Free Essay On Program: Business and Customers

Business and Customers

Introduction
In business, ethics is the code of moral principles and values that guide the behaviors of different individuals within the business environment, such as managers and employees. Guidance for such action regards the right and wrong doings. Courageous, ethical behavior remains one of the essential traits of business managers today; a value strengthened by the lapse in morals and financial scandals as witnessed in some cases in the modern economy. We have, in the past, observed the degradation of corporate ethics that are clearly manifest in scandals such as financial and Health and Safety standards, corruption and bribery, moral scandals, etc. There exist a number of ethical theories that propose different approaches to ethics and morals. One such approach is utilitarianism. According to the utilitarian approach, ethical behaviors should have the effect of the greatest good for the most number of people. For instance, in a business environment, every organization has an obligation towards Corporate Social Responsibility. The implication here is that every organization’s management must make decisions and take actions that improve the society’s welfare and interests, as well as that of the organization.
Continuously flowing stories expose corruption and moral scandals at senior levels of business management and thus negatively impact on the Institutional and corporate communications. In recent years, public scandals from all over the world have regularly featured both in the media and social commentary. Such has led to the demand for transparency as demonstrated by governments, corporations, and even Non-Governmental Organizations. Owing to such campaigns that expose social and environmental malpractices in the business supply chains, many companies now adopt social and environmental causes to support their brands. Such presents an opportunity for the companies to demonstrate good ethical and moral behaviors. Integrity and responsibility produce the maximum good for the most number of people and is clearly manifest through the organization’s policies and practice of societal standards. Transparency, in this case, emerges as the outstanding consumer trend that demands a response from corporations and their brands.

Analysis of the Business Issue

One of the most famous scandals with decadent moral values was the case of Sanlu, China in 2008. According to this case, Sanlu, a dairy company in China introduced a foreign substance to the ingredients of its milk production. The ingredient, in this instance, was melamine, a substance used in plastics and fertilizers. Melamine appears to increase milk’s protein levels, an idea that falsely identifies the milk as of higher grade that results in higher prices. The 2008 Chinese milk scandal led to the death of at least six children with approximately 300,000 more taken ill (Lim, 2013). The scandal exposed a persistent regulatory problem. It showed a Chinese society disorder where profits outweigh concerns for the public good. The interpretation is that the country is in a hurry to create a market economy, but the market outshines the government regulators.
In contrast, Sanyuan, also a Chinese supply chain company conducted product tests in 2008 that confirmed its product quality. The tests led to a boost in sales. In Beijing, the company reported instances of triple sales. The need for accountability and ethical management in a business supply chain is clearly manifest in the performance of Sanlu and Sanyuan companies. Agreeably, the analysis of quality financial management and financial performance reveals a contrast between the two companies. For Sanlu, there was no accountability due to the lack of quality and financial management controls. Such weaknesses ultimately led to the destruction of Sanlu’s supply chain.
The Chinese milk scandal of 2008 is proof of how integrity and ethics can have adverse effects on a business and its brands. Companies that engage their employees in integrity and good ethical practices survive customer criticism better than those companies with weak supply chain assurance and accountability.
The implementation of ethics and compliance programs is evident in many companies, but most of them do not extend such programs to their supply chain partners globally. One such classic example of a business with flaws of ethics in its supply chain management is Tesco in UK. Tesco was on the spot for allegedly selling burgers that contained horse meat in spite of practicing food quality controls including regular audits of meat used. The scandal raised eyebrows criticism from retailers and other food companies. The horse meat scandal clearly demonstrates the challenges faced by companies as big as Tesco in monitoring and securing supply chains. Tesco shares saw a drop in sales as a result of the scandal (Butler, 2013).
It is possible for companies to ensure ethical compliance through supplier ethics management programs. Such programs help to address issues related to compliance, ethics and corporate responsibility as well as improve the supplier-purchaser relationship. It is also recommendable to maintain historical profiles, as well as conduct background checks of all parties involved. Ethics officers also come in handy to help in the monitoring the supply chain relationships.

