Managing Values and Corporate Responsibility in Global Business Operations - Essay Example

Profits and Principles Name Professor Institution Course Date Profits and Principles Introduction The collapse of Rana Plaza in Bangladesh led to extensive debate concerning corporate social responsibility within international supply chains. Basing their analysis on Rana Plaza happening, Lundi (2011) thinks that government needs to audit the buildings and contractors on their compliance with the law. This incident is regarded as the fatal garment-factory disaster in history, including the fatal accidental building failure in current human history. In this incident 1,129 lost their and about 2,515 injured individuals were saved from that building alive (Economist 2013). The Irish brand Primark was set to compensate the victims of the fatal incident. However, the discussion was delayed leaving the victims struggling to survive. On this situation, the government was the first to be blamed in failing to audit the building to find whether the contractors followed the laws (Lundi 2011). Notably is that, the Bangladeshi media had reported that assessors had found out the cracks on the building a day before and called for evacuation and closure of the structure. According to Ferguson & Jolley (2013), the bank and the shops on lower floors closed immediately, but garment employees were compelled to return to the building the following day by their supervisors who declared the building as safe. Ferguson & Jolley (2013) claim that managers of some clothing companies even threatened to hold back the workers monthly salary that declined to come to work. It is from this case that the values, ethics and global corporate responsibility were questioned. Following this Rana Plaza disaster in Bangladesh, Global Alliance for Ethical Manufacturing in the Clothing Industry (GAEMCI) one of the companies in the building through executive officer is rolling out ethical business conduct in Australian division that will used to run the company (Economist 2013). Therefore, this essay assesses what ethics, values and global corporate responsibility principles the document will contain. According to Hayes & Walker (2005), workplace code of ethics, values and global corporate responsibility are a critical part of service, as all are factors that can help an organization in employee’s career development and also to enhance profits. In fact, ethics and values are just as significant to most organizations’ performance as higher teamwork and morale are two elements of success (Fisher & Lovell 2009). Each business in each sector has particular guidelines in which its staff must follow, and often outline such elements in employee handbooks. Poel, van de & Royakkers (2011) argue that as the globalization is taking shape, these ethics, values and corporate responsibility has to conform to the world standards. Following the incident, GAEMCI conclude that all the three stakeholders have the responsibility to uphold some ethics and values. Such ethics and value include right to workplace safety protection, moral reasoning and honesty. The systemic failure by government and management to protect human rights and the respect their employees’ right enabled Rana incident Plaza happen (Ferguson & Jolley 2013). The state and the employer hold the obligation to protect its employees against rights breaches by third parties as well as business enterprises, by means of policy making, investigation, enforcement and regulation. In the incident Rana Plaza disaster, the employer failed to protect its employees even after the alarm having been raised that the building had cracks and it was recommended that everyone should be evacuated and the building be closed (Ferguson & Jolley 2013). GAEMCI must understand that employees are very important part of the business, since they run the business and make profit for the shareholders. Yperen (2006) contends that the employers must also understand that besides making profit, they have the social responsibility to promote social welfare. In this case, it must protect its employee’s rights, i.e. right to life, an obligation to work in an ideal environment (Motial 2011). The company also has to develop safety and health codes and inform the employees about them. Failure of practicing value-oriented workplace ethics damages the company’s image and what the company stand much more than it affects the co-workers (Pogman & Frieser 2011). GAEMCI management must always use moral reasoning in making decision whenever conflict of interest arises. Moral reasoning will help them rise above the dilemma that comes with the business (Rendtorff 2009). In the case of Rana Plaza disaster and the clothing company failing to protect its customers and employee, the employees can be said to have not used moral reasoning. Value ethics demands that an employer has to inform and protect the employees at the expense making profit. In the real sense, employers can only operate the business well when their employees are in good health. The employers had the responsibility to evacuate its employees and close the business so as to protect both its customers and employees. However, they did ignore the evacuation call opting to make more money. Unfortunately, this money is