business_ethics final doxx

8/13/2019 Business_Ethics Final DOxX

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Sanjari international college

Business EthicsM Mohaiminul I Chowdhury



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Table of Contents

Introduction: .................................................................................................................................... 3

Task A: Ethical perspectives in business. ....................................................................................... 4

1.1 Background and development of theoretical ethical approaches ............................... 4

Background of Business Ethics: ...................................................................................... 4

1.2 Compare and contrast absolute and relative ethics .................................................... 6 1.3 Ethical issues which can affect the operational activities of a business .................... 8

Task 2: Business objectives from an ethical perspective .............................................................. 11

2.1 How business objectives are affected by ethical considerations ............................. 11

2.2 Evaluate the implications for a business and its stakeholders to operate ethically .. 12

Task 3: Ethics in workplace relationships. ................................................................................... 14

3.1 The role of the company acting as moral agent ....................................................... 15

3.2 Analyse the development of mechanisms for achieving employee involvement and

empowerment ................................................................................................................. 17

Task 4: Current ethical issue in a business. .................................................................................. 18

4.1 Current ethical issue affecting McDonalds: ............................................................. 18

4.2 How to improve ethical issues in McDonalds: ........................................................ 21

4.3 Design a suitable ethical code .................................................................................. 23

Reference: ..................................................................................................................................... 25



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Task A: Ethical perspectives in business.

1.1 Background and development of theoretical ethical approaches

Background of Business Ethics:

Business ethics is the attitude and ways in which a business is formed and the way in which a

business deal with the world. Many businesses behave in divert or different ways depend on the

way it‘s formed by the owners of the business. Business ethics can be described as principle and

standard that is guiding behaviour of people in the business. Many business have different

reputation depends on the ways in which they are formed some business have bad reputation

while some have bad reputation. Some businesses are formed for money making venture while

some are formed because they want to make money and at the same time want to give its

customers maximum satisfaction. The way in which a business is formed brings about ethical behaviour. Ethics is a set of moral principles that a business should follow and values that a

business should embraced in order for a business to be successful. Most business should have a

code of ethics in order for the business to have a principle guiding the business so that the

business can be flourishing.

Crane A and Matten D (2004) defined business ethics as the study of business activities and

decisions where issues of wrong and right are addressed.

DEVELOPMENT OF BUSINESS ETHICS:

The Development of Ethics‘ proves a rather misleading title for Terence Irwin‘s latest book. He

describes it more accurately as ―a selective historical and critical study in the Socratic tradition,

with special attention to Aristotelian naturalism, its formation, elaboration, criticism, and



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defence‖. ‗Socratic‘ refers to Irwin‘s method: not merely describing ―a collective Socratic

inquiry‖ historically but also evaluating it and taking part in it . B. Schneewind, who think that ―a

moral theory cannot be assessed timelessly, and there are no timelessly appropriate questions that

different moral theories try to answer,‖ Irwin declares that history reveals substantial agreement

on the main principles of ethics. The historian‘s task i s to discover them. Small wonder, then,

that Development does so little to illuminate how ethics changed over time.

Availablefrom:<http://muse.jhu.edu/journals/hph/summary/v047/47.4.kent.html,>[Accessed on

20 September 2013]

Teleological ethics:

Theories of this type are called teleological because they look at what happens (or will happen)

following an action which has a moral dimension – what the outcome (or end – which is where

‗telos‘ comes from) is or will be. Typically, one‘s actions may then be good if the outcome is

desirable. Of course, predicting what will happen if we take a particular course of action is not

all that the theories are about. They are ethical in that they prescribe what sorts of consequences

are good – ones we ought to do; and what sorts are bad – ones ought not do.

Deontology: This is a Greek word which means deno, which mean duty and the logos, means

science. It focuses on moral rules and duties. In order for us to make moral choice, we have to

know our moral duties and how we can adjust to those duties. If we obey our duties we are doing

morally things and if we fail to follow our duties we are doing immoral things. In deontology our

duties, rules and obligation is according to God wishes.

Utilitarianism

Utilitarian ethics emphasizes the consequences of our acts. And for utilitarians, the important

consequences are obvious: pleasure and suffering. From the utilitarian perspective, there is nomystery about ethics: the right act is simply the act that produces the greatest balance of pleasure

over suffering.

Though the formula is simple, the calculations may be complex. We must consider the

consequences not just for ourselves, but for everyone; indeed, not just for all humans, but for any



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being capable of pleasure or pain and not only immediate consequences, but also long-term

effects.

Pragmatic

Pragmatic ethics involves an evolutionary-based teleological theory — although not wholly

Darwinian in nature. 'Teleological' is often treated as a synonym for 'consequentialist', but it is

important to make a distinction. Consequentialist ethics measures the goodness of an action in

terms of its effects, relative to some value ('happiness' in classic utilitarianism). Consequently, it

is really an outcomes-based ethic. It does not involve movement towards an end, but a

maximization of a value.

