Business Ethics note for 2 assignments

Business Ethics is the study of business situations, activities, and decisions where issues of right or wrong are addressed.. It means that Right is right and wrong is wrong, no matter w

Ethics and social responsibility is an integral part of running the business However, the fact is that many businesses only concentrate on maximizing profit regardless of business ethics Today, I would like to analyze the business operation

of Vedan for the purpose of emphasizing the importance and practicality of operating business ethically First of all, we need basic understanding of what the business ethics is Business Ethics is the study of business situations, activities, and decisions where issues of right or wrong are addressed In order to identify the rightness and wrongness of particular company’s activities, we should base on ethical theories

Outcome 1.1: Explain the background and development of theoretical ethical approaches

There are many approaches of ethical theory such as: Egoism, Utilitarianism, ethics of duties, rights and justice These theories generally can be differentiated into 2 groups: non-consequentialist theories and consequentialist theories However, I just focus on 2 main approaches: Utilitarianism and Ethics of duty Categorical imperative to understand deeply the contrast between consequentialist and non-consequentialist theories

1 Utilitarianism

Utilitarianism is modified by John Stuart Mill (1806 – 1873) - a British

philosopher According to utilitarianism, the action can be judged as good or bad

on the basis of its consequences.

- An action is morally right if it results in the greatest amount of good for the greatest amount of people affected by the action It means that do the most good for the most people

- When an action affects the majority adversely, it is morally wrong

2 Categorical Imperative

Categorical imperative is developed by Immanuel Kant (1724 – 1804) - German

philosopher Kant argued that the ends do not justify the means of an action - the right thing must be done, even if doing the wrong thing would do the most good to

most people It means that Right is right and wrong is wrong, no matter what

the consequences are

Actually, Kant theory is quite similar to absolute ethics and Mill is likely a

representative of relative ethics.

Outcome 1.2: Compare and contrast absolute and relative ethics

And in order to understand clearly about this, we move to next part: compare and contrast absolute and relative ethics

Absolute ethics Relative ethics Similarities The standard to determine rightness and wrongness of action

Differences With absolute ethics, Rules

are consistent and universal.

.

While with relative ethics Judgment of right or wrong depends on different situation

For absolute ethics, A situation is always right or always wrong, whatever results or reasons.

In contrast, for relative ethics Nothing

is inherently right or wrong, ethics is just to give some advantage (social, economic,…)

Absolute ethics Apply for every situation in the same way

Whereas, with relative ethics Each situation has different way to apply (depends on culture, races, religion, ) Absolute is Objective sense In contrast, relative is Subjective sense

For example: Kill 1 patient to save the other 5 patients who are waiting for

life-saving transplants If not, all 6 patients will die.

For absolute ethics, killing is always wrong, whatever the circumstances (everyone has right to live) In contrast, for relative ethics, kill 1 patient to save 5 is the best choices for this situation (do the most good for the most people)

Development

Virtue ethics (đạo đức tốt): Moral characters

Ethical approaches based on character and integrity

The foundation of the virtuous character is the first step towards morally correct behavior

Feminist ethics (sự bình đẳng): Care for others and relationship

Feminist ethics is an approach that prioritizes empathy, harmonious and healthy social relationships, care for one another, avoidance of harm above abstract

principles

Outcome 1.3: Explain the ethical issues which can affect the operational activities of a business

Vedan Vietnam is a MSG (monosodium glutamate) plant It was established in

1991, located in Dong Nai Province

Ethical issue:

According to The Ministry of Natural Resources and Environment, Vedan Vietnam discharged 110,000cu.m (Cubic meter) of untreated wastewater directly into the Thi Vai river every month, this contributed 82.9% to the population of Thi Vai river

which caused serious impacts to both the environment (pollution in soil, air and

water of surrounding area The toxic water killed local farmers’ fish and shrimp and ruined farmland) and nearby community (water in many wells in the area is polluted seriously which directly caused the ill-effects on the local residents’

health such as skin rashes, respiratory diseases and headaches)

The reasons of dumping sewage directly into environment is that Vedan can cut

down the cost of waste-processing which requires complicated stages, specialized techniques and high cost as well.