Application of ethical theory

According to Utilitarianism approach of ethical behavior, behavior is regarded as moral when only when the overall effectiveness of one’s behavior surpasses any other behavior in a similar condition (West, 2004). In the case of Sanlu, despite there being other measures in the same condition, the overall effect of adding melamine wasn’t the greatest one. As such, the acts of Sanlu are immoral. Pleasure or agony not only applies to doers, but also to all parties affected by such behavior. The interpretations here is that the suffering of parents whose children died or were affected by the effects of melamine, and also that of the society, supersedes the pleasure of the few individuals due to profits. As such, the impact of consumer suffering as well as the chain effect of the dairy companies must be taken into consideration when analyzing Sanlu’s milk incident.
The immoral acts of Sanlu encroach on the consumer’s legal and moral rights that in the real sense are sacred as per the People’s Republic of China constitution. In terms of justice, Sanlu goes against the code of conduct since it seeks to maximize profits, but fails to ensure the care of its customers. In life, it is important to practice and display virtues in our behaviors. Sanlu acted contrary to this fact and, as such, we can define its behavior as immoral.
Utilitarianism approach to ethical behavior provides upfront ways of deciding the morally right course of action for different kinds of situations. In order to discover the right course of action, it is mandatory first to identify the various courses of action available. Determination of the foreseeable benefits and harms resultant from the actions is the next step. Finally, choosing the course of actions that produces the greatest benefits for the most number of people after considering all costs should be the last thing (Crane and Matten, 2010).

Conclusion

Integrity is part and parcel of moral considerations. The principles of morality relate to companies, their agents, and consumers. Legal and ethical frameworks provide grounds for moral considerations, but the finals decisions lie with managers as the moral agents. Therefore, moral decision-making towards developing sustainable, ethical decisions requires moral consideration. In the business case for ethics and social responsibility, this entails weighing of moral and social actions impact on financial performance (Song, 2009).
Sanlu’s behavior is a classic example of a company going against business ethics since it failed to take basic social responsibilities for consumers. Social and environmental factors, such as implicit rules and weak moral quality are the main factors attributable to the incident. There may be arguments that there is little room left for morality with fierce competition coupled with significant targets facing companies the primary goal of maximizing profits. In such a case, the company’s economy dictates the immoral behaviors thus making the conflict between profit and morality more unavoidable. Sticking to morality introduces sacrifices as opposed to unethical actions that fetch profits. Undeniably, there exists an intricate dynamic relationship between moral business and business interest.
For moral decisions to take justice into consideration, it is impossible for the utilitarian approach of ethical decision-making to be the sole guiding principle of making decisions. It does, however, have a role to play in the making of such decisions. Utilitarianism approach calls for all to consider both the immediate and the less immediate cause of actions. It sums up the benefits and harms of all parties involved and tries to woo decision-making processes based on the interest of all affected by actions rather than personal interests (Halbert and Ingulli, 2012).
In a nutshell, companies must emphasize the importance of quality assurance, in an effort to salvage consumer confidence. Their managers must also enforce accountability, transparency and ethically managed supply chains so as to achieve excellent quality control. (Word count: 1578).

References

Butler, S. (2013). Analysis: Horse meat scandal delivers supply chain lessons. Retrieved February 27, 2015, from http://www.retail-week.com/analysis-horse-meat-scandal-delivers-supply-chain-lessons/5046419.article
Crane, A., & Matten, D. (2010). Business ethics: Managing corporate citizenship and sustainability in the age of globalization (3rd ed.). Oxford: Oxford University Press.
Halbert, T., & Ingulli, E. (2012). Law & ethics in the business environment (7th ed.). Mason, OH: South-Western Cengage Learning.
Lim, V. (2013). Tainted milk: Unravelling China's melamine scandal. Retrieved February 26, 2015, from http://thinkbusiness.nus.edu/articles/item/118-tainted-milk-unravelling-china’s-melamine-scandal
Song, M. (2009). Business Ethics Reflected in Sanlu Milk Incident. International Journal of Business and Management, Vol. 4(No. 9), 117-120.
West, H. (2004). An introduction to Mill's utilitarian ethics. Cambridge, U.K.: Cambridge University Press.