In teleological ethics, on the other hand, the goodness of an action is measured by how much it

contributes to a certain end, function or purpose, and focuses on movement towards something in

an on-going process. Classically, such teleology‘s are external, i.e., imposed from without--

divinely, or by the order of things--or immanent, realized through an inherent nature.

1.2 Compare and contrast absolute and relative ethics

Relative ethics/relativism

This theory states that there are no absolute truths, validity or generally acceptable principles of

ethics and that what is morally right and wrong largely depend on individual and the prevailing

societal views and cultures. The fact is that the relativist believed that the criteria for measuring

right and wrong change over time and vary across cultures. Simply put, relative ethics is the

denial of ethical absolutism.

Relativism holds the view that morality is relative to the beliefs and norms of one‘s cultu re i.e.

categorizing an action as right or wrong depends on the moral values hold by the society in

which such action is practice. An action may be classified as morally right in one society but

morally wrong in another. In the light of this, the relativist argues that there are no broad and



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universally acceptable moral standards as these are dictated by what is being practice in the

society. Summarily, what is right for one may not be right for another or as a saying goes ―When

in Rome, do as the Romans do ‖ This is the idea behind the concept of relativism.

Arguments against and for relativism

One of the arguments against relative ethics is that some is the belief of some people that

universal moral standards is possible to be adopted even if some moral norms and beliefs differ

among cultures. Although, great attention can be given to cultural differences in moral practices

and beliefs, some of these practices and beliefs that are morally wrong should be pointed out; for

example, the practice of slavery before the civil war in various countries. Relative ethics fails to

recognize the fact that the rationale behind certain societal practices may be governed by self

interest.

Since the moral rightness and wrongness of action depends on what is prevailing in the society

according to relative ethics, it follows that one must obey the norms of a society irrespective of

whether such norms are generally wrong or right because to diverge from them is to act

immorally. Does it mean that if one is part of a society that embraces racial discrimination, one

should accept and promote it?

Also, it is possible that members of the same society hold different views and beliefs on a similar

practice. How do one judge what is morally right or wrong in such situation? The concept ofrelativism does not address this situation.

Despite the criticism above, the concept of relativism still has some acknowledgement for

addressing societal issues which are important. Relative ethics points out the fact that different

societies hold different beliefs and these beliefs are influenced by culture. It also encourages

individuals to explore the rationale for differences in belief while also challenging them to

examine reasons for beliefs and values they hold .

Absolute ethics/absolutism

The concept of absolutism explains that certain actions or decisions are absolutely right or wrong

regardless of their outcomes or consequences as well as the rationale behind them. For example,

eavesdropping to private matter might be considered to be always morally wrong even if the

reason for doing such thing is good, and even if it leads to good result.



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Simply put, ethical absolutism states that there is universal or one single moral code or standard

that is absolute and which is equally applicable to everyone in the society at all times. From this

fact, it is evident that absolute ethic is not dependent on individual views, existing cultures of the

society etc.

Arguments for and against absolutism

While moral relativism is seen as only leading to problems and c onflict in one‘s life and in

society, it was argued that moral absolutism will lead to no or little confusion i.e. when moral

standard is based on general principles. The other argument for absolutism is that it is true and to

some extent, seen in our everyday lives. For example, we condemn or criticize wrong actions and

praise good ones. This is an evidence that moral standard which is based on general views exist.

Judging what is right and wrong on a universal moral standard is seen as criticizing other

people‘s culture. According to the relativist, this is intolerant as moral criticism of others is

inappropriate. Another fundamental criticism of absolutism was its lack of human concern.

Critics argued that trying to maintain order by forcing or frightening people into conformity by

agreeing to a universal moral standard can destroy an individual potential for moral judgment.

Many philosophers also argued to oppose the idea of absolutism in a situation of life and death.

For example, suppose it is decided that it is absolutely wrong to lie under any situations, what if

one is faced with the choice in which he/she must lie as a result of no other alternative.

1.3 The ethical issues which can affect the operational activities of a business

Ethics refers to a prescribed or accepted code of conduct. Ethical issues are a set of moral values

that need to be addressed while carrying out business. Businesses operate in a society that is

structured around moral values. Therefore, when conducting its operations, a business has certain

responsibilities which are to provide the society with quality goods and services that will

improve the people‘s living standards.

In order to survive, a business needs to maintain its customers. Product packaging is one way of

ensuring a business maintains its existing customers and also acquire new customers. Some



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companies are known to allow underweight packaging of products which are then highly priced

and this is a rude way of increasing profits. However this negative trend will affect the business

in the long run as customers will eventually come to learn that they are being swindled.

In the long run, wrong dealings and corruption will tarnish the image of the business and have a

negative effect on sales. Business people ought to comply with the law requirements and observelaid down principles of morality in their dealings. They should seriously consider expectations of

the community they serve.