Impacts to operations of Vedan Vietnam

Vedan has suffered some consequences

The first

1 Reaction from external stakeholders:

Vedan face a lot of complaint letters of resident about violations of environment protection laws which influence on Vietnam government’s decision about suspending Vedan’s license and impose administrative penalty against Vedan’s law infringement

The second

2 Financial damages

Vedan must pay fine and environmental fee, compensation for farmer, the cost of restoring Thi Vai River as well as decline the revenue (because Vedan operation is interrupted for a long time, and losing a lot of customers Customer can not trust Vedan as before, some market even boycotted Vedan products)

The third reduce reputation of Vedan

3 Decreasing company reputation: Reduce shareholder’s belief and customer loyalty, Company face decreasing the number of shareholder and losing customers which lead to decrease stock price and sales.

Outcome 2.1: Impacts on objectives of Vedan Vietnam Objectives of Vedan

“As a foreign-invested company in Vietnam, apart from business objectives, Vedan Vietnam also pursues the purpose of making a positive contribution to socioeconomic development of Vietnam” [ CITATION AnA13 \l 1033 ]

As analyzed above, it is easy to recognize that Vedan only focused on economic responsibilities Vedan just wants to maximize profit to satisfy shareholders and do not care about the rest of responsibilities in CSR Because of maximizing profits, Vedan did the unethical action Ethical issues lead to the objectives “operating with purposes of making a positive contribution to socioeconomic development of

Vietnam” becoming unattainable and led to some consequences which I mention above.

Outcome 2.2: Finally I move to the part the implications for a business and its stakeholder In case of Vedan, there are conflict happening between customer and

shareholder

Customer want lower prices while Shareholder wants to get more profit

Decision of Vedan: Cutting cost of waste-processing which require specialized technology and high cost

 To reduce the cost of products and gain more profit to satisfy shareholders However, By dumping wastewater directly into the river Vedan face a lot of problems and affect significantly on its stakeholders

Shareholder: are at risk of losing the amount of money invested into Vedan and harm for local resident’s health, effect seriously on their life as well as has set alarm bells ringing for Vietnam Government about the gap of controlling operation

of foreign-invested company in Vietnam

Lessons for Vedan:

- Changes wrong perspective is that running business ethically is only bring benefits for society, not for corporation and awareness about the risk of unethical business

- Realizing the link between running business ethically and increasing profit: A business operation doesn't exist in a simply way of making money It is put in a close relationship of customers, and the local community

So principles we need to remember when running business is that:

GOOD ETHICS IS GOOD BUSINESS

“NO ETHICS , NO BUSINESS ”

“ETHICAL BUSINESS IS PROFITABLE”

“ETHICAL BUSINESS GENERATESGOODWILL ”

“UNETHICAL BUSINESS LEADS TO EXPLOITATION OF CONSUMERS AND SOCIETY AT LARGE

Thank you for listening

This ethical issue have influence significantly on stakeholder of company such as Vedan affected on health of local community of surrounding area Pressure group which represents for community does not agree with this actions Therefore, They influence on Vietnam government to make decision: suspending on license of Vedan and compensate as responsibility for Vedan’s wrong actions

• Normative ethics: Process of resolving conflicts

• Postmodern ethics: Moral impulse and emotions

• Normative ethics (tính cách quy chuẩn): Process of resolving conflicts

• Normative ethics seek to provide action-guides; procedures for determining

a specific course of moral action

• Postmodern ethics: Moral impulse and emotions

• It encourages individual actors to question everyday practices and rules, and

to listen to and follow their emotions, inner convictions, and “gut feelings” about what they think is right or wrong in a particular situation

Hello everyone, I’m Snow As a chief ethics officer of Snake Oil company, I would like to present about

“Research a current ethical issue” My presentation included 5 parts Part 1 & 2 related to Apple company, 3 remaining parts are about my research company -Sumidenso Vietnam

Part 1: The role of Apple acting as moral agent

Firstly, we must understand deeply about moral agent A moral agent is” anyone capacity of making ethical

decisions and putting them into action” [ CITATION Sta14 \l 1033 ]

