Unit 14Business Ethics

Aim and purpose

• The aim of this unit is to enable you to understand the idea of business ethics and its meaning in today’s business world.

• Businesses must operate within the legal framework set up by the government. The law sets guidelines and minimum standards that must be reached.

• As well as this legal responsibility, businesses are increasingly aware of their social responsibility. This often takes the form of a public declaration on values and ethics, and can often be found on corporate websites.

• One aspect of this is to customers stating that the business will operate ethically.

• Ethical values guide ideas of acceptable and desirable behaviour above and beyond compliance with laws and regulations.

• Ethical values are those such as respect, honesty, openness and responsibility; whereas business values often focus on efficiency, service, quality, growth and profit.

• In this unit learners will select and discuss a current ethical issue relating to a selected business, and then consider an ethical policy for that business.

Legal Responsibilities

• Businesses have legal responsibilities to their consumers, suppliers and employees– Consumers

• Consumer protection – rights to good products, rights to return, rights to complain etc

– Suppliers• Contract law – correct goods/services etc

– Employees• Rights - Health and safety, working conditions

What are business values?• Business values are the core principles or standards that

guide the way you do business. They sum up what your business stands for and what makes it special. While business plans and strategies may change the core values of your business remain the same.

• For example - some businesses say that innovation is one of their core values - they are constantly developing new products or services and this shapes their whole approach to business.

• Other businesses may say that they are agile - they are constantly responding to change and creating new opportunities for customers.

Ethical Values

• Businesses have a certain responsibility to ensure they conduct their business in a way that does not offend;

• Other aspects they need to consider are:– Honesty– Openness– Transparency– Respect– Fairness

Business Values

• In order for a business to be successful, the following aspects need to be considered:– Efficiency– Service quality– Growth– Profit

• If any of the above are not right, the business will suffer

Lets look at a well known establishment

So, what do you really think about Tesco’s

What do you know about the supermarket known as Tesco

• How many stores are currently in Leicester?

• Can you name some of the departments that are in operation within Tesco?

• How many staff do they employ?• What staff benefits do you think are

generally available

What does society think?

• Mixed views maybe...

• Take a look at the clips that follow and then discuss the attached fact sheet

Some adverts about TescoChristmas Advert• http://www.bing.com/videos/search?q=every+little+hel

ps%2c+tesco+advert&view=detail&mid=C612881F1832E2BF36C3C612881F1832E2BF36C3&first=0

Friends of the earth...• http://www.bing.com/videos/search?q=every+little+hel

ps%2c+tesco+advert&view=detail&mid=C612881F1832E2BF36C3C612881F1832E2BF36C3&first=0

New Premises• http://www.bing.com/videos/search?q=every+little+hel

ps%2c+tesco+advert&view=detail&mid=C612881F1832E2BF36C3C612881F1832E2BF36C3&first=0

Enthusiastic workforce• http://www.bing.com/videos/search?q=Tesco+Careers

&view=detail&mid=54C0E0C76541B18AE5AC54C0E0C76541B18AE5AC&first=0

Legal Requirements

• Can you list and describe 3 legal requirements that it would be necessary for Tesco to follow?

Ethical Requirements

• Can you think of any ethical decisions/actions that Tesco has implemented?

This is one of their ethical policies...• No quibble refund• Unhappy with something? We'll give you a

refund with no quibble. As long as you've not had a nibble.

• If you're trying online shopping for the first time or maybe you've just ordered items you no longer need, don't worry. Just hand back any unwanted items to your driver when your shopping is delivered and they'll make sure that you get a full refund.

Tesco sourcing standards

• Tesco are founder members of Ethical Trading Initiative(ETI). The Ethical Trading Initiative(ETI) is a ground-breaking alliance of companies, trade unions and voluntary organisations. The Ethical partnership is there to improve the lives of workers across the globe who make or grow consumer goods - everything from tea to T-shirts, from flowers to footballs.

• THE ETI BASE CODE• As a founder member of the Ethical Trading Initiative(ETI), we expect all our

suppliers to meet the standards set out under the ETI Base Code and guarantee their workers the rights within it:– Employment is freely chosen – Freedom of association and the right to collective bargaining are respected – Working conditions are safe and hygienic – Child labour shall not be used – Living wages are paid – Working hours are not excessive – No discrimination is practised – Regular employment is provided – No harsh or inhumane treatment is allowed

Criticisms of Tesco• This article concerns criticism of Tesco, a

supermarket chain in the United Kingdom. Criticism has been directed at Tesco from various groups, both national organisations and individuals.

• One of the biggest criticisms it faces is the perceived threat it poses to small businesses due to the monopoly it imposes over products. There is also a belief that they use aggressive tactics to gain land and/or planning permission for building new stores. Other controversial areas concern the treatment of staff and customers, as well as their approach to foreign businesses

What do you think?

Do some research...– Using your mobile phone or other suitable

device• Find out about the good and not so good news

reports about Tesco.

• We will discuss this in class...

Assignment 1Aim and overview The aim of assignment 1 is to enable learners to understand

differences between businesses values and their ethical values. To do this you will research and prepare evidence that shows your understanding of these in a real life business situation.

Scenario You are working for an organisation (of your choice)

within their corporate services department. You have been asked to help put together some information in an innovative and exciting way for new employees to introduce them to the department and your companies’ ethics policy.

Assignment 1

• Task 1 (P1), (P2) – Essay/Report under exam conditions.

• You must complete a brief essay describing your companies 1. Ethics and 2. Their values.

• Explain the differences between Ethics and Values.

  

Assignment 1

Task 2 (P3) – Prepare a presentation • You must then explain why ethics are

important to the organisation and how the organisation strives to do more than meet their legal obligations.

P3Describe how ethics go beyond the requirements of the law

• Research details about Tesco’s – find and describe their aims and objectives• Type of organisation and structure• Give basic details

– Types of stores– location– Types of goods sold and other services (club cards, Tesco on-line, delivery etc,)– Advertising

• State why you feel they are successful and who enjoys this• Who would they have a negative effect and why• Give an indication of their ethical principals (at least 3)• Research to find at least 2 points that disprove their ethical claims• Give examples of legal obligations Tesco’s would have to uphold

– Employees– customers

• You must then explain why ethics are important to the organisation and how the organisation strives to do more than meet their legal obligations