Values in business activities:

Ethics refers to a prescribed or accepted code of conduct. Ethical issues are a set of moral values

that need to be addressed while carrying out business. Businesses operate in a society that is

structured around moral values. Therefore, when conducting its operations, a business has certain

responsibilities which are to provide the society with quality goods and services that will

improve the people's living standards.

In order to survive, a business needs to maintain its customers. Product packaging is one way of

ensuring a business maintains its existing customers and also acquire new customers. Some

companies are known to allow underweight packaging of products which are then highly priced

and this is a rude way of increasing profits. However this negative trend will affect the business

in the long run as customers will eventually come to learn that they are being swindled.

In an attempt to boost sales, some businessmen adapt promotional methods that mislead

customers as the message conveyed may not give the exact details of the product.

Businesses should desist from increasing prices without valid reasons. In doing so, they will be

taking advantage of the customer and this is unethical. Businessmen should also desist from

taking part in corrupt practices such as selling low standard goods while bribing government

officials in order to continue operating. Entrepreneurs should consider the effects of their

activities on the society they serve.

Ethics on employee workplace and human rights:

Policies most frequently exist because some employees are untrustworthy. For example, many in

HR debate the effectiveness of a paid time off (PTO) policy versus time off policies that divide

http://moneymakingsecret07.blogspot.com/

http://humanresources.about.com/od/glossaryp/g/pto_policy.htm

http://humanresources.about.com/od/glossaryp/g/pto_policy.htm

http://moneymakingsecret07.blogspot.com/



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available days between personal, sick days, and vacation time off. The only reason these policies

exist at all, to define the relationship between employer and employees, is because a few

employees took advantage of the employer‘s attempts to offer sympathetic time off for legitimate

life reasons.

Consequently, employers limited management discretion and decision making about individualemployee situations and instituted policies to govern the many. You can build a similar case for

most organizational policies. The failure of some employees to practice principled workplace

ethical decision making results in policies that cover all employees.

Codes of conduct or business ethics exist to guide the expected behavior of honorable

employees, but much of their origination occurred for the same reason as policies. Some

employees conducted themselves in ways that were unacceptable to the business.

In today‘s workplace, potential charges of unfair treatment, discrimination, favoritism, and hostile

work environment replace much management discretion. The many suffer for the few and

sometimes, your best employees get caught in the equal treatment trap. At best, time off policies,

to use just one example, require organization time and energy – hundreds of hours of tracking

and accounting.

Ethics in corporate governance:

Ethical Corporate Governance refers to the processes and policies that a company has in

place to deal with issues concerning how it is administered and conducts day to day business. It

is important to remember that companies exist primary to create a product or service, which is

used to generate profit. However that intention must be balanced with controls that ensure a

company pursues profit without crossing over the line into the realms of unethical behaviour.

Stakeholders may only be concerned with a company‘s performance and earnings, but bad

corporate governance can be symptomatic of greater problems with the company. For example,

before the collapse of Enron, the company and its associated traders are believed to have

artificially inflated the price of energy in certain US states, thus increasing their profit margins.

While this action alone was not enough to cause the company to collapse it was a clear indication

that internal controls had failed, which of course meant that other much larger abuses were

possible, which eventually lead to the downfall of the company. (http://www.icharter.org )

http://humanresources.about.com/od/glossarys/g/sick_days.htm

http://humanresources.about.com/od/glossaryv/g/paid_vacation.htm

http://humanresources.about.com/od/discrimination/Discrimination.htm

http://humanresources.about.com/od/workplace-discrimination/g/hostile-work-environment.htm


http://www.icharter.org/






http://humanresources.about.com/od/discrimination/Discrimination.htm

http://humanresources.about.com/od/glossaryv/g/paid_vacation.htm

http://humanresources.about.com/od/glossarys/g/sick_days.htm



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Task 2: Business objectives from an ethical perspective

How ethical problems are resolved in the context of the business or corporateand individual conduct

An organisation's core ethical values and standards should underpin everything that it does and

the way its employees conduct their everyday business. Business ethics is about "doing things

ethically". How an organisation approaches the social and environmental impacts of its business

operations and its voluntary contribution to the wellbeing of the global and local communities in

which it operates, is often known as Corporate Social Responsibility (CSR); it is often about

"doing ethical things". The IBE believes that an organisation cannot be genuinely responsible

without an embedded and inherent culture that is based on ethical values such as trust, openness,

respect and integrity. This is why the IBE prefers to talk about Corporate Responsibility (CR) asa wider, concern, rather than using the more limiting 'social' tag.

2.1 How business objectives are affected by ethical considerations

Many of the decisions that a manager needs to take can be considered ethical decisions.

Improving efficiency can be seen as an ethical decision taken in the interests of the society as a

whole, applying service objectives universally and fairly can be seen as an ethically justified

decision, and a consideration of the relative benefits of different groups from services is an

ethically justifiable process as long as it is undertaken to ensure the most ethical distribution of

resources (New, 1996).