At the first glance, the idea of moral agent is just characteristics of humanity, not that of the company However, corporation is considered as a person in the eyes of the law A company make decisions through its people Moral considering is one of those decisions

Acting as a moral agency means the company has right to make decisions so they must have ability to understand decisions that they make and accept to take responsibility for their decision and its result

In the case of Apple Inc, Apple has full power to make decisions related to their

Decision of Apple: Apple choose China is where their production factories are placed

Apple is aware deeply of their decisions They make Iphone in China, not America because it's a combination

of not only cheaper labor but better labor, better factories and scale

According to the NY Times, Apple executives said that the company's analysts had forecast it would take as long

as nine months to find that many qualified engineers in the United States But In China, it took 15 days [ CITATION Cas12 \l 1033 ]

Moreover, Apple still accept to take responsibility to

ensure "corrective actions" are taken when know that the Foxconn Technology factory in China, where they manufactures many of their products has been criticized for ethics violations and socially irresponsible working conditions such as Workers forced to stand until their legs were swollen and they were unable to walk, although Apple is not the only company manufacturing products in Foxconn company as well as does not directly abuse labor Apple chief executive Tim Cook visited Foxconn's Chinese factories said that “We believe that workers everywhere have the right to a safe and fair work

environment, and promised regular inspections of working conditions at its biggest suppliers"

It means that Apple can be a moral agent

In part 2 the development of mechanisms for achieving employee involvement and empowerment I will answer

2 questions:

- What is employees involvement and empowerment?

- How Apple empowers its employees?

Firstly, Employees involvement is defined as “creating the environment in which people have an impact on decisions and actions that affect their job” Employees empowerment is Employee empowerment is creating a working environment where an employee is allowed to make his own decisions in specific work-related situations

The biggest difference between them is for

empowerment, employees have the right to make

decisions and they have to take responsibilities for the

risks in their decision While involvement only has right

to contribute to the decision-making process and the employer still have responsibility with the decision

These 2 concepts have a little bit difference, but have the same purposes: that is to motivate for employees with the higher satisfaction

In order to evaluate the important role of employee involvement and empowerment, I made one questionnaire with the participation of 50 respondents who are in working age

Question is “How is your assessment about the important role of employee involvement and empowerment in motivating employees’ contributions to the company?”

I accumulated the results as follows:

Very important 26 (52%)

Important 21 (42%)

So so 3 (6%)

Not important 0

From the chart here, It is easy to recognize that almost all respondents evaluate highly important of employee

involvement and empowerment to company Therefore, the company should consider this aspect in running business for contributing to its success

In the case of Apple, Apple has great orientation from CEO Steve Job He believed that employees are the real creators of value in any organization so he empowered employees to innovate and solve problems He said: “You have to be run by ideas, not hierarchy The best idea must win, not the best person with the most power or seniority” This value has helped the company to produce one ground-breaking, beautiful product after another [ CITATION Jay13 \l 1033 ]

Part 3: Current ethical issue affecting Sumidenso Vietnam

Sumidenso Vietnam Ltd is 100% subsidiary of Sumitomo Wiring Systems Japan The company is major in manufacturing electric wires and electronic devices used for electronics and automotive industry Specializing in producing used in electronics and automobiles industry It

was established in 2006 and located in Hai Duong Province [ CITATION thu11 \l 1033 ] Sumidenso Vietnam involved in juvenile labor abuse scandal in 2012

Sumidenso has 608 juvenile labors In which 426 worker had already signed labor contract with a term of 12 months 182 workers had not signed labor contract yet (still is in the training time)

The company applies the working time and rest time for juvenile labour as a normal labor (working 8 hours/day,

44 hours/week, day off for Sundays and 2 Saturdays in 1 month) Company holds for juvenile labor work overtime, work in the evening as well as underpayment of wages for labour force which against regulations [ CITATION Hai12 \l 1033 ] This ethical issue effect on reputation and finance of Sumidenso Vietnam Sumidenso Vietnam lost reputation because of acting unethical to gain short term benefit About Finance : Company Face administrative penalty from government, with Low-skilled labor (lack of experience), tired workers (working overtime) lead to