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Topic: Business Ethics: Across North AmericaThis is the fourth part of group paper.
Requirement of this part:Country Level: importance of business ethic in the society. ( Canada )Firm Level: importance of business ethics to the firm&its practice. (Walmart)The attachment below is our introduction, theories and Conceptual Framework. Please read attachment first.
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Business Ethics: Across North America
Introduction
Introduction of Study:
Business ethics
Business ethics is a comprehensively established field concerned with the
moral dimension of business operations. In the context of global business, business
ethics is based on the moral standards of the countries they operate in. With a setting
like this, business ethics explores moral problems and ethical principles in the
business landscape. In essence, to achieve high ethical standards requires businesses
to be in line with sound moral principles.
From the antiquity, business ethics have evolved and changed rapidly as
organizations continuously realize the benefits of enhanced ethical conduct as well as
the correlation between ethics and the firm’s financial performance. Business ethics
act as guidelines and moral principles for firms to conduct their operations (De Ruiter
et al., 2018). In this case, it means acting ethically based on the existing standards that
determine right and wrong. For instance, an unsafe working environment is regarded
as unethical. Most of the organizations are under scrutiny from human rights group,
customers, trade unions, shareholders, and government to ascertain that they are
ethically conducted.
Business ethics involves proper business practices and policies concerning
controversial issues including CSR, discrimination, fiduciary, corporate governance,
insider trading, and bribery. Consequently, ethical dilemmas in decision making
involve organization conflict between its social responsibility and economic activities
(Sroka & Szántó, 2018). In this case, a company should compare choices rudimentary
to organizational morals, beliefs, and values. Remarkably, international businesses
assume global business ethics by understanding local customs, upholding human
rights and involving local partners in decision making.
North America
North America is the third largest of the world’s continents and located on
between the Arctic Circle and the Tropic of center. Also, its area is 9,355,000 square
miles, there are 23 countries. The population is more than three hundred million in 2018,
it is the fourth in the world. There are a lot of benefit points such as natural resources,
large forests, ample water, and the most fertile soils in the world because of the
continent. It means that North America could be the most growth economic regions in
the world. Moreover, in North America, the average income in each person and the
amount of taking food are higher than other continents. Especially, in North America,
we chose three countries, “the United State of America” where is the highest GDP,
“Canada” where is the largest area, and “Mexico” where is the largest city.
the United State of America is one of the prospered countries, and GDP is
over 20 trillion dollars. The area is approximately 4 million square miles and located
on the center of North America. Also, this country is concluded 50 states, the population
is approximately 300 million. In economic points, GNI per capita is $ 53128.54 (2017),
the unemployment rate is 4% (2019), and minimum wage is $7.25 (TRADING
ECONOMICS).
Canada is the second largest size, and 10th-biggest economy. The area is
about 3.8 million square miles, and located in above the United States. The population
(2018) is 35 million and it is the 36th largest country in the world. In economy, GDP is
$1,827 billion, GDP per capita is $51,959. Also, the unemployment rate is 6.21%, the
minimum wage (2018) is $11.55 (TRADING ECONOMICS).
Mexico is located in directly south of the United States and is close to not
only the United States but also Guatemala, Belize because of the Gulf of Mexico. The
population is more than 110 million, it is the 11th highest in the world. Also, the society
of Mexico is complicated, which there is a large gap between wealth and poverty.
However, even though they have a lot of problems as a developing country, it is said
that Mexico is one of the main growth countries in Latin America. In the economy,
GDP (2017) is $1,151 trillion, GDP per capita (2017) is $946.16, the unemployment
rate (2018) is 3.4%, and the minimum wage (2018) is $5.1 (TRADING ECONOMICS).
Fig. 1 – North America
Corporate social responsibility
The ultimate goal of CSR is to ensure that organizations conduct their
business in an ethical manner. This implies taking account of their environmental,
economic, and social impact (Zhao et al., 2018). To accomplish this, CSR involves
socially responsible investments, environmental protection, working with local
community and building relationships with customers and employees. Notably, CSR
builds a positive business reputation, therefore increases market penetration and better
brand recognition. In addition, it establishes a market niche for the corporation which
results in customer loyalty and increases in sales (Zhao et al., 2018). In this respect,
an organization tends to have better financial performance and continuous growth.