ETHICAL ISSUES THAT CAN AFFECT THE OPERATIONAL ACTIVITIES OF

TODAY’S BUSINESS

An ethical issue can be described as a problem, situation or opportunity which requires

individuals, group or an organisation to choose among several actions those which must be

evaluated as right or wrong, ethical or unethical. Hence, an ethical issue from business of point

of view is a subject matter which raises questions about the standards of conduct or behaviours

which are being adhered to by the company separate from the financial motives.



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Business objectives as shareholders value:

Business cannot be ethical, only the managers and corporate strategists can

implement ethics within the framework of the business strategy.Corporate ethics and shareholder

desires for profitability are not always aligned, and it is the responsibility of executive

management to ensure ethics supersede profitability. In its simplest form, corporate ethics is alegal matter. Abiding by laws protecting workers' rights and appropriate compensations is a top

priority for management. Corporate governance and ethics becomes more difficult with the

indirect implications of particular practices, making it important to assess the way in which

certain operations may adversely affect the community at large.Managers are the primary

decision-makers, and therefore must hold themselves accountable for the way in which a

business operates and affects stakeholders, shareholders, employees, and the community at large.

Business objectives as CSR:

Global climate change is rapidly becoming the defining issue of our time (Kirk 2008). The need

for the human race (and by implication for corporations) to deal with the challenges of corporate

social responsibility (CSR) in order to avoid an impending ecological collapse, is succinctly

articulated in the following statement: ―If we insist on ruining the planet, we have to stop

claiming we are a superior species‖ (Berliant 2009).

Ethical decision-making could facilitate strong corporate performance and produce competitiveadvantage, whereas unethical decision-making may result in very different outcomes, including

tarnished brands and crippled bottom lines (Allen 2009). Allen (2009) argues that ethical

behaviour can appreciate over time to provide lasting value, providing an exponential return on

ethics. Stakeholders usually invest their trust in corporations long before investing their dollars

(or Rands), resulting in trust ranking higher than goodwill on the balance sheet. It should be

remembered that the corporate ethical approach adopted will affect the nature, effectiveness and

result of any CSR and corporate governance interventions

2.2 Evaluate the implications for a business and its stakeholders to operate

ethically

https://www.boundless.com/management/definition/ethical/

https://www.boundless.com/management/definition/ethics/

https://www.boundless.com/management/definition/profitability/

https://www.boundless.com/management/definition/responsibility/

https://www.boundless.com/management/definition/governance/

https://www.boundless.com/management/definition/governance/

https://www.boundless.com/management/definition/responsibility/

https://www.boundless.com/management/definition/profitability/

https://www.boundless.com/management/definition/ethics/

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Implications of Businesses Operating Ethically

All businesses have a number of stakeholder groups, each with different interests in what the

business does. Business owners - perhaps the key stakeholders - want good financial

performance from their investments. Business managers know that it is their first responsibility

to deliver good financial results.

However, while it was always acknowledged that businesses exist in a diverse social, economic

and political environment, today it is also accepted that a business should be managed with the

interests of all stakeholders in mind.

Stakeholders of a business:

Shareholders

Employees

Customers, Suppliers and Competitors

Citizens

Bankers, Stock Markets and Financial Commentators

Businesses today have to balance the aims of a number of stakeholders. This is sometimes

difficult because the interests of stakeholder groups can conflict with each other.

E.g. shareholders have a financial interest in the business and want their shares to increase in

value, whereas environmentalists look to protect the natural environment.

If a business successfully launches a new product and all is going well, the shareholders will be

very pleased that their cash investment looks like returning a healthy profit.

If, however, an environmental group mounts a big campaign to prevent this business operating in

the way it does, these two stakeholders are in conflict. Success for environmentalists may mean a

loss for shareholders.

Implication of ethical trading:



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It is about being prepared to look beyond economic objectives to consider the wider

implications of business decisions. From an international perspective, it is becoming increasingly

more important, so if trading overseas (importing and/or exporting), it's important to bear this in

mind. Treat an ethical trading policy as essential, not as a luxury. Business will be ahead of many

others by considering the need for an ethical trading policy early on.

Implication of ethical policy:

Draw up a map or chart of the ethical and ecologically sustainable issues for business will be

focused on. Some examples include:

Fair Trade practices, goods, and services

Sourcing office and sales products from sustainable sources

Using forest products that have been certified by the Forest Stewardship Council (FSC)

Looking after the welfare of all staff in the supply chain

Keeping customers well informed of business practices

Not using bribery or supporting corruption in business dealings overseas

Ensuring animal welfare, against animal testing or vivisection

Having a willingness to help suppliers improve the quality control of their produce and to

improve their own practices (through knowledge transfer)

Making health and safety of all staff and suppliers a top priority

Respecting the environment.

