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Ethics is a concept that will forever be used in business. Ethics may be defined differently in society today, but according to the Merriam-Webster dictionary, ethics is “the discipline dealing with what is good and bad and with moral duty and obligation” (Merriam-Webster Online, 2011). The controversial issue is whether or not good morals and ethics will hurt a company’s financial results. “Grub first, then ethics” said Bertolt Brecht - a phrase that may say everything about a company. Some companies “go green” to promote sustainability, while others go about doing what’s most efficient and what minimizes expenses. Ultimately, a multitude of everyday operations and business endeavors call for maintaining core ethical standards like integrity, truthfulness and friendly association (Crane, & Matten, 2007).
Environmentally Friendly Ethics
It appears that Philips does everything possible to promote itself as ethical and sustainable, both to its employees and consumers. When it comes to consumers, Philips declares that all of its products have a better environmental performance than its predecessors. These products relate to the “Philips Green Focal Areas.” (Philips Healthcare, 2010). These include energy efficiency, packaging, hazardous substance and radiation, weight, recycling and disposal, along with lifetime durability. (Philips Healthcare, 2010). Philips says “when compared to a predecessor product, the new product proves to be better by 10% in at least one of the six green focal areas and the life cycle impact must be better.” (Philips Healthcare, 2010). In terms of good sustainability and ethical behavior, this statement makes Philips very appealing. Philips also adopted the AdvaMed and NEMA/MITA Codes of Ethics on interactions with healthcare providers (Philips Healthcare, 2010). This legally binds Philips to an official code of ethics. With EcoVision 2012 and 2015, Philips has dedicated itself to care, green products and sales, green innovation, and energy efficiency of operations and products (Philips Healthcare, 2010).
The Body Shop is known for their natural products that are made from 100% natural ingredients. According to the Body Shop website their values are extremely important. These values include: helping to protect the planet, defend human rights, activate self-esteem, and support Community Trade and to ensure everything is animal cruelty free. They state that “It’s not just part of our jobs it’s part of our DNA” (The Body Shop/ About us, 2011). According to the Body Shop its products are animal cruelty free. They claim to be the first international cosmetics brand to have been recognized under the Humane Cosmetics Standard for their Against Animal Testing policy (The Body Shop/ About us, 2011). In 2008 The Body Shop won the RSPCA good business award for the second time. This was given to the Body Shop for their dedication to being animal friendly.
The Body Shop uses an eco-conscious symbol that is put on products that fit certain criteria, the criteria, as explained by the Body Shop are to respect the aquatic environment by using ingredients that are not harmful to water organisms. Another criteria is Biodegradability, all their foaming ingredients are biodegradable. Another criterion is limit on packaging waste, which simply means using less packaging material (The Body Shop Values and Campaigns, 2011).
Environmentally Unfriendly Ethics
It has never been an easy task to remain a leader without compromising on your business activities and remain ethically intact. Once the company reaches its full potential it might be one of the hardest tasks to maintain its grand status and not to drift away from your original mission and start behaving in an unethical manner. Tesco is an international company that prides for its strong reputation for providing quality products and services. It is committed to treat their employees, customers and suppliers in the most ethical and socially responsible manner (1). However, according to Embargo on Thursday 17th June 2004 by Friends of the Earth organization, claim that tighter regulations are needed to tame the 'unfair and unethical trading practices' of supermarket giant Tesco. The environmental campaign group believes the way the UK's biggest supermarket chain operates is damaging local communities, smaller retailers, suppliers and ultimately consumers.
By staying competitive and being able to offer customers different options of goods in affordable prices, it simultaneously creates a demand and appeal to the consumers. However, one might think carefully how do these goods are flown into the countries and trucked around Europe. There has been evidence that they overload their trucks and consequently not only damage our roads that sponsored by our public tax money but also emit loads of carbon dioxide and contribute to an ever growing climate change. The company demand for ingredients like palm oil is turning natural forests into wildlife deserts. Tesco also uses tones of packaging material, which ends up in household waste and then it becomes public responsibility to recycle. Fresh produce that doesn’t satisfy Tesco’s standards usually is being dumped because that is the cheapest and the quickest way to do it. These are just some of the environmental issues that are current and important to mention (2).
For more than a hundred years, oil companies have exploited the global fossil fuel reserves without restrictions and with the exclusive target of attaining maximum revenues; according to Datamonitor (2010), The British Petroleum does not make any exceptions from this rule. Since Tony Hayward’s assumed the top management of British Petroleum back in 2007, after the oil company had already caused numerous catastrophic events, he naturally felt obliged to make a solid promise with regards to security being considered a main priority from then on. In reality, he was the individual that administered BP under one of the most disastrous industrial accident throughout history (Elkind, Whitford, & Burke, 2011).
Fortune's discoveries demonstrate how Hayward, a well known geologist did not even come slightly close in reaching his objective. In spite of numerous ventures to change, British Petroleum never invested in improving their deficiencies in terms of safety, which led to accidents such as the blast of the Texas City plant. Instead of concentrating on process safety (means of diverting the posibility of a calamity), BP concentrated on personal safety of the employees.