The global trends that relate to CSR and business ethics are a social contract
between employees and employer, corporate philanthropy, and growth of global
ethics. In this context, when businesses internationalize and expand into the global
market, it is vital they sustain their CSR and business ethics (De Ruiter et al., 2018).
This would also mean that multinational corporations have a responsibility in
respecting local customs as well as implement ethical guidelines in the host country.
Therefore, social responsibility, globalization, and international business operations
affect each other. In the end, as the world becomes an increasingly global community,
it is essential for multinational corporations to assume a global set of business ethics
and CSR.
Motivation
In the early days, the study of business ethics has not been paid enough
attention by the society. However, with the financial scandals of Enron, WorldCom
and the scandals of cheating the government subsidies of Japan’s largest dairy
companies, the issue of business ethics has gradually attracted people’s attention.
With the development of commercial economy, there are more and more problems in
the economic society. Many problems are related to the lack of business ethics.
Therefore, companies need to strengthen the awareness of business ethics, and the
importance of business ethics for companies.
Business is successful, and the products or services it provides contribute to all
forms of happiness. This shows the importance of business ethics to companies. From
an economic point of view, non-economic factors, including business ethics and
morality, have a significant impact on the perfection and development of market
economy. Policy formulation and program implementation of economic activities
must embody certain concepts and moral principles. From a social point of view,
enterprises are the main stakeholders and actors in the market economy. Economies
pursuing their own interests will inevitably have conflicts and contradictions with
other stakeholders. At this time, business ethics can play an important regulatory role
in commercial society.
Business ethics are not compulsory laws, but rather directive and restrictive
policies. Business ethics form the cornerstone of an enterprise and even a business
society with its harmonious and permanent development. It points out that good
business ethics can enable companies to protect the interests of investors, because
self-restraint can enable managers to consider moral judgments before making
business decisions. At the same time, the employees who have been influenced by
business ethics can help resist the management’s bad behavior to a certain extent. On
the other hand, the lack of business ethics will lead to the rise of capital risk of listed
companies, and the lack of ethical constraints of management is likely to take the
opportunity to transfer corporate resources for personal gain.
It can be concluded that enterprise morality is one of the important factors for
enterprise success. Every entrepreneur and manager should fully understand the role
and significance of enterprise morality and management morality in enterprise
management, so that enterprise morality and management morality can be
continuously enriched and perfected in enterprise management practice.
Company Perspective
An Ethical Company of the U.S.- Canon Inc.
Canon U.S.A Inc. is a leading provider of consumer, business to business, and
industrial digital imaging to the U.S., Latin America, and the Caribbean markets and
has been around for 60 years (Canon, 2018). Canon U.S.A. Inc. was named one of
the 2018 “World’s Most Ethical Companies” by the Ethisphere Institute (Canon
U.S.A. Inc., 2018). This recognition is based on many factors including improving
culture, leading with integrity and being transparent, and diversity and inclusion.
On Canon’s website under sustainability there are multiple environmental and
sustainability initiatives that Canon peruses. The first initiative is a series of recycling
programs where Canon works with its customers to ensure proper recycling of Canon
products, helping the environment. Canon provides multiple options like Canon Laser
Return Program, where they collect used toner cartridges and recycle them. The goal
is to achieve zero landfill waste (Canon U.S.A. Inc., 2018). Canon also has a
consumer products recycling program where it ensures appropriate recycling of
consumer and small office products to help improve the environment.
In a more employee or career standpoint, Canon was honored as one of the
world’s most admired companies for 2019 by FORTUNE magazine. According to an
article from Cision PR newswire, Canon U.S.A. is committed to the highest level of
customer satisfaction and loyalty. The company is dedicated to its social and
environmental responsibility, and in 2014 Canon Americas Headquarters secured
LEED Gold certification, which is a recognition for the design, construction,
operations and maintenance of high performance green buildings (Canon U.S.A. Inc.,
2019).
