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Summary Unit 37 - Understanding Business Ethics (21021c)
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L3 Btec National ExtendedDiploma in Business
Unit 37: Business Ethics Subject
Teacher: Anthony Johnson
Klein Luyindula
Explain the ethical issues a business needs to consider in its operational activities –P1.
Starbucks
Starbucks Corporation is a global American multinational chain of coffeehouses and roastery
reserves which specialize in the hospitality sector providing beverages and food. It was founded
in 1971 on the 31st march by Gordan Bowker, Jerry Baldwin and Zev Siegl. The corporation
currently resides its headquarters in Seattle, Washington.
Over the years Starbucks has made a real name for themselves in the retail industry, this has
led the company to opening 31,256 stores in 70 different countries. Starbucks currently have
346,000 employees.
As I previously mentioned, Starbucks is a global multinational company which specializes in
selling beverages and food at an affordable price. Throughout previous years Starbucks have
come under fire following serious claims of environmental and ethical issues such as: climate
change, environmental problems, sustainability, destroying habitats & resources, pollutions and
toxins, carcinogens, human rights/workers' rights and supply chain management.
Business Ethics
Business ethics is referring to the set of moral rules which govern how businesses operate, how
decisions are made and how individuals are treated. In businesses there are many different
people which you must answer to, for example: customers, shareholders and clients. When an
ethical dilemma arises, it can be extremely complicated as business ethics are complex some
business ethics can be imposed by certain laws. An example of Starbucks business ethics would
be their financial ethics, their accountants which depend upon complete honesty and
transparency are mostly affected. A lack of business ethics allowed the accountants at
Starbucks Finance department to behave in a dishonest unprofessional manner when auditing
, L3 Btec National Extended
Diploma in Business
Unit 37: Business Ethics Subject
Teacher: Anthony Johnson
Klein Luyindula
the finances. As a result of this, shareholders were harmed, and the company slowly began to
collapse. Some Starbucks accountants were held legally liable for their breach of business
ethics.
Operational activities
Operating activities can be defined as the functions of a business which directly relate to
providing its goods and services to the market. These can be referred to as the company's core
business activities, such as manufacturing, distributing, marketing and selling the product or
service. An example of personal operating activities for Starbucks would be their cash receipts
from their sales and ensuring to pay employees their monthly wages and other expenses.
Ethical activities
Ethical activities, referring to the study of appropriate business policies and practices regarding
controversial matters including corporate governance, insider trading, bribery, discrimination,
corporate social responsibly and fiduciary responsibilities. For example, using Fairtrade.
Values of businesses
Company values of businesses refer to the core values or standards that guide the way you
do business. They sum up what your business stands for, how it influences the organizational
culture, and how and why you do things. While business plans and strategies may change, the
core values of your business will generally stay the same. An example of four core values in
which Starbucks incorporates to their company are: integrity & ethics, respect & responsibility,
innovation and drive.
Professional ethics
Professional ethics cite the principles that govern the behavior of individuals or groups within a
business environment. For example, similar to values, professional ethics provide rules and
guidance on how an employee is required to behave toward other people. Likewise, how
institution's act in such an environment. An example of some professional ethics in relation to
Starbucks may dine their ethical approach in the terms of a series of discrete components.
Honesty, trustworthiness, transparency, accountability, confidentially, objectivity, respect,
obedience to the law and loyalty are key components for professional ethics.
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