Ethics are justifiable standards that describe what is wrong and right and stipulate what humans should do in terms of obligations, rights, fairness, societal benefits, and particular virtues. Ethical values guide the behavior of various individuals at professional, personal, and organizational levels. Business ethics is a type of professional ethics that assesses the moral values and problems that emerge in a business setup (Higgins-Desbiolles & Monga 2021). An organization’s culture creates a written or unwritten value and code of principles that commands its actions and decisions. Business ethics have various benefits for both the organization and the employees in various ways; for instance, it builds its reputation. The most crucial asset a business has and will strive to maintain is its reputation because it determines the company’s performance. With consistent ethical behavior, organizations build customer loyalty and attract customers and potential investors.
Additionally, having an ethical business nature increases the productivity of the company’s employees. When the ethical standards, values, and principles are stipulated, the employees adhere to them, making them fasten their decision-making process as they make the right decisions. Employees normally follow the behaviors they observe around them; setting ethical values and morals creates focus, drive, and supports honesty and integrity amongst the employees, increasing their performance level. Finally, having an ethical business environment boosts customer confidence. With a good reputation and customer relations, the company’s consumer’s attraction is boosted hence making more sales (TREVINO, 2017). There is various importance of practicing ethical businesses; for example, the company will attract more investors, build the reputation of the organization, retain good and productive employees and create a competitive advantage in terms of customers.
Unethical Business Conduct in Multinational Corporations
Samsung group is a South Korean multinational corporation that produces electronic devices. The company is recognized worldwide as an industry leader in technology and its specialization in electronics devices. According to THE VERGE, 2022, Samsung made sales above $150bn, marking history since its operations began. This made it fall in the top three of the best companies dealing with electronic devices. Due to the pressure on the company to meet the demands, the organization opted to ask its outsourcing organization (HEG electronics) to hire more workers and change shift timings for its employees. The company later acted unethical by hiring underage workers. Additionally, the company started interfering with the normal employee shifts and breaks.
Moreover, they employed underage workers that were underpaid compared to others. Other violations that the employees face included gender discrimination during the hiring process, unfair system of attendance, unfair reward and punishments in the companies system, labor contract, and remuneration system issues (Fletcher 2015, p 631). Being the outsourcing company for Samsung, the Samsung group was drugged into this controversy. Its name became attached to providing a poor working environment for employees, strict punishment and fines, frequent work injuries, gender discrimination, and low pay.
Bangka Island sources the tin that mobile phone companies use. The island was reported for mining unregulated tin, with more miners being underage employers. Samsung Company was also linked by the controversy of using these unregulated tins from Bangka Island hence not being transparent to its supply chain (Crawford 2021, p.37). It is not okay to employ underage individuals, overwork, and underpay them. It is not ethical to practice discrimination amongst employees of an organization because this demotivates and discourages them, increasing their low productivity rate. Organizations should provide a conducive working environment for employees for this helps them develop a form of security and senesce of belonging. Companies should treat employees equally, employ overage individuals and stop gender discrimination. Additionally, the organization should practice transparency in all areas to protect the company’s reputation and employees.
Nike is an American multinational corporation that deals with sportswear. It is the largest athletic apparel company globally which engages in designing, manufacturing, development and sales of footwear, apparel, accessories, and equipment. For the longest period, Nike has contracted various factories intending to get the best products with cheap labor. They are not concerned with the well-being of the contracted factory or companies employees. Nike has been charged with human rights violations which is an unethical practice that may affect the company’s reputation (Anon 2019, p. 20-38). The human rights violation charges that Nike has faced over the years include child labor, employee exposure to harmful chemicals, provision of unsafe working environment, and unsafe precautions and use of machinery.
The factories that Nike contracts for production promote human rights violations, and Nike assumes the claims. It is unethical for Nike to continue getting the benefits of cheap labor, not considering the employee’s wellbeing (Knorr-Cetina & Preda 2012, p.235-239). In Vietnam, Nike’s factories exposed employees to Toluene and other chemicals like glue without safety equipment, affecting their health and drastically reducing their lifespan. Employees were subjected to overtime working hours with no pay with threats of unemployment hence slavery. When companies inject slavery into their employees, their ethical code of conduct is compromised, leading to human rights violation (Knorr-Cetina & Preda 2012, p.235-239)s. It is not right to mistreat employees. Exposing employees to harmful chemicals and toxins cause death. After working tirelessly and producing the best, it is important and reasonable for the organization to pay employees equally without discrimination or issuing threats of unemployment in cases of resistance.