Task 3: Ethics in Workplace Relationships.

http://www.wikihow.com/Trade-Commodities

http://www.wikihow.com/Create-a-Control-Chart

http://www.wikihow.com/Green-Your-Clothing

http://www.wikihow.com/Save-the-Rain-Forest

http://www.wikihow.com/Use-Safety-Slogans-Correctly

http://www.wikihow.com/Use-Safety-Slogans-Correctly

http://www.wikihow.com/Save-the-Rain-Forest

http://www.wikihow.com/Green-Your-Clothing

http://www.wikihow.com/Create-a-Control-Chart

http://www.wikihow.com/Trade-Commodities



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3.1 The role of the company acting as moral agent

A moral agent is anyone capable of making ethical decisions and putting them into action. The

idea that an organization has moral agency stems in part from U.S. Supreme Court decisions

declaring that a corporation is a person in the eyes of the law. That makes an organization

accountable for the predictable results of its actions. In practical terms, this means businesses

have a responsibility to the public to act ethically.

Stakeholder as moral agent:

Ethical values enter management decision-making; it is often suggested, through the gate of

stakeholder analysis. But the suggestion that introducing "stakeholder analysis" into business

decisions is the same as introducing ethics into those decisions is questionable.

The first reply does question the morality (vs. immorality) of strategic reasoning as the ultimate

principle behind stakeholder analysis. It acknowledges that strategy, when placed in a highly

effective legal and regulatory environment and given a time-horizon that is relatively long term,

may well avoid significant forms of anti-social behavior. But it asserts that as an operating

principle for managers under time pressure in an imperfect legal and regulatory environment,

strategic analysis is insufficient. In the Poletown case, certain stakeholders (e.g., the citizens of

Detroit or the residents of Poletown) may have merited more ethical consideration than the

strategic approach would have allowed. Some critics charged that GM only considered these

stakeholders to the extent that serving their interests also served GM's interests, and that as a

result, their interests were undermined.

Moral obligations:

While most companies are equipped to deal with a changing business environment, there is a

stark difference between organic change and that stemming from heavy-handed regulation. To

act blatantly against community interests increases the risk that the ‗rules of the game‘ are

reformed for business, rather than reformed by business.



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Where we tend to struggle is when we have to balance issues of economic growth, jobs and

political interests with activities that impose significant, longer-term costs on community. The

tobacco industry was a case in point, where the ‗rubber band‘ between the two interes ts was

stretched far enough to invoke a harsh regulatory response.

The stoush between the vested interests of the gaming industry and legislators is a flash pointthat highlights the tension between gaming profits and the social cost of gambling addiction. It is

a complex issue and one the gaming industry would prefer to have avoided; it may be asking

itself if it could have pro-actively managed a better outcome. For business, it is a commercial

issue that has moral dimensions. Likewise, emitting carbon is not so much the "greatest moral

issue of our time‖; it is the business issue of our time.

Responsibility versus Accountability of business as moral agent:

The roles taken on by public relations practitioners imply a responsibility to perform certain

functions associated with those roles. Business historian Vincent E. Barry has defined the term

responsibility, when used in business affairs, as referring to ―a sphere of duty or obligation

assigned to a person by the nature of that person‘s position, function, or work.‖1 Responsibility

could thus be viewed as a bundle of obligations associated with a job or function. Narrowly

defined, role refers to a job description, which, in turn, encompasses, but is not limited to,

function. For instance, a practition er‘s role may be that of media relations. Function would refer

to the specifics of the job, including press release writing and dissemination, as well as the

maintenance of good media relations.

In this sense, responsibility refers to more than just the primary function of a role; it refers to the

multiple facets of that function — both processes and outcomes (and the consequences of the acts

performed as part of that bundle of obligations). A responsible actor may be seen as one whose

job involves a predetermined set of obligations that must be met in order for the job to be

accomplished. For example, the primary functional obligation of someone involved in media

relations is the same as cited in the foregoing sentence: to maintain a good working relationship

with the media in order to respond to queries and to successfully work with them to ―get out the

message.‖



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3.2 Analyse the development of mechanisms for achieving employeeinvolvement and empowerment

Empowerment is the process of enabling or authorizing an individual to think, behaves, take

action, and control work and decision making in autonomous ways. It is the state of feeling self-

empowered to take control of one's own destiny.

When thinking about empowerment in human relations terms, its better avoid thinking of it as

something that one individual does for another. This is one of the problems organizations have

experienced with the concept of empowerment. People think that someone, usually the manager,

has to bestow empowerment on the people who report to him.

Empowerment in organization:

Empowerment is the process of enabling or authorizing an individual to think, behave, take

action and control work and decision making in autonomous ways. It is the state of feeling self-

empowered to take control of one's own destiny.

When thinking about empowerment in human relations terms, try to avoid thinking of it as

something that one individual does for another. This is one of the problems organizations have

experienced with the concept of empowerment. People think that someone, usually the manager,

has to bestow empowerment on the people who report to him.

