of the organisation. The utilization of SEAT tools will assist the management to measure the effect of their operations on the stakeholders of the organisation. This process will be beneficial for the management to evaluate the outcome of different organisational activities. Therefore, it will allow them to design their future ethical activities. The strong relationship of the management with the labour union will ensure the proper fulfilment of the demands of the employees. This situation will improve the relation of employee-employer. Therefore, this situation will enhance the performance of the employees as well as the productivity of the overall mining industry. Conclusion The report has evaluated different ethical issues within the work culture and organisational behaviour of Anglo American Plc. Most of the issues are influenced by the breach of worker’s right and the improper communication within the stakeholders association. It has also illustrated the effect of these unethical activities on the global socio-economic reputation of the organisation. Therefore, proper solutions have been recommended to the different stakeholders of the organisation to improve the employment relationship as well as global citizenship. Word Count: 2200 Reference List Broad, C. D., 2014. Five types of ethical theory. London: Routledge. Chatterjee, P., 2014. Anglo American Workers Strike Against Contract Labor Conditions in Chile. [online] Available at [Accessed 30 March 2015]. Crane, A. and Matten, D., 2010. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford: Oxford University Press. Craze, M. and Woods, R., 2013. Copper Union Plans Strikes as Chile Shipments Restricted. [online] Available at [Accessed 30 March 2015]. De George, R. T., 2011. Business ethics. New Delhi: Pearson Education India. Deckop, J. R. (Ed.)., 2006. Human resource management ethics. IAP. DesJardins, J. R. and McCall, J. J., 2014. Contemporary issues in business ethics. Connecticut: Cengage Learning. Doh, J., Husted, B., de Monterrey, T. and Yang, X., 2013. Ethics, Corporate Social Responsibility, and Developing Country Multinationals. Business Ethics Quarterly, 23(4), pp. 638-639. Kline, J., 2010. Ethics for International Business: Decision-making in a global political economy. London: Routledge. Reuters, 2014. Anglo halting Chile Los Bronces mine operations due to protest. [online] Available at [Accessed 30 March 2015]. Read More