An Unethical Company of the U.S.- United Airlines
United helps unite the world by connecting people to the moments that matter
most (United, 2019). The business is driven to be the best airline for the employees,
customers and everyone served. Values of United include: we fly right, we fly
friendly, we fly together, and we fly above and beyond. All of the value listed are
aimed around giving the customers excellent service and enjoyable flights that are
safe, respectful, communication, welcoming and warm, and with passion for staying a
step ahead (United, 2019).
For the past couple of years, United has been in the news for bad customer
service and unethical practices. Hobica and Charles Leocha, presidents of the airline
passenger advocacy group Travelers United think that the company has a culture
where the employees are treated poorly, resulting in the customers getting treated
poorly (Matousek, 2018). An example of treating the employees poorly is the time
when United turned the employees’ bonus system into a lottery. This lottery only
allowed a small percentage of employees to receive cash, vacation package, or
Mercedes- Benz (Matousek, 2018). Other incidents include an employee pushing an
elderly man to the ground, selling a toddlers’ seat for standby and forcing the boy to
sit on his mother’s lap and many other examples.
When a business shares not only a vision, but shared values as well, and that
business does not follow through there will be backlash and frustration among
employees and customers. Many consumers trusted United airlines to accommodate
and ensure safe and easy travel all over the world. And when they instead get
violence, threats, and confusion it’s not an ethical business. United Airlines has
broken the we fly right, we fly friendly, we fly together, and we fly above and
beyond, which are all shared values explained by the company, resulting in unethical
practices.
An Unethical company of Canada – Canada Goose
Canada Goose Holdings Inc. is a well-known Canadian clothing company
founded in 1957 by Sam Tick. Canada Goose is known for selling a variety of jackets,
fur coats and other cold-resistant clothing. Recently, the Animal Ethics Treatment
Organization (PETA) is actively fighting against Canadian geese because they believe
that Canada Goose’s production materials are obtained in an unethical way. Although
the Canadian Goose claims that it only uses “moral sources and fur”, but the eyes of
the PETA are exposed, Geese were herded into small wire pens, where they panicked
and trampled each other. At least one died, and a worker tossed the dead bird Over the
fence(Kretzer, 2018).
An Ethical company of Canada – Tim Hortons
Tim Hortons Inc. is a multinational fast food restaurant known for its coffee and
donuts. In 1964, Canadian hockey players Tim Horton and Jim Charade founded the
company in Hamilton, Ontario, Canada. This is Canada’s largest fast food chain,
which is now headquartered in Oakville, Ontario, Canada. The aim of Tim Hortons is
that the raw materials are fresh every day, such as coffee beans, flour and so on.
Every morning, the coffee is made on the same day, and the remaining coffee that was
ground the day before will not be sold.
An Unethical company of Mexico – Walmart
Walmart is the world’s largest retail company. Wal-Mart stores are located all
over the world. Wal-Mart Mexico is Wal-Mart’s largest overseas branch. In
September 2005, Wal-Mart’s senior lawyer received an email stating that Wal-Mart
Mexico had carefully planned a bribe to dominate the market. After the investigation,
the investigators found a large amount of expenditure documents, and found that Wal-
Mart Mexico executives not only knew about these expenses, but also took measures
to hide the matter from Wal-Mart’s headquarters in Bentonville, Arkansas. This
bribery is against corporate ethics.
An Ethical Company of Mexico- Grupo Bimbo
Grupo Bimbo is the global leader in the baking industry and an important part
in snacks. The company has 199 plants, over 139,000 associates, and over 3.2 million
points of sales (Grupo Bimbo, 2019). They have also reached a US money amount of
14.9 billion dollars. This company produces and distributed fresh and frozen sliced
bread, cookies, English muffins, bagels, and many more products. Grupo Bimbo
operates in 32 countries throughout: American, Europe, Asia, and Africa.
