Table of Contents
1.1 Background and development of theoretical ethical approaches 1
1.2 Absolute and relative ethics 2
1.3 Aspect of ethical issues: 4
2.1-2.2 Corporate social responsibility 5
4.1 Research a current ethical issue affecting a selected business 6
4.2 How the business could improve the ethics of their operations 7
Conclusion 8
References 8
1.1 Background and development of theoretical ethical approaches
Background
In 1919, Tesco was started from a
market stall in London’s East End by Jack Cohen. Tesco has now become one of
the biggest and the most famous retailers in the world. Tesco main business
field is retailing in United Kingdom which occupy 60% of all revenue and sales
on over the world. The company provide the widest range of food in any retailer
in UK. It has two largest brands which are Finest and Everyday Value, each
brand has £1 billion of revenue per year.
Operation of Tesco over 12
countries including UK, Ireland, Hungary, Poland, Czech Republic, Malaysia,
China, and India demonstrate the leading position of global brand. Tesco’s
population at the moment is more than 530,000 employees. This success is due to
establishing high expectation and clear goals of Tesco leader and never deciding
for anything below the best.
Customers, communities and
employees are biggest concerns of Tesco. In any shopping channel such as store,
online or other service, customers are ensured to experience greatest shopping
feeling.
Vision
Tesco’s vision is to be a
strategic partner of customer in reducing Non-Productive Time (NPT).
Mission
To be a recognized leading
service company by customers:
·
Transfer from leading aftermarket sale and
service to whole rig maintenance company.
·
Transfer from call out casing drive system
service to completely distribution, wide tubular structured service company.
·
Transfer from a leading product sales company to
full automation geared products company.
Core value:
Tesco’s core values incorporate a
responsibility to be able to use its scale permanently by being accountable
retailer. In 2010, the world first zero carbon super market was opened in
Ramsey, Cambridge shire by Tesco and it was considered as Green retailer of the
year in 2012. Tesco’s objective is to become no carbon emitted company by 2050.
Tesco’s continuing success is
determined by its reevaluating as well as making clear business approaches. Tesco
is going to increase customer loyalty and its main UK enterprise so that they
can enable it to create the buying experience for its customers. It determined
£1 billion for an investment decision to do this. Approaches for enhancing
competition have been then developed. The actual factors driving these kinds of
approaches are price, quality, range, revolution and providing excellent many
support services such as Tesco’s ‘Click & Collect’ program.
Company organizational structure:
Organizational culture
Organizational culture is a
system in which employees within organization will share the same values,
assumptions and beliefs and these factors will direct employees’ behavior in
organization such as dressing, acting and performing job. Different
organization has different culture which set the rule and boundaries for the
behavior of organization members.
There are 7 elements of culture:
·
Tempo of work: is amount of work that is
assigned to employees over specific period. A well-structured amount of work is
essential for appropriate time management and this will enhance company working
efficiency.
·
The organization’s approach to humor: the concept
of humor in organization relate to formality and informality in workplace.
·
Methods of problem-solving is process of working
in which employee go through problem details to find solution. Problem solving
method can be mathematical or scientific approaches and can be used as a
measure of one person’s critical thinking.
·
The competitive environment: is competition in
workplace which can lead to continual improvement or stress and defensiveness
among employees.
·
Incentives: is a bonus or reward that inspires employees
to take some action or work harder.
·
Individual autonomy: is capacity of people that
can self-determine and self-governance themselves. If employees are free to
select their jobs in a manner that matches their own characteristics and
ability sets, organization can grow provided that all of basics are included.
·
Hierarchical structure: is a structure that including
many levels in which employees are managed by higher level and in turn be
managed by the upper level such as president or CEO.