still used for compensation and starting a fresh business since everything was destroyed. For GAEMC to avoid such expenses in future, it must be honest with its employees about workplace health and safety and also use moral reasoning in such cases. Nevertheless, the employees and the customers also hold the responsibility for his or her own safety (Rendtorff 2009). The employees have the right to refuse to work in unsafe environment. Bangladeshi media had reported that inspectors had established cracks on the Rana plaza and recommended the evacuation and closure, but the clothing companies refuted the claims. Since ignorance is not a defense, employees and the customers who went ahead to operate and shop also has to be blamed for not projecting their own rights and well-being. These universal workplace ethics, values and corporate responsibility mentioned above also conform to utilitarianism, Kantianism, justice and rights principles. Utilitarianism believes in doing something to others the same way one would to be done unto them, and in loving others as oneself (McDonald 2009, p. 27). He says this makes up an ideal rightness of utilitarian ethics. Bentham and Mill say Utilitarianism is self-gratifying just when the consequences of one’s action has no categorically negative effects on others (Brenkert & Beauchamp 2012). Even though the GAEMC satisfaction and happiness is to maximize profits, that course of action should not cause negative effects on its employees. In adhering to utilitarianism principles clothing companies that were forcing to work even after being warned about the crack on the building should have known the intended outcomes of their actions. For the love of their employees and their rights, the employers would have not forced the employers to work with danger existing in the building while employees from other sectors are evacuated. Schwartz & Saiia (2012) posit that the concept of utilitarianism and social corporate responsibility recommends that employers must make sure that their moral framework goes beyond the organization to conform to universal ethics. Managers have to commit companies to actions which are in line with both the pursuit for high efficiency and the idea of CSR (ILO 2013). Kantianism is established on the premise of rationality as the final good and its conviction that every person is fundamentally rational being (Simon, Powers, & Gunnemann 1972). This universal maxim supports acting according circumstance and also doing well unto others. In a nutshell, it claims that managers would not use employees as an end but not as means of improving the profits (Motial 2011). On the other hand, Rawls’ justice and rights principle consider that ethical behavior that respects basic rights shared by every human being (McDonald 2009, p.29). This perspective is attached closely to the law of fundamental human rights like those of liberty, fair treatment and life by rule of law. In the organization, this concept is demonstrated in issues such as rights to due process, freedom of speech and protection among others. In using moral minimum concept for corporate responsibility, the GAEMC ensure that injuries are reduced to employees, organization and the society at large. These concepts suggest that every individual has a set of individual morals and values that they hold accountable to in conducting their daily activities. According to Schwartz & Saiia (2012) these principles of ethics and values frequently go far beyond the set laws by the organization. GAEMC is needed to act within the moral minimum, described as the minimum level of ethical actions required of a business and more particularly, conformity to the law. Though the company is allowed to go far beyond this moral minimum by balancing decisions above legality and profitability, and assessing what makes up right and wrong actions (Schwartz & Saiia 2012). In the perspective of the Rana Plaza disaster, the employers needed to make sure that they take measures in the building whereby they are doing their business as well as protecting their suppliers, customers and employees (Ferguson & Jolley 2013). This view is also supported by the affirmative duties which state that businesses have to act in conformity to the justice and laws to avert harm. Decisions making is one of the major factor in running an organization. In the situation of dilemma, managers need to use some ethical principle to arrive at a solution. Such principles also include Kew Garden Principles which claims that institutions and individuals have moral duties to help when other people are in severe needs (Rendtorff 2009). In some cases, in particular in incidents which entail unpredictable hazards, duties or responsibilities of an individual may not be clear. According to that Principle, four elements are critical for determining the roles of an institution or an individual to take action of helping others (Rendtorff 2009). According to Pogman & Frieser (2011) these elements include Need, Proximity, Capability and Last resort. The need criteria provide when a risk is declared, there is a need to assess it and look for a solution. In the situation of Rana Plaza, the company was operating in the same building and was in proximity of evacuating its employees and customers to