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Summary Unit 37 - Understanding Business Ethics (21021c)
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L3 Btec National Extended Diploma in BusinessUnit 37: Business Ethics
Subject Teacher: Anthony Johnson
Klein Luyindula
Describe the social implications of business ethics facing a selected business in its different
areas of activity – P3
Social Implications
-Social implications refer to those actions of business that have an effect on society as a
whole. These issues relate to a number of areas of activity.
Ethics in Finance
Bribery
-There are many rules and regulations that are to be required of Starbucks before a
financial dealing and payments are made. Examples of bribery I can refer to would be
the financial dealings which I would classify as a form of corruption because being able
to manipulate the business using one subject and using money to gain an unfair
advantage over others.
Executive pay
-Executive pay refers to excessive purchases from top executives. However, in the
United States large organisations such as Starbucks are now required to deliver an
annual report for a single figure for the total pay of their executives ranging from
salaries, bonuses and pensions. This triggers a response to a public concern about pay
rises and high-profile cases of failed executives getting payoffs of up to $50 -
$100million, and others having stock options backdated to give them a share of earlier
capital gains. This will provide information to shareholders on the amount their top
executives are earning.
Insider trading
-When describing insider trading, I can compare insider trading with bribery as Insider
Trading refers to the illegal use of quality information in dealing on a stock exchange. An
example of This is would refer to a Starbucks associate trading confidential, quality
information from Starbucks organization with another associate, in exchange for large
profits.
Lobbying
-Lobbying refers to the intention is to encourage politicians to adopt a particular cause
or issue, in order to benefit it. Lobbying politicians can be a form of corruption. an
example of lobbying would be Starbucks avoiding the UK tax on a huge scale its reported
that within the last 14 years that Starbucks has only paid £8.6m in taxes which raised
concerns for the managing directors and CEOs from a London investigation bureau
which exposed the company from avoiding huge amounts of taxes to takes in more
profits. due to this act of bribery, which an example of how Starbucks has been unethical
in terms of financial situations. Improving this would require taking action on employees
who use illegal methods such as bribery.
, L3 Btec National Extended Diploma in Business
Unit 37: Business Ethics
Subject Teacher: Anthony Johnson
Klein Luyindula
Ethics in Human Resource Management
Discrimination & Worker surveillance
-The Discrimination act within a workplace is based on certain prejudices and occurs
once an employee is being mistreated because of their gender, sexuality, race, religion
and etc. Worker’s surveillance is an appropriate action to a certain extent. It is important
to ensure that all staff and employees treat one another with equal respect and quality
behaviour, however, there is only an extent to how far it can go until it is inappropriate
for an employee to have their behaviour measured.
Starbucks was forced to close more than 8,000 stores because of a racial bias training as
it was announced that two black men were arrested in a Starbucks branch due to being
racial accused of trespassing despite the two men explaining that they were in the store
for a business meeting. As a result of time required Starbucks to react promptly and the
company was forced too immediately shut down the stores and employees where
quickly forced to completed customer advanced training.
A Starbucks representative claimed ‘at Starbucks’ we respect and value everyone. We
have a have strict policy prohibiting racism and discrimination of any kind in our
restaurants. We strongly deny the allegations in the suit and will defend vigorously.”
For the company to improve their ethical behaviour in terms of Human Resource
management, a solution would be to expand their employee’s workplace training so
they should examine the rules and guidelines, in order to ensure that each customer
who enters a Starbucks store isn’t racially discriminated.
Ethics in production
Animal testing
-Animal testing refers to procedures performed on living animals strictly for the purpose
of research into basic biology and diseases assessing the effectiveness of new medicinal
products and testing the human health and/or environmental safety of consumer and
industry products such as cosmetics.
Genetically modified (GM)
-genetically modified refers to the genetic material has been altered in a way that does
not occur naturally by mating and/or combination. Food retailers and caterers have to
be able to tell their customers which foods and ingredients, if any, contain genetically
modified organisms.
Planned obsolescence
-Planned Obsolescence refers to a manufacturing decision by a company to make a
consumer/customer product in such development that it loses its purpose or quality
within a small period of time. This will naturally stimulate a constant demand for the
product, as customers will need to buy and re-buy it in a consistent manner. This is
extremely unethical for the production department, as it means they will be earning
constant, extremely large incomes because of this product; however, the consumers will
be losing money on a regular basis, by having to buy the product time and time again.
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