1.2 Absolute and relative ethics
Relative theory
According to the theory of moral relativism,
ethical behavior is defined by the subjective experience of an individual or a
group of people. Advocates of moral relativism often take themselves or people
around them as a basis for determining standards and ethical behavior. They
often observe the behavior of a
certain group of people and try
to determine what makes that group reach a consensus in a given situation. A
consensus of the sample group is considered a sign of the right or ethical.
However, these ethical standards are not considered everlasting. In other
circumstances or when the sample changes, the previous behavior can become
wrong or immoral.
Therefore ethical judgment makings
are right or wrong just in accordance with several specific perspectives with
no perspective is distinctively advantaged over others. It has typically been
related to other statements standards such as the thesis that different
cultures usually demonstrate drastically different ethical values, the refusal that
there exists common ethical values shared through each human culture; and the
insistence that people need to avoid making ethical judgment on beliefs and
characteristics of cultures apart from their own cultures.
Absolutism
Moral absolutism is the ethical
perspective that particular behavior will be considered completely right or
wrong, no matter what different circumstances like their results or the
purposes in it. Therefore stealing, as an example, can be regarded as being
wrong at all times , regardless of whether done for a good thing such as
stealing meals to give food for a starving family, and also if that truly does
to promote a really good. Moral absolutism appears as opposed to other types of
moral concepts including relativism which states that the ethics of behavior
depends on the results as well as situation of the behavior
Teleology:
Teleological ethic is known as a
normative ethical concept that put the situation of right and wrong primarily
on the results or consequent of one behavior over other behaviors. An action
can be considered good and acceptable through behavioral consequences that is
brought for any specific objectives. If action brought many good things or
benefits, it is considered to be good; vice versa if the consequences is bad or
damages, actions are not considered immoral. Therefore, it goes further than
the extent of one personal interests and considers the interests of other
people.
Deontology
Deontological ethics is ethical
concepts that put particular focus on the rapport between obligation and the ethics
of human behavior. Therefore deontology target on logic and ethics with no effort
to explain detailed ethical obligations. Deontological advocates believe that
an action is recognized as ethically good due to a number of characteristic of
the actions themselves, not depending on
consequence of the action is good or not. To have right ethical decisions,
people need to determine what their ethical obligations are and what policies are
available to manage those obligations. If they adhere to their obligation, they
are behaving ethically
The differences and similarities between absolute and relative ethic:
Similarity is that both are
philosophical concepts and they both shaped by social cognition
Absolute
|
Relative
|
The absolutist believe there exists a common
ethical standard
|
The relativist disagrees that there is a common
ethical standard.
|
The standards are not change
|
Standards changes throughout time and cultures,
and among individuals
|
It allows ethical principles to be examined
significantly.
|
It provides the variety which is included in the
world.
|
It truly is reasonable when everyone is treated
the same for anyone.
|
Life is not that simple
|
If an ethical principle is correct, then there is
no requirement to have different principles for different people since the
absolute principles are common.
|
Many people may believe that their ethical
standards are more acceptable than others. For relative ethic, this is
recognized between different people
|
1.3 Aspect of ethical issues:
Stakeholder analysis
and different in interests
A stakeholders could be an
individual, groups and organization that have an interest in a business and
they are effected by the activity of business. Typically, a business have varieties
of internal as well as external stakeholders, with different interests and
these interests could easily conflict each other. It is necessary for any
organization to make interests of different stakeholders balance.
The stakeholder of a business
could include:
Internal stakeholder:
·
Owners are keen on the amount of earnings the
business can creates.
·
Managers who are interested in their wage.
·
Employees who wish to receive higher salary and
keep their positions.
External stakeholder:
·
Customers who desire the company to provide high
quality products at affordable prices.
·
Suppliers who desire the company to keep buying
their products and make payment on time.
·
Creditors who would like to be paid back on time
and in complete.
·
The community concern about the effect of
business operations on environment
·
Investors expect the company can make profit as
well as get a return on their investment or be interested in evidence how
company handle environmental problems before investing.
·
Government will pay attention to company
operations to determine whether it is ethical, legal or not.
