In this assignment I will discuss the theoretical approaches to business ethics and apply these in an organisational context. This will be supported by the outline of the ethical policies of a chosen organisation, with relation to theoretical approaches.
1.1
Ethics (definition): the moral principles that govern a person’s behaviour or the conducting of an activity (Oxford English Dictionary).
There are a number of different theoretical approaches to the ethics of business as briefly outlined below:
- Utilitarianism – the doctrine that actions are right if they are useful for the benefit of the community.
- Egoism – the doctrine of self- interest regardless of morality.
- Consequentialism – The doctrine whereby good results justifies the original action, as opposed to –
- Non-consequentialism where results do not determine whether the actions were right or wrong.
Ethical theories differ from business to business and the implementation of a particular ethical theory may affect the behaviour of the mechanics of that company and the staff it employs.
For example, a food business may support fair trade and use ethically locally sourced ingredients and products, but another company may be ethical by giving a fair wage, or using green energy to power machinery. Behaviour within the business are also affected by the workforce as each staff member has to comply with their ethical decisions/ policies and have to act in a way in which supports the company’s ethics.
1.2
Ethical theories within business range from many different approaches, for example Consequentialists believe that if the end result is good then the course of action taken was the right one to take, so if the consequences turn out to be bad then the decision to proceed was not the correct decision.
Egoists (egoism) consider their self-interest over morally right decisions so if the end result puts them out or isn’t in their best interest they will not choose to do so.
Utilitarianists want to bring as much happiness and good for the many thus seeking a course of action which will have the maximum benefit for the maximum amount of people.
Non-consequentialists believe that a decision should not be judged on the consequence yet judge this on the rightness or wrongness of an action. For example, it is wrong to break the law so speeding is wrong so driving at the speed limit is a must.
The values and ethics of a business/organisation determine which theory the business implements.
1.3
The ethical decisions made by a business ultimately affects the day to day operations but also may affect the customer base and the ultimate success of the business.
For example, Amazon really believes in sustainability for their business so by building another 100 wind turbines allows them to support green energy. It may also encourage their customers to think of their own energy use, i.e. not using fossil fuels to power their homes. The decision to think of the environment is a typical utilitarianism trait, which means they make their decision based on making as many people happy as possible with the outcome from that decision. By making this decision they have chosen to reduce their carbon footprint and create enough energy to power 90,000 homes.
2.1
The business I have chosen to write about is Amazon, an online commerce website supplying a huge range of products and offering a large quantity at next-day delivery options; a quick and easy shopping solution.
Amazon also offer services such as online movie accounts, eBooks and electronic devices. The Amazon business offers a service which uses of a lot of energy.
By implementing the utilitarianist ethical approach, Amazon aims to be a sustainable business by creating energy through wind turbines, solar panels and reducing packaging waste ( in the past 10 years they have already managed to reduce packaging waste by 500 million boxes). Lowering their carbon footprint contributes towards long term sustainability.
Customers benefit from a great service but also knowing the companies good environmental ethical decisions allows customers to not feel guilty about their carbon footprint as much as they would if these programmes weren’t in action. These actions are utilitarianism as they benefit many people and the outcome is positive due to the environment not being affected due to their ethical sustainable programmes.
2.2
Amazon have been questioned on their ethics frequently especially concerning their staff. The Courier News website states Amazon employees have been sleeping in tents near the warehouse due to low wages and long working hours, with one worker claiming ‘it was easier and cheaper than commuting from his home in Perth’.
A utilitarianism approach to better staff pay and welfare would probably increase productivity as well as increase consumer confidence which in turn could lead to more orders.
Amazon has a huge amount of sales generating a large amount of turnover every year, with profits reaching £72.3 million (tripled from previous). However last year the company only paid a relatively small amount of tax (£1.7 million). Some see this as tax avoidance due to them deferring tax through staff-based share awards which is legal and is used by many other companies but the question is it morally right? This is an egoist decision basing their decision on what will benefit them rather than what is morally correct. Amazon have tried to pay the least amount of tax so they have larger profit margins; this shows they put their interests above what is right morally and ethically.
2.3
Amazon works hard to ensure suppliers reach their level of standard when it comes to business ethical and lawful manners. They have a near 3000 word code of conduct which clearly specifies what is expected of the supplier on manufacturing, workers, and other things such as slavery and trafficking. These are all very important points to ensure not only Amazon products are ethical and aren’t doing harm but that the other businesses selling from their platform are acting in a way that their customers will be happy with. They also make visits to the suppliers factories and do regular assessments to ensure they are keeping up to the same standard. They have a clause in their contract to enable Amazon to terminate its relationship with any company not complying with their code of conduct.
Amazon overall has ethical policies pushing for a sustainable and green future, providing large quantities of jobs and supporting small businesses in crowded markets. They do however have had some issues where their ethics have been questioned and policies breached but continue to do good within the industry and also providing ways to reduce their carbon footprint.