Violating human rights is an offense punishable by the law; therefore, the company should be sued for violating the rights of its employees (Knorr-Cetina & Preda 2012, p.235-239). Providing a conducive working environment for employees increases their sense of belonging and motivates them; however, when they are working in poor environments, their lives can be affected, and the company’s productivity level may be reduced. It is not right to treat employees as salves, for they contribute much to the organization’s performance. Nike should be responsible and considerate to employees of factories they contract. Additionally, Nike should not pay the lowest possible payment for their merchandise production despite subcontracted companies being third-world countries with cheap labor and a relatively low cost of living(Knorr-Cetina & Preda 2012, p.235-239). Nike as a company should have a social contract with society that will make them accept to pursue policies that will follow the desirable actions and add value to society.
Coca-Cola is an American international beverage corporation that engages in manufacturing, marketing, and retailing beverages. Over the years, Coca-Cola Company has experienced claims of unethical practices in different areas where they have built bottling plants, for instance, in India. According to (Ciafone 2019, p.236-245), complaints arose in India that Coca-Cola drinks contained high pesticides, harmful for human consumption. The community near the bottling plant complained of waste sludge disposed of by Coca-Cola as a fertilizer that has caused health issues and environmental pollution. Finally, the local villagers of Perumatti complained of water shortage since the opening of the bottling plant. However, Coca-Cola blamed the lack of rainfall in the region. Coca-Cola lacked transparency in its operations which is an ethical concern. It is not right to cause environmental pollution, and companies should operate in pollution-free environments.
It is important for companies to be transparent in their operations to help determine environmental problems that may arise in society because of their existence. Additionally, Coca-Cola should not violate human rights by injecting harmful chemicals into beverages consumed by its customers. To be in an ethical contact of business, the company should reduce the issue of environmental pollution by using recycled plastics. Moreover, the company should reduce water usage and recycle wasted and used water.
Ethics are set standard that governs the behavior of individuals. Business ethics is a practice in work environments that stipulates right or wrong. There are various important reasons why it is necessary to have an ethical business nature, for instance, building and maintaining customer loyalty and reputation and attracting potential investors. The various benefits of practicing an ethical business include increased employee productivity, quick and right decisions making procedures, and boosting customer attraction. Various multinational organizations have been spotted for practicing different unethical practices, for example, Samsung, Nike, and Coca-Cola. These companies have been dragged into controversies about unethical practices like employing underage individuals, gender discrimination, providing poor working environments, exposing employees to harmful and toxic chemicals, disposing carelessly of waste materials, overusing water causing shortage, and underpaying employees. There are various ways these companies can change these unethical acts, such as providing equal pay to their employees, fighting against gender discrimination, providing remuneration and a healthy working environment, reducing water usage and wastage, and focusing on activities that benefit the societies around them. It is of great importance to be ethical in operation, for it will build the organization’s reputation enhance potential investors’ attraction and customer loyalty development.
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Ciafone, A., 2019. Counter-Cola a multinational history of the global corporation. Oakland: California University of California Press.
Crawford, K., 2021. Atlas of AI: power, politics, and the planetary costs of artificial intelligence. New Haven: Yale University Press.
Fletcher., 2015. International Marketing. s.l.: Pearson Australia Pty Ltd.
Knorr-Cetina, K. & Preda, A., 2012. The sociology of financial markets. Oxford: Oxford University Press.
TREVINO, L. K., 2017. MANAGING BUSINESS ETHICS STRAIGHT. s.l.: HOBOKEN JOHN WILEY.
Briski Law Firm. “Protecting Employee Rights for 25 years.” November 20, 2018. https://www.briskilawfirm.com/samsung-accused-of-refusing-to-hire-applicant-because-of-his-religious-beliefs/.
Max Nisen. “How Nike Solved Its Sweatshop Problem.” May 10, 2013. https://www.businessinsider.com/how-nike-solved-its-sweatshop-problem-2013-5?r=US&IR=T.
RILEY JONES. “Enes Kanter Calls out Nike for ‘Silence’ Over Human Rights Issues in China.” October 27, 2021. https://www.complex.com/sneakers/enes-kanter-calls-out-nike-silence-human-rights-issues-china.