Conflict in
interests:
Interest conflict occurs once the
desires of several stakeholder groups affect badly to the expectations of
others. Manager needs to make decisions in which some stakeholders may not
disagree, for example:
·
Owners normally look for higher profits
therefore could be unwilling to see the company pay high salary to employees.
·
Manager decide to move production overseas to
reduce staff costs. It will therefore benefit owners but work against the
interests of existing staff who will lose their jobs. Customers also suffer if
they receive a poorer service.
·
Manager decide to transfer manufacturer abroad
to reduce expenses. It will consequently profit owners nevertheless resistant
to the interests of current employees who will be cut job and customers also
suffer if they receive a poorer support.
·
Employers looking for higher income may possibly
conflict with the wish of management to reduce expenditures to increase income
and therefore fulfill their own personal desires and satisfy the requirements
of the shareholders.
·
Suppliers: want high price and instant payment
whereas company management’s desire is to reduce material price and time of
selling on credit is increased.
·
Government: require business to meet their tax
obligations however business always want to find out the way to reduce tax.
·
Social: need business to have activities that is
beneficial and constructive for community and contribute to protect environment
as well which cost a lots of money and time.
·
Customer want higher quality, good service and
reasonable price whereas manager need to reduce cost and increase profit.
2.1-2.2 Corporate social responsibility
The thought of corporate social
responsibility has a number of accomplishments and attempts that handles the
moral and ethical things including the code of conduct as well as good
governance. The objective for corporate social responsibility is that company
have a general impact on community by using a socially reliable conduct.
Additionally, it involves the charitable integration through the social
companies and environmental issues to the business activities and the
connection with stakeholders
The three involved objects which
are corporate, social and government have different concerns about their rights
and duties. Additionally, there exist a close relationship among three objects.
Social
The community expect to have
sociable agreement with business so as they are able to deal with concerns such
as philanthropic giving, public-private partners, as well as social and
economic development of the nearby locality. Also, it is pointed out the value
of ecologically sensitive operations as well as productions by companies. Focus
on concerns, for example, sensible garbage disposal and emission qualifications,
preservation of environment friendly assets, environment coaching, and so on
provides good sign about their CSR to environment. Moreover, the moral
obligations point out social expectations which far exceed the regulations,
like the expectation in which businesses will certainly carry out their own
issues within a fair way. This means businesses are required to perform more
than just adhere to the regulations, but probably create positive attempts to
anticipate as well as fulfill the rules of community regardless if these rules
are not legally put into law. Finally, in return it is require society to have
appropriate perspective about operation of business to create ideal market for
development of a business.
Corporate
Corporates expect to have good
circumstance to develop businesses as well as their market. The local where
corporates operate must be safe and facilitate for company so as they can
operate efficiently, profitably and keep shareholder interests. In return, company must ensure its operation
is legal, ethical and friendly for government and society.
Government
Government is considered as
intermediary between corporate and social therefore it have responsibilities to
balance the benefits of corporate and society in order to avoid conflict and
ensure both sides benefits. These things are guaranteed by law and regular to
make sure that right and duty of corporate and social are fully implemented. In
case, these laws are violated, government has right to force these party to
fulfill their obligation.
Due to the fact that there exist
different in interests among corporate, society and government, interest
conflict may occur when expectation of one party can be affected negatively by
others expectation. For example, the conflict between business and society
could be about profit. Society always the finished product must be high quality
with cheap price whereas business expect to gain high profit as well as cutting
cost which could partial affect the quality of product. Therefore, it arise the
conflict between business and society.
In addition, conflict can also be
arise between business and government due to the tax. Paying tax is a duty of business to
contribute development of country and it is required every business to pay. However
this directly affect income one business. Thus, business usually find ways to
reduce the amount of paying tax
4.1 Research a current ethical issue affecting a selected business
Tesco expectation:
- · Take competitive advantage on selling non-food product such as books, DVDs
- · Providing customers the most competitive prices at the best value of money.
