This report outlines ethical issues needed to be considered by businesses. Each issue is defined, with examples of businesses that have been ethical and unethical to each point. it will also outline some ethical issues that have affected McDonalds’ operational activities.
This report will outline ethical issues needed to be considered by businesses. I will be defining each
ethical issue, and providing examples of businesses that have been ethical and unethical to each
point. In addition to this, I will be outlining some ethical issues that have affected McDonalds’
operational activities.
Operational Activities
Business ethics
Business ethics are moral values that govern the conduct of a business. Businesses subject to the
same standards that decide the behaviour of a person. These ethics apply to all aspects of business
behaviour. Some examples are boardroom techniques, treatment of suppliers, sales techniques and
accounting practices etc.
Ethical activities
Ethical activities are those issues/ situations that require the business to decide which would be
deemed ethical or unethical (right or wrong). An example of this is if there is an issue within the
business brought up by an employee, the business then makes a decision whether to solve it or
cover it up. Covering it up would be the unethical choice.
Values of business
Business values are principles that have a significant effect on the actions and mindset of a company
and serve as broad guidelines in all circumstances and decision-making. An example of a business
value could be to minimise negative environmental impact.
Professional ethics
Professional ethics are accepted standards of personal and business conduct, beliefs and guiding
principles usually developed by professional associations to help guide participants in the execution
of their work in line with sound and consistent ethical standards. An example of this is requiring
employees to maintain confidentiality when handling clients private information or the companies
own data.
Individual ethical behaviour
Individual ethical behaviour is basic concepts and values that control relationships between
individuals. Sound personal ethics are usually ones that have a favourable effect on the experience
of others as they are used to regulate the social or business actions of an individual. These ethics
should not have a negative impact on others. An example is by keeping relationships between
managers and their employees strictly professional.
Ethical Issues
Corporate governance
Corporate governance is a system of rules, procedures and processes that regulates and regulates an
organisation. It refers to the manner in which corporations are regulated and what their function is.
, It defines who has control and duty and who makes decision. A company that is ethical in relation to
corporate governance is PepsiCo. PepsiCo believe ‘strong corporate governance is the foundation for
financial integrity, investor confidence and sustainable performance’. They have corporate
governance guidelines that affects their decision making process. They set the expectations to help
the board and committees to carry out their duties. This makes their business ethical and effective.
On the other hand, a business that is unethical in regards to this issue is Sports Direct. In 2016, a
report brought to attention the poor working conditions at Sports Direct. An MP compared their
worst warehouse to Victorian workhouses. The company was accused of paying employees below
minimum wage, punishing employees over matters such as taking time off sick or taking water
breaks. Employees with zero-hour contracts were working overtime by force as they were at risk of
not being given hours in the future. The founder. Mike Ashley, had failed to notice these practices on
his weekly visits to the warehouse. In addition to this, Sports Direct hit a data breach where 30,000
employees’ personal info was compromised yet the company failed to let them know. This is an
example poor corporate governance as they were neglecting their employees.
Corporate social responsibility
Corporate social responsibility allows an organisation to be publicly accountable to themselves,
their customers, and the public. These are voluntary actions that are above the minimum legal
requirements. It gives the business a good reputation. By exercising this ethical issue, businesses will
be mindful of the kind of effect they have on the economic, social and environmental aspects of
society. An example of a business that was ethical in regards to this issue is Levi Strauss. The clothing
brand have committed to reducing water usage in their jeans production. Also they have worked to
fight stigma and support people with HIV/AIDS and they have facilitated clothing recycling with
Goodwill. These demonstrate good corporate social responsibility as the business goes above the
legal requirements to ensure they do not contribute to water scarcity. However, an unethical brand
in this case would be Magellan Metals. They wanted the lead ban to be lifted. They had been
shipping lead out of southern WA city of Esperance in 2007, which resulted in extensive lead
contamination killing 1000’s of birds and increasing lead levels in the blood of local children. This is
an example of poor corporate social responsibility.
Environment
The environment is a big ethical issue. The issue relates to the negative impacts businesses have on
the environment including nature, wildlife, climate and people. A business that is ethical when it
comes to caring for the environment is Ford Motor Company as they have a ten-part environmental
policy. They use sustainable fabrics and make 80% of their vehicles recyclable. The company focus
on ensuring their vehicles are fuel efficient. This makes the company ethical and gives them a good
brand image. In contrast to this, a business that is unethical towards the environment is Walmart.
Although they set zero-deforestation goals, there is no mechanism in place to map and control the
sources of forest-risk goods –palm oil, pulp and paper, soya and beef. They have deemed it ‘not an
immediate business priority.’ This is an example of neglect for the environment.
Sustainability
This is the preserving of the environment, keeping it the same for future generations. This involves
preserving the clean water, air, green spaces etc. An example of an ethical business in regards to
sustainability is H&M with their Conscious line. They are leaving behind fast fashion to use materials
such as organic cotton and recycled polyester. Using sustainable production methods will reduce the
companies environmental footprint. In addition to this, the business offers a recycling service where
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