A Datamonitor Green Consumer survery (Datamonitor, 2010) conducted in 15 countries, subsequently to the Deepwater Horizon Gulf of Mexico spill, showed that only 17% of their clients accredit BP as a company that abides to ethical and sustainable practices, while half of the respondents were not aware of the company’s ethical and sustainability-related policies and practices. Therefore, the researchers were inclined to believe that if even after the company is held responsible for such a calamity the customers are unaware of exactly how ethically unfriendly BP’s approach is, the company masters public opinion manipulation.
In terms of ethical behavior towards the employees of the company, it appears that Philips is fully committed to applying such codes that appear while promoting themselves. They offer proper training to all new employees along with providing financial support of up to $15,000 per year for those receiving continuing education. All employees are legally committed to a compliance program in relation to its General Business Principles (Philips Healthcare, 2010). With this Philips seems to prevent Medicare fraud and abuse. A disciplinary process is in place for anyone who violates such principles. For example, three Philips employees were recently charged of corruption between 1996 and 2006. The case, which involves 90 charges, includes the employees bribing hospitals in Poland to buy Philips Medical equipment resulting in a total of €760,000 being paid in bribes (Dutch News). Although the employees were doing it for Philips financial benefit or in an individualism sense, Philips considered the case extremely unethical and took immediate action on the employees.
Body Shop established core values, which they claim are of extreme importance to them. These values are supporting Community Trade, defending Human Rights, being against Animal Testing, activating self-esteem, and the final value of protecting our planet (The Body Shop /About us, 2011).
Also, The Body Shop has its own charity called the Body Shop Foundation, which was launched in 1990. The charity supports “pioneering, frontline organizations” that usually do not succeed without continuous support. Its focuses on assisting individuals to make progress in areas that have to do with “human and civil rights, environmental and animal protection (The Body Shop/ About us, 2011). They are also part of the L'Oréal family. The Body Shop believes in fair trade. According to the Body Shop website, the company set up their own fair trade program over twenty years ago (The Body Shop / About us, 2011).
How many companies do you know that have an online website dedicated to a company for its wrongdoings? “Boycott Tesco” website is solemnly dedicated not only to their unethical behavior, but to a complete violation of human rights. Tesco has a massive advantage over its competitors because of its monopoly position. However, only few months back in august this year Tesco was penalized with the largest fine of £10 million from the The Office of Fair Trading for alleged colluding over the price of milk and cheese back in 2002 and 2003 (3). Tesco’s race to deliver ‘unbeatable value’ for shoppers highlights the extremes that it is willing to go to in order to remain a leader (1). Many suppliers refuse to speak against Tesco, because they know that if they turn their back to them, they go to someone else (2). Tesco has a power not only to get the best suppliers but also force them to compete between each other and pushes down their prices dramatically, which destroys small businesses and local communities.
In 1998, British Petroleum merged with the American company Amco, and decided to appropriately assume the name of BP (signifying the initials for beyond petroleum), thus dismissing any refferences to its formal brand. Moreover, the company adopted a new green helios logo, cellebrating the commencement of strategy that concentrates on green sources of energy. In reality, the company’s corporate marketing strategy could not be more doubtfull and unethical. There is a huge diparity between BP’s corporate positioning strategy and its concrete identity, taking into account that BP ultimately deals with exploiting, refining and distribuiting oil, and , according to Greenpeace, only 1% of BP’s endeavours are dedicated to green energy sources (Balmer, Powell, & Greyser, 2011). In fact, BP was more concerned when it came to the expenditures for spill clean-ups and achieving targeted budgets and satisfactory financial results, rather than dealing with ethical and environmental responsibilities (Verschoor, 2010).
Philips declares that such activity among their staff is rare, and such extreme measures of discipline are hardly ever used. It would appear that Philips has good ethical behavior, in the sense that they are committed to going green and providing customer feedback through websites such as “Linked-In” Legality is also a strong aspect for them. It seems as if Philips would be a company that many people would trust in regards to moral principles with providing healthcare amongst other products.
The Body Shop’s ethical goals and values show that the Body Shop respects their surroundings, the people and the planet. They take these issues seriously and have in many cases based their entire organization on this set of values. It seems that the Body Shop has become successful also mainly due to the values that they hold. The Body Shop is a good example of an organization that takes their ethical responsibility seriously and also goes beyond what is expected of them. Most importantly it appears that the Body Shop genuinely wants to do good, it does not look like that they are doing this for positive publicity or as a means to obtain more customers.
Unfortunately, the public promotes and contributes to the success of companies such as Tesco and BP. Nobody forces the population to shop in a large chain store or refuel from gas station pertaining to a company of questionable ethical integrity. The customers are the prime reason for which corporations such as Tesco and BP exist. Therefore we should only blame ourselves for unethical practices used by these two companies. At the end of the day we are the ones that want cheap and high quality goods at the tip of our fingers. Unless all individuals unite and protest against unethical business philosophies, it will continue to effect the environment, suppliers and public in its own way.
Ethical practices are important in today’s business world, up to the point that it is expected that organizations are involved in some sort of ethical practices. In this modern market, consumers have a say and also have the power to ensure that organizations are being ethical. If however the consumers decide not to do anything about unethical strategies of specific companies, they will allow this “malign behavior” to continue. As a group, the researchers considered it is of upmost importance to stress that it is the consumers who have control over organizational practices; this is where the power of boycotting could prove useful. Ethical practices are not just the responsibility of the organization, but also of their clients. If companies are able to continue using unethical practices without anyone intervening, then it is also the purchasers’ faults for not reacting accordingly.