- · Meeting the needs of innovation, product quality, choice, store facilities and service for customers.
- · Work together with suppliers to create long term relationships with strict quality and price criteria
- · Take part in food industry policies
- · Offering welfare for society and environment conservation
Social expectation:
- · Provide job for the young people
- · Do not use slave labor
Government expectation
- · Government want Tesco to pay additional for increasing food price
- · Make sure the quality of product
- · Fulfill all government law
Conflict in interest:
Using above CSR model, a conflict of Tesco plc
is pointed out which had bad effect on reputation of company. The differences
in interest leaded Tesco to the conflict between corporate and society. For
example, in order to maximize their profits, Tesco did not check the quality of
their own beef burgers in which their suppliers used horsemeat instead of beef
to reduce their costs. This led customer to disappointment feeling and not
continue to buy from Tesco. This also make customer worried about the
quality of the food they eat.
Company reputation is negatively impacted. Company has to check all beef
product and remove it all. Not only company revenue affected but the
reliability is seriously damaged.
4.2 How the business could improve the ethics of their operations
To build a good reputation, it
will take time and cost for business to reach the destination. There are six
dimensions of corporate reputation which the business could apply to change the
business. They are: Emotional appeal, Products and Services, Financial
performance, Social responsibility, Workplace environment, Vision and
leadership
Emotional appeal is approach that is used to develop business image
procedure which determined by 5 senses of human being: view, listening to,
smell, flavor as well as touch to create an emotional reaction of customers
once they observe the picture of company.
Product and Services have got great influence on customers’
assumption regarding business name. In line with the quality of products and
services, company reputation will be defined depend on how good the product is.
Financial Performance can show the business's operation. Different
operational outcome will lead to different effect on business reputation. A
positive financial report will show the potential of company therefore affect
reputation of it.
Social Responsibility is an approach to increase business
reputation for example charity activities will contribute to build positive
image for business.
Workplace environment may partially point out the way business
works as well as treats their staff. If business have a great workspace we are
able to imply that they dedicated care about mental and physical aspects of
employees. This will get people to believe that business is working ethically.
Vision and Leadership have a strong influence to business position
for the reason that their decision can lead to success or failure of business.
Therefore, a leader who have ability to run business can somehow increase
business reputation.
Tesco ethical issue:
With position of leading retailer
in the world, the issue impact negatively on sales, operation as well as
reputation of company. For Tesco case, company should concentrate on three
following dimensions of reputation: product and service, social responsibility,
vision and leadership.
Product and service: Tesco should
be honest about the quality of product and have positive attitude to fix their
fault. Moreover, company must make sure that the meat will have better quality
from reliable suppliers. Even though, it will be more expensive but company
reputation will be kept to standard and reliable to customer.
Social responsibility: Tesco must
have responsibility on customer health. Using horse meat can be considered as
unethical therefore company must have appropriate remedy for customer.
Vision and leadership: reducing
operational cost is necessary however skip checking the quality product is
unreasonable which lead to ethical issue. Therefore, Tesco leader must have
decision on checking product quality policy to ensure the company reputation
Conclusion
In conclusion, different ethical
perspective of Tesco plc are discussed and then business objective from ethical
perspectives is analyzed so that we can able to access ethical issues of
business. Consequently, we can know how business could improve ethic of their
operation.
References
Ethical Issues in Business: Inquiries, Cases, and Readings,
Peg Tittle, Broadview Press, 2000.
Garriga, E., and D. Mele (2004). "Corporate Social
Responsibility Theories: Mapping the Territory." Journal of Business
Ethics 53.
UK Essays (2000). Absolute And Relative Ethics Commerce
Essay, [online]. Available from:
http://www.ukessays.com/essays/commerce/absolute-and-relative-ethics-commerce-essay.php[Accessed
22 January 2015].
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