Consequently, the reporting staff members wait for the bestowing of empowerment, and the

manager asks why people won't act in empowered ways. This led to a general unhappiness,

mostly undeserved, with the concept of empowerment in many organizations.

Employee ownership:

Consult your employees and determine what decisions they face on a daily basis that they do not

feel empowered to make. Give them specific boundaries of what they can and cannot managewithout oversight and then share with them the logic of how these decisions should be made. If

you want cashiers to manage discounts, educate them on pricing strategy and overall business

finance, showing them how discounts can affect overall business performance. Being transparent

about how your business is run and your goals and concerns helps employees understand how

the decisions they make impacts the entire business.



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Empowerment does not happen overnight and a set of new rules will not be enough to transform

your place of business. First and foremost, you must truly see the value of empowerment, be

willing to change the way you operate as a business owner. Take the time to listen to your

employees and find out what sort of empowerment they need to do their job better. Second, you

will set appropriate boundaries and give employees the tools they need through training and

development. Finally, make empowerment an ongoing vision of your company and continually

look for ways to develop ownership in each and every person that you hire.

Task 4: Current ethical issue in a business.

4.1 C ethical issue affecting McDonalds:

McDonalds being the world's largest hamburger chain fast food restaurant owes the environment

a lot in terms of its Corporate Social Responsibility. The environment in this case implies its

customers, business partners as well as the public at large. The firm has played a large role in the

past towards conserving the environment.

McDonald's core values are all aimed at promoting the Corporate Social Responsibility of the

firm. This is achieved through giving value to the customers, the supply chain as well as the

other business partners with whom McDonalds does business. McDonalds indeed acknowledges

the fact that its customers are the reason behind its success and existence. Therefore, the

customers are very much valued within the company. The company thus strives to create a warm

and welcoming environment for its customers.

Secondly, McDonalds values its employees and states that it is committed towards the career

growth and development of its employees through a comprehensive training plan. This is perhaps

the greatest CSR that McDonalds has. McDonalds believes in empowering and valuing the

employees for increased commitment from them and their continued success.

Current Ethical Issues:

One of the main ethical criticisms consistently faced by McDonald's over the last 30 years relates

to the food offered in its stores. Critics claim that McDonald's is a major contributing factor to

the ever-increasing levels of obesity in the U.S. and other developed countries. Medical studies

show that 'waistlines are expanding faster in the UK than in any other European country...with 1



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in 5 adults dangerously overweight' (Walsh, 2003), while in 2001 it was reported that 300,000

deaths a year in the U.S. are related to obesity compared to 400,000 through cigarette smoking'

(McMans Depression and Bipolar Weekly, 2004). McDonald's contribution is a result of the

unhealthy nature of fast food.

Stakeholders in a corporation may not only be human because animals are also seen as animportant part of society and deserve the same treatment as humans. McDonald's has been

criticized for the way it treats animals before they are killed and turned into fast food. 'The

corporation is the world's largest promoter of meat-based products, the largest user of beef and

the second largest user of chicken' (McSpotlight.org: McDonald's and Animals, 2005), and thus

is faced with the usual claims aimed at slaughterhouses. It is claimed that 'chickens were

crammed into sheds with less than one square foot of space per bird and no daylight' (Inside the

McLibel trial, 1995).

McDonald's also 'annually produces over a million tons of packaging used for just a few minutes

before being discarded' (McSpotlight.org: Environment, 2005). Traditionally a number of ozone

depleting gasses were used in polystyrene foam packaging. In the 21st century, McDonald's uses

almost all recycled packaging. However, the company still faces criticism due to the amount of

waste it produces.

The range of ethical criticisms leveled at McDonald's throughout the world has been well-

publicized. However, many of these issues were first raised in the 1970's before tighter

regulation was imposed and unethical behavior became a hot topic. After 30 years of criticism, it

is important to look at what measures McDonald's has taken to improve its ethical conduct and

how far this has been successful.

Community responsibility

For ages, McDonalds has been supporting the Olympic Games through feeding program aimed at

feeding the athletics. McDonalds is also involved in various charities and also supports educationin the developing countries where it has its franchises and fast food restaurants. As part of its bid

to return back to the society, McDonalds has sponsored several children programs involving

eradication of illiteracy and poverty.



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McDonalds also sponsors a number of events worldwide including the Olympic Games and

walks. Over the past calamities, McDonalds has been involved in disaster response where it has

supported the victims of such disasters. Just recently during the Haiti disaster, McDonalds

moved in to donate a handsome amount towards the rebuilding of the destroyed country.

According to Morris, Willey and Sachdev (p.54), McDonalds has also supported various

community based programs such as sponsoring the education of poor children in India and Asia.

Diversity:

A manager should develop a competency to understand the cultural diversity and deal with it.

