Ethical Issue Or An Ethical Dilemma

The case of Joseph in the text is a typical example for a business to be troubled by an ethical dilemma. The reason lies in that Joseph’s case illustrates the management problem that is related to ethical decision making, which is featured by several steps of clarified management roles. By criticizing the management problem of the case, we can get the conclusion that ethical decision making is associated with a number of steps. In the first place, a decision making should recognize the obligations or duties that the would be used to regulate the behavior of an organization. By recognizing the duties or obligations to the society, a business is thus expected to combine its economic goal to the social goal of management. So, in the modern environment, the objective of a business is not just limited in earning profit. To fulfill its social responsibility is also considered to be important in business management. Secondly, an understanding of the rational of the ethical dilemma should be reached once an ethical obligation is recognized. In the third place, resolution processes should be clarified so as to carry out the plan according to the principles that have been made. However, in the case of Joseph in the text, these management steps are not clear. So, the ethical problem of the case is reflected by the unclear management tasks concerning ethical decision making principles.

From this case we can see that to build up ethical principles of a business is important and decisive for the future development of the business. Modern businesses are constructed upon the deep understanding of the business culture. It is not just the purpose of profit making that is guiding the activities of business organizations. On the contrary, business organizations today owe their duties to the society in their different targeted market places. As a result, without the sense of constructing social responsibility, a business can not be recognized by the social ethical values or principles that are formed throughout long terms of practice of business management.

(b) Discuss the unethical behavior in the case by using the four factors of the ethical decision making framework in Figure 5.1 on p. 122 of the text.

The unethical behavior reflected by the case is the unclear understanding of the ethical decision making principles for corporate, which are mainly composed of four factors, i.e., problem identification, feasible alternatives specification, the identification of morally significant factors and resolution making. In the first, for effective ethical management of a corporate, stakeholders should identify the problem concerning ethical decision making process. They should be alert or be sensitive enough to morally charged situations. Also, information concerning the ethical decision making process should be collected carefully so as to support the management procedures. It is highly advised that jumping hastily into conclusions is not suitable. Usually, ethical problems of a business are analyzed according to the information derived from different sources, ranging from the concrete product or service management to the social duties that a corporate owes to the society. Next, feasible alternatives specification should be identified so as to provide evidence for further decision making. In the third place, a corporate should as well make clear the morally significant factors. That is to say, a corporate should identify the concrete fields concerning the concrete problems of ethical issues of the organization. For instance, as to the social responsibility of a corporate, it is considered to be one of the most important ethical contents of corporate management. Under the contemporary business environment, without the sense of social responsibility, a business can not be expected to develop in a sustained way. So, a long-lasting business culture is considered to be one of the most important prerequisites of business growth and its influence upon the different targeted market places. Finally, the ethical decision making framework should also clarify the resolution that is going to be carried out to implement the ethical management tasks that are clarified. The case in the text, as can be perceived obviously, violated the basic principles of the ethical decision making principles.

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(c) Define business ethics and explain why and how an understanding of business ethics could assist Joseph in this case.

Business ethics is one of the most important contents of modern business management. It is as well regarded as a form of self-regulation of a corporate. Business ethics requires a business organization to build in a self-regulating mechanism by which it effectively observes both political and business laws and maintains a sustained behavior in adhering international norms of dong a business. All business activities, including the management of products and services, the management of customer relationships and the management of staff members are closely related to the principles that are in accordance with business ethical strategies and principles. So, with this notion, businesses would embrace a social duty to monitor their activities concerning the interests of the customers, the share holders, the communities, as well as other members of the public in the targeted marketplace. Also, it is as well the responsibility of a business to promote the public interest by fulfilling its ethic goals to contribute to the overall development of the society. So, essentially, business ethics links the motivation of the profit-seeking and the social responsibility that influence the decision-making processes of business organizations at large.

Business ethics, to a large extent, reflects the social responsibility of a corporate. It is a fact that business ethics is not only to build up a good business image, it is as well important for contributing to the sustained development of the business at large. For example, in fulfilling the social responsibilities of modern business organizations, they should beware the social and psychological needs of the customers as well as the common public of the targeted marketplace. If a business only sets its management goal in earning profits and neglecting its social responsibilities, it would not go further in its future development by respecting the interests of the general public.

Question 2:

(a) Identify Wal-Mart’s primary and secondary stakeholders. Explain why you have classified them in this way.

Stakeholders can be divided into two types, i.e., the primary stakeholders and secondary stakeholders. For Wal-Mart, those who are responsible for the investment and ownership of Wal-Mart are considered to be primary stakeholders. They include the stockholders of Wal-Mart, the direct and indirect investors of the company so and so forth. The secondary stakeholders of Wal-Mart include those who keeps the business by being actively involved in the management of the business. The classification of Wal-Mart’s stakeholders in this way is mainly based on the features of the stakeholders. Usually, primary stakeholders are not directly involved in the practical management of the business while secondary stakeholders do. Both primary and secondary stakeholders are responsible for the business ethics on which the business is based. From this perspective, we can get the conclusion that the attitude of the stakeholders of Wal-Mart is decisive for the development of the business at large. To be sure, this is the same with other businesses as well.

(b) What is/are the ethical issue/s faced by Wal-Mart?