avoid injuries. The principle claims that a company must put up capability to which they can manage health and safety at the workplace (Hollenbach 2008). The measures should be set and employees informed of those measures so that they not only rely on the management but can manage them individually (Stuart, Sarow & Stuart 2007). The last criteria under this principle remind the manager that they must act as the last resort in managing disasters and stop thinking that there is anyone else who will do it. This will ensure they do not wait for disaster to happen but set guidelines on how to prevent the occurrence. From the utilitarianism point of view that does to others what you want to be done unto you, De George in his five guidelines cautions the companies that should not exploit workers and resources of third world countries so as to enrich themselves (Dixon, Drakakis-Smith & Watts 2013). From his first guide GAEMC Australia must adhere to the universal living, social and business standards not like the US despite of where they operate their business. The second principle of De George advises that now that GAEMC is operating in Australia, they must do good more than bad in that market and uphold ethical values. The company must also shun individualism, profit centeredness, promote human rights and pay its taxes as set by the Australian law. One of the pioneers of CSR Milton Freidman view also cannot be ignored by GAEMC Australian. Freidman in his article stated that “a business only have one social responsibility of business of employing it resources and engage in activities that aims at increasing its profits as long as the business remains within the rules of the game, in free competition devoid of deception or fraud (Schwartz & Saiia 2012). GAEMC should not use this statement selectively in Australia to mean that the sole purpose of a business in to make profit. Rendtorff (2009) maintains that the rules of the game should imply that people who are involved in the business are protected in terms of safety, adequately remunerated and fairly treated. Conclusion In conclusion, GAEMC should bear that it has more responsibilities rather than just maximizing profits since it needs to consider the ethics, values environment and the larger Australian society. This may imply that GAEMC requires moving from the aspect of liberal capitalist and turn to be more considerate of its stakeholders. While shareholder theory point outs towards the being more leaned in increasing shareholders’ value, the social responsibility of upholding the welfare could be endangered. Therefore, a balanced standard of CSR which is transparent may be perfect to make a positive contribution to Australian society in general. The move away from Corporate Social Responsibility to Corporate Responsibility would be necessary so long as standard regulations are morally enforced by the management. References Brenkert, G & Beauchamp, T 2012, The Oxford handbook of business ethics, Oxford, UK< Oxford University Publishing. Economist 4th May 2013, Disaster at Rana Plaza 2013, viewed 20 August 2013, www.economist.com/news/leaders/21577067-gruesome-accident-should-make-all- bosses-think-harder-about-what-behaving-responsibly Dixon, S., Drakakis-Smith, D & Watts, H 2013, Multinational corporations and the Third World, Routledge, New York, NY. Ferguson, S & Jolley, M 2013, Fashion victims, viewed 20th August 2013, www.abc.net.au/4corners/stories/2013/06/25/3785918.htm Fisher, C & Lovell, A 2009, Business ethics and values: individual, corporate and international perspectives, Pearson Ltd., Essex, UK. Hayes, B & Walker, B 2005, Corporate Responsibility or Core Competnence, Routledge. Hollenbach, D 2008, Refugee ethics: ethics, advocacy and Africa, Georgetown University Press, Washington, DC. International Labor Organization n. d., Safety and health at work, viewed 20 August 2013, www.ilo.org/global/topics/safety-and-health-at-work/lang--en/index.htm Lundi, C 2011, Social work, social justice and human rights: a structural approach to practice, University of Toronto Press, Inc., Toronto, CA. McDonald, G 2009, Ethical Relativism vs Absolutism, European Business Review, vol. 22, pp. 25-31. Motial, S 2011, Applied ethics and human rights: conceptual analysis and contextual applications, Anthem Press, New Delhi, IN. Poel, van de, I & Royakkers, L 2011, Ethics, technology, and engineering: an introduction, John Wiley & Sons, New York, NY. Pogman, L & Frieser, J 2011, Cengage advantage books: ethics. Discovering right and wrong, Cengage Learning, Stamford, CT. Rendtorff, C 2009, Responsibility, ethics and the legitimacy of corporations, Copenhagen Business School Book Press, Copenhagen. Schwartz, M & Saiia, D 2012, Should Firms Go “Beyond Profits”? Milton Friedman vs Broad CSR, Business & Society Review. Simon, J., Powers, C & Gunnemann, J 1972, The ethical investor, viewed 20 August 2013, http://acir.yale.edu/pdf/EthicalInvestor.pdf Stuart, B., Sarow, M & Stuart, L 2007, Integrated business communication: in a global marketplace, John Wiley & Sons, New York, NY. Yperen, M van 2006, Corporate social responsibility, viewed 20th August 2013, http://www.oecdguidelines.nl/wpcontent/uploads/Kenniscentrum/Sector%20informatie/T extiel%20International%20Overview%20CSR.pdf Read More