Psychological maturity and Self-awareness are 2 competencies that a manager has to essentially

develop to face the circumstances in the present environment (Harris & Kumra, 2000). Many

researchers have suggested ways in which a culturally diverse workforce should be dealt. Conejo

(2001) has suggested steps to dealing with problems faced by managers due to culturally diverse

workforce. They are to determine the diversity, explore the patterns, identify the characteristics,

establish a sequence of action & share the ideas.

Rijamampianina & Maxwell (2002) have designed a little more sophisticated 4 step process to

manage a culturally diverse work force. The steps are motivational process, interaction process,

visioning process and learning process.

Toledo‘s (2008) rules to solve a conflict without allowing the cultural disparity to come into theframe of action are to solve the problems as quickly as possible, avoid taking emotional

decisions, talk only to people who are involved, listen, plan & do not give charge to anyone else;

Solve it yourself. But there are quite a few backlashes to this kind of approach though it might

look very promising. Sometimes if the conflict is very aggressive, it should be given some cool

down time; an attempt to solve it as soon as possible might only aggrevate it. Sometimes line

managers tend to take the decisions by themselves without furthuring the issue to the higher

authority, and they often take wrong decision due to a lack of understanding of the cultural

background.

Environmentalism:



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There are a variety of aspects about the corporation of McDonalds that have resulted in negative

impacts on society. These impacts span from a wide variety of health risks, exploitation of

foreign and domestic labor markets, environmental drawbacks, and the issues with globalization.

McDonald‘s promotes their food as nutritious; however, it is far from being healthy food. Thereality is that it McDonalds food has many negative effects on the human body because it is

contains ingredients that are high in fat, sugar and salt, and low in fiber and vitamins. Despite

their efforts to include nutritious substitutes on their menu the problem still persists. A diet of

this type is linked with a greater risk of heart disease, cancer, and diabetes. McDonalds contains

many chemical additives, some of which may cause ill health, and hyperactivity in children.

Labour Issue:

Throughout the corporation there are large problems with labor exploitation and the low wages

that are paid to their labor force, these low wages counteract with the rising cost of living

throughout the world. McDonald's franchises often times do not pay overtime rates even when

employees work very long hours. This usually results in a lowered incentive to work. McDonalds

tends to be understaffed because there is pressure to keep profits high and wage costs low. This

results in their workers to work harder and faster for less money. As a consequence, accidents,

particularly burns, are common. The majority of employees are people who have few job options

and so are forced to accept this exploitation, and they're compelled to remain ―happy‖. Not

surprisingly, staff turnover at McDonald's is high, making it virtually impossible to unionize and

fight for better deals, which suits McDonald's who have always been opposed to Unions.

4.2 How to improve ethical issues in McDonalds:

McDonalds has been able to achieve high success through its identification of the elements that

make it succeed most. These elements include its employees, customers and the suppliers.

McDonalds values its employees and has various training programs to support their bid towards

an excellent service provision. The company draws its success mostly from its employees.

McDonalds also hires quality and highly valuable employee's thus ensuring continued success

for the company.



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McDonalds also draws its success from its highly valued customers. The company provides the

customers with nutrition information thus ensuring that the customer makes informed decision.

Moreover, the firm develops well balanced diets that meet the dynamic requirements of each fast

food market. Indeed, customers have enabled the firm to develop strongly with most customers

referring others to the fast food giant. The customers also benefit from the advice of the

international nutritionists as well as the nutrition experts that are dissipated to McDonalds on a

regular basis (Daft and Marcic, p.11).

Code of Ethics:

Contribution of environment:

McDonalds should support for the environment has ensured that its CSR continues to grow. The

firm has many ways of giving back to the community. McDonalds supports various sponsorship

programs, the most profound being that which supports the education of children (Carter and

Clegg, p.48). McDonalds also feeds the athletes at the Olympic Games. Poverty eradication has

also been a priority for the company as it seeks to improve the standards of living.

Contribution to employees

McDonalds has a policy within all its subsidiaries and fast food restaurants worldwide of giving

its employees a priority over all other things. The firm indeed identifies that employees are core

in the company's success. McDonalds has in the past devised training programs aimed at

employee development. Moreover, the firm empowers its employees to take up new challenges

in the fast food market.

Furthermore, McDonalds supports human rights which forms part of it global business conduct.

Respect to life and the preservation of human dignity has enabled the company to excel in its

core relationship with its employees as well as customers and business partners. This has enabled

McDonalds to grow through its appreciation of human life and dignity, an area where many other

companies have failed.

Recommendation



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McDonalds should make us of solar energy, which is a renewable form of energy. This will go a

long way towards ensuring that there is less carbon emission. The EPA would thus be pleased

with the efforts propagated by McDonalds.

McDonalds should also run advertisements in the media to promote its balanced healthy diet.

The advertisements should also contain nutrition advice on various ways of eating healthy fastfood diets. The firm should also diversify its diets to ensure that it meets the requirements of

different ages.