As a large international business in the world, Wal-Mart has long been enjoyed a good reputation in consuming goods market. However, due to the rapid expansion of its services into different parts of the world, the company has run into a series of trouble of violating the business ethics required by both the business ethical principles and the local traditions in the targeted marketplace. So, in order to cope with the development of its global service and the observation of the business ethical principles, Wal-Mart has to resolve these violations because the managerial body of the company knows it quite well that one of the most important features of modern business culture is the close observation of the principles of business ethics, which aim at fulfilling the businesses’ social responsibility. Business ethics requires business organizations as well as the employees to be responsible for stakeholders as well as the customers. So, business behavioral codes derived from business ethics often clearly identify those areas that would bring about harm to maintain the relationship between the business organization with the customers and the social environment in which a business survives. For Wal-Mart, it has to be honest and fair when providing its product and service to the customers. So, there has been a bond between business organizations and the society. It is by this bond that Wal-Mart can survive and develop in a sustainable way and is expected to be accepted and respected by the society.

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So, the ethical problems of Wal-Mart is related not only to the product and service quality it provides to the public but also its duties in gaining the confidence of the general public of the targeted marketplaces. So, in this sense we can see that business ethics is a complicated concept that is related to the business culture and behavioral code of the organization as a whole. Not a modern business organization can expect to develop and be accepted by the general public without the sense of ethical construction. To a large extent, the survival and development of a business is largely dependent upon its corporate responsibility and its ethical principles owing to the society.

(c) What is the role of stakeholders in business ethics? Provide two examples of this from the case.

The major role of stakeholders in business ethics is to build up a corporate social responsibility (CSR) that benefits both the business itself and the society. Although corporate social responsibility is an important principle in business management, it is still considered to be controversial in its actual implementation. For instance, as to the responsibility to the customers, different businesses may have different principles or standards. In the meanwhile, the different understandings concerning how business organizations are connected to the overall social environment of a targeted market place are also varied. In most modern countries, the social responsibility of businesses is considered to be one core content of business culture. It is an element that contributes to the long-term profit to companies in the modern business environment that highlights the business culture and duties to the whole society. To put it another way, if a business only focuses on the profit-making orientation of development and neglects its social responsibilities, it would not go long in future development.

(d) According to the case, the behavior of former vice chairman Thomas Coughlin “created new concerns about leadership” (Ferrell, Fraedrich & Ferrell 2010, p. 299). What is leadership and what is the relationship to a firm’s ethical culture?

According to the case, the former vice chairman Thomas Coughlin created a leadership style that aims to enhance the CSR of the business. Through this cases we can see the close relationship between the leadership style and the formation of business ethics and the sense of CSR of a business. Traditionally, there has been a debate concerning the contradiction between profit making and social duty construction of a business. The result of management directly results from the idea of leadership style that is important in forging the business culture under the modern environment of business. There has been a theory that corporate social responsibility distracts businesses from its economic purpose of earning money. But there are still many other people think that the adoption of management strategies concerning corporate responsibility to the society is as well an important way to develop the business in a sustained way. The reason lies in that if a business is not supported by the society, it would not go further with its marketing expansion to different places. That is to say, if a business is short eye-sighted by focusing chiefly on making profits and neglecting its social responsibility, its business culture can not be fully accepted by the society and in this way it is not likely to obtain a sustained mechanism to develop its businesses.

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(e) Assess Wal-Mart’s current corporate social responsibility using the four steps of social responsibility in Figure 2.3 on p.39 of the text.

Wal-Mart has maintained a big business in the world market of consuming goods. It has gained remarkable business success. The company has long been paying attention to its performance in social responsibilities in China. For example, in 2008, Wal-Mart China helped Wuxi, a city in Jiangsu Province, to provide a solution to treat the water in the Taihu Lake, which was seriously polluted by municipal sewage and industrial wastewater. This project proves to be significant to clean the water resource in south Jiangsu, Shanghai and the neighboring cities and towns in the Yangzi Estuary and benefits about 30 million people in this area. Apart from these activities of environmental protection, Wal-Mart has adopted many other measures to enhance its social responsibility as an important content of business management. Actually, according to its business ethical philosophy, responsible corporate leadership is a specific strategy for Wal-Mart to achieve its sustained development business goal in different targeted marketplaces in the world.

Question 3:

(a) Use the Connected database (available at the CQ University library website) to access the annul report of one company. Outline the main recommendations of Principle 1, 3 and 8 of the ASX Corporate Governance has complied with those Principles. Include examples to support your discussion.

Business ethics is usually considered to be one of the most important management content of modern business organizations. The annual report of Siemens 2009 reflects such a content. According to the ASX Principles and Recommendations 1,3 and 8, Siemens has done an excellent job in ethical management in its targeted marketplaces.

Principle 1: Lay solid foundations for management and oversight

According to the annual management report of Siemens, the foundation for management and oversight is the basic consideration for the sustained development of the company. This proves that the mechanism of Siemens’ development of business is based on a long-term sustainability that pays special attention to business ethics and corporate social responsibility.

Principle 3: Promote ethical and responsible decision-making

The report also reflects the focus on ethical principles of decision making of the company, which is another important principle of the ASX Principles and Recommendations.

Principle 8: Remunerate fairly and responsibly

This implies the humane treatment of the employees of Siemens and can be considered to be the ethical duties to the employees of the company. It is as well thought as one of the basic requirements of the sustained development of the business.

(b) What is the transparency and what is the relationship to corporate governance? Explain how the ASX Corporate Governance Principles and Recommendations address transparency issues.

The transparency principle of ASX lies in the business behavior that is operated according to the honesty principles of business ethics. This involves a series of different factors. In the first place, ethical principles of corporate governance indicates the equal rights of employees within a business organization. They have the same right to share the information of the business and can produce constructive suggestions to the development of the business. In the second place, employees managed according to transparency principles can be effectively motivated. That is to say, by clarifying the management processes of a business, the employees can know better the management goals of a business. This is considered to be an important principle in the ASX Corporate Governance Principles and Recommendations.

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