Grupo Bimbo was honored as one of the most ethical companies in the world
by the Ethisphere Institute, it was also the first Mexican company for this list since
2007 (Grupo Bimbo, 2014). Grupo Bimbo received this honor because of its
promoting ethical business standards, practices ethics internally, enabling managers
and associates to make good choices, and shaping the future baking industry standards
in terms of ethics. Dan Servitje, CEO of Grupo Bimbo stated that the company must
always work with an ethical and social vision and all social actors are responsible
with future sustainability (Grupo Bimbo, 2014).
Grupo Bimbo has many policies within the company that have to do with
ethics and sustainability. The first important policy is the Global Integrity policy, and
the purpose of this policy is that the value of integrity, to Grupo Bimbo, is essential in
the way of doing business (Grupo Bimbo, 2019). It also states that this company is
committed to doing business in a honest and ethical way, and established guidelines
for the company. The other policy that is important is the Global Environment Policy.
This policy just states that Grupo Bimbo is committed to performing good
environmental practices in the operations and production of each product and
guidelines how to do so (Grupo Bimbo, 2019). There are other policies for topics such
as global agriculture, sustainability, and health and safety.
Grupo Bimbo has not only shown what they believe in through shared values,
vision, and missions by words, but have put those words into action by creating
policies of different topics that the company feels are important not just for its
business, but for the future sustainability of the baking and snack industry. The
policies and the hard work of the business is shown by the recognition of the
Ethisphere Institute as one the world’s most ethical and admired businesses.
Nature of Study
The nature of this study will focus on the ethical practices of North American
companies (United States, Canada and Mexico). Since we are seeking to understand
the differences in ethical practices between the three countries, the concerns will be
toward what makes the companies “stand out”, good or bad, in terms of business
ethics. For the research purpose, our methodology will focus on qualitative data
research. The data will be gathered from various academic sources to include the
following topics: ethical practices in each of the three countries, CSR, government
regulations, norms/deviant behavior and environmental factors that impact how
companies handle certain ethical dilemmas.
Literature Review
In this section of the paper, there will be discussions on three different theories
that will be the base line or the underlying guides of the rest of the research and
analysis of business ethics. The review of literature was done by examining scholarly
peer-reviewed articles about the theories that firms are influenced the most by when it
comes to making decisions. These theories will help to understand and interpret the
effects of a firm that has implemented ethical or unethical practices. These three
theories are the Free Market Theory, the Stakeholder Theory, and the Social Contract
Theory.
Free-Market Theory
In the theory of free market, profit is the most important thing for enterprises.
This view assumes the same balance of power, knowledge, and complexity of choices
when purchasing and selling products and services. It means that customers have the
right to choose the products they want. If the product provided by the company is
what the customer wants, the customer will buy it. On the contrary, if the products
provided by the company do not meet the needs of customers, customers have the
right to choose not to buy it. Of course, the free market also needs some business
conditions. For example, good business ethics could enable businesses to operate
legally, and it is important to maintain fair competition in import and export markets.
In addition, all trading information needs to be open and transparent. Last but not
least, all production costs should be included in the price of a product or service.
Free markets can actually encourage ethical behavior. According to an Article
by the Association of Private Enterprise Education, the only way for a business to
make money is to sell a product or service that people enjoy and value enough to pay
for it. This leads employees to be friendly and do the right thing to try provide a
product or service that people will want and buy (APEE, 2019). This article also
says some are certain that markets themselves cannot be ethical or unethical, but it all
depends on the actions of the people in the markets (APEE, 2019).
The free market theory was chosen for the reason that even though the main
discussion is of business ethics, however one needs to understand that a business’s
main goal is to make a profit. Following ethical practices can improve trust and
increase brand effectiveness, which could gain the company more loyal customer and
make it more profit. Treating all stakeholders involved fairy is important, and taking
the extra measures to help or benefit the environment and people within that
environment is important.
Adam …
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