4.3 Design a suitable ethical code

A code of ethics is a collection of principles and practices that a business believes in and aims to

live by. A code of business ethics usually doesn't stand alone, it works in conjunction with a

company's mission statement and more specific policies about conduct to give employees,

partners, vendors, and outsiders an idea of what the company stands for and how it's members

should conduct themselves.

The key in distinguishing a code of ethics from these other documents is to hit the right level of

specificity. It should address both the particular nuances of the company's industry as well as its

broader goals for social responsibility and should be concrete enough to serve as a guide for

employees in a quandary without laying out rules for every situation that could arise. Policies can

include issues such as a company's commitment to not work with vendors who use child labor or

are environmentally harmful, not discriminating in their hiring, and not taking bribes.

"A code of ethics is about corporate culture," says Michael Connor, the editor and publisher of

the online magazine Business Ethics . "[Many small- to medium-sized businesses] have a code of

ethics; it's probably not written down in many cases but it wouldn't hurt if it was." Connor

believes that there's no such thing as a business being too small to benefit from a code of ethics.

Having a code is "often viewed as a luxury or something that is an added cost," he says. "Thereality these days is that the business that does not have a code of ethics subjects itself to a much

greater risk in its day-to-day operations and if there is an unfortunate incident, they expose

themselves to much greater risk from regulatory and prosecutorial authorities."

Suitable ethical code could be as follows:

http://business-ethics.com/






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Foster the highest ethical standards amongst MacDonald personnel.

Be effective in preventing, detecting and appropriately reporting and addressing anyallegation of misconduct and violations of law by MacDonald personnel.

Comply with government procurement laws and regulations. Standards of FederalBusiness Ethics and Conduct apply to MacDonald employees, as well as third parties,acting on MacDonald behalf in support of the US Federal business.

Set forth the standards and practices that MacDonald suppliers are required to uphold.For instance, ensuring environmental certificate, non use of child labor, compliance inHR management etc.

Provision for health and medical support to the employee of MacDonald.

Support education of child, poverty reduction and charitable health care agencies globallyfor their health awareness program related to food habit.

Set forth the policies and make sure that MacDonald‘s personnel are non smoker and nonalcoholic.

Environmental responsibility

According to Kotler and Lee (p.19), McDonalds has won the Energy Star Partner of the Year

award which is usually awarded by the Environmental Protection Agency (EPA). McDonalds

has been recognized for its massive efforts in reducing greenhouse emissions. The firm is

sensitive to the environment and concerned more about the global warming. This has promotedthe firm to save on energy and thus avert carbon emissions.

McDonalds should take its social responsibility concerning the environment seriously. The firm

established its very own Global Environment Commitment (Houk and Williams, p.134). The

company has continued to focus on improving its commitment towards the environment. As far

as McDonalds CSR regarding the environment is concerned, the fast food giant has in the past

and present focused on three main areas namely; energy efficiency, sustainable packaging and

waste management as well as green restaurant design. McDonalds has sort to use more energyefficient strategies such as the use of natural gas in the fast food restaurants. McDonalds

continues to seek ways of increasing energy efficiency. Furthermore, the fast food giant also

seeks to reduce the impact of its operations on the environmental impact.



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Reference:

Carter Chris and Stewart Clegg. Business ethics as practice: representation, reflexivity and

performance. Amsterdam: Edward Elgar Publishing, 2007.

Daft Richard L and Dorothy Marcic. Understanding Management. 6th ed. Edinburgh: Cengage

Learning, 2008.

Ferrel O C, Linda Ferrell and John Fraedrich. Business Ethics: Ethical Decision Making and

Cases. 6th ed. Melbourne: Dreamtech Press, 2005.

Fisher Colin and Alan Lovell. Business Ethics and Values: Individual, Corporate and

International Perspectives. 3rd ed. New York: Prentice Hall, 2008.

Gitman Lawrence J and Carl McDaniel. The Future of Business: The Essentials. 4th ed. New

York: Cengage Learning, 2008.

Hanekamp Gerd. Business ethics of innovation. Paris: Springer, 2007.

Hartman Laura P and Joseph R. DesJardins. Business Ethics: Decision-Making for Personal

Integrity and Social Responsibility. California: McGraw-Hill/Irwin, 2007.

Hoffman W. Michael. Power and responsibility in the American business system: proceedings

of the second National Conference on Business Ethics. California: University Press of America,

2008.

Kotler Philip and Nancy Lee. Corporate social responsibility: doing the most good for your

company and your cause. Washington: John Wiley and Sons, 2005.

Malachowski Alan R. Business Ethics: International and environmental business ethics. Berlin:

Taylor & Francis, 2001.

May Steve Kent, George Cheney and Juliet Roper. The debate over corporate social

responsibility. Cambridge: Oxford University Press US, 2007.

Morris Huw, Brian Willey, and Sanjiv Sachdev. Managing in a business context: an HR

approach. New York: Financial Times Prentice Hall, 2002.



Ethical corporate governance http://www.icharter.org/articles/ethical_governance.html , Accessed

on 28 September 2013

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