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Ethical Behavior Lester M. Legette Trident University International

ETH501- Business Ethics Dr. Bonnie Lee Adams November 28, 2011

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Ethical business behaviors are moral principles that guide the way a business behaves its a set of unwritten rules that govern the core values and standards that companies should live by. ( " P r o v i d i n g c o n s u m e r s w i t h , ) Ethical business behaviors are taking into consideration the environment, and having a social responsibility for your employees safety, health, and well being. Ethical business behavior means doing the right thing regardless of what the competition is doing, or no matter the cost. In this case study we have two companies that that are practicing good Ethical business behaviors by doing the right thing. These two companies have taken into consideration the environment and their social responsibility to the communities in which they have operations. Both companies realize the importance of yielding profitable returns, but still understand that they must not compromise their integrity or moral standings by allowing unethical behavior to take place within their organization. PRIMARK Primark is a textile manufacturing company that operates abroad. Primark has made it a point to make their companys ethical behavior transparent. Primark has found that transparency makes it easy for outsiders to see the ethical climate of the company. This in return reassures Shareholders, strengthens the brands reputation, and ensures that consumers continue to purchase their products. ( " P r o v i d i n g c o n s u m e r s w i t h , ) Primark is committed to doing the right thing. They have even gone so far as to publish a Code of Conduct that has been translated into many different languages. The Code of conduct can be found on the companys website; it outlines the companys policy, and also states the legal terms and conditions. The code of conduct is 11 points that covers everything from

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employment to child labor; it also covers legal requirements and points out that Primark is committed to compliance of all countries laws. ( " P r o v i d i n g c o n s u m e r s w i t h , ) Primark also has measures in place to ensure that they only work with suppliers that have the same ethical beliefs. They screen suppliers and provide training to alleviate any doubt of their ethical expectations. The training provides guidance on issues such as child labor, home working, and immigration. When Primark decides to hire new suppliers and factories they put them through a selection process, which allows Primark to hire suppliers that compliment their Ethical beliefs. All suppliers of Primark are subject to independent audits and follow-up visits to make sure suppliers are maintain a good social ethical climate. ( " P r o v i d i n g c o n s u m e r s with,) The cost of ethical behavior Although Primark believes in providing the best possible value for their customers, they dont think that it should be at the expense of the people who make the products. Practicing good ethical behavior has its own price tag, especially when you compare it to companies like Mattel who abandoned their ethical practices, because other companies in the industries were not being held to the same rules. Primark saw it as their duty to behave ethically no matter the outcome or the cost. The company incurred extra cost to facilitate their ethical program by training its buyers on all ethical trade issues, managing, and paying for external audits, and the employment of the global Ethical Trade team. ( " P r o v i d i n g c o n s u m e r s w i t h , ) Although these activities have their own price tag, Primark does not see these activities as cost. The Company believes that they enabled them to operate in a sustainable and wellmanaged way. Primark believes that although they incur cost they will benefit in the long run

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from having all of the organization, and suppliers on the same page complying with the Code of conduct. ( " P r o v i d i n g c o n s u m e r s w i t h , ) ANGLO AMERICAN Anglo American is one of the worlds leading mining companies that also operate abroad. Anglo American ethical behavior is slightly different than that of Primark. Where Primarks mainly focuses on the health and welfare of their workers, Anglo focuses more on the environment and ways not to damage the communities in which they operate. While most business has a Code of conduct that govern their core values, Anglo refers to theirs as Good Citizenship. ( B u s i n e s s e t h i c s a n d , ) Anglo realizes that they still need to make a profit and while Anglos shareholders remain a top priority, they dont feel that their profit should come at the expense of the social, environmental, and moral considerations. Anglo feels that the only way they can be successful is if they take into consideration the needs of others such as their stakeholders, employees, suppliers, communities and customers. ( B u s i n e s s e t h i c s a n d , ) Anglo American has put measures in place to assist managers in measuring what impact their mining will have on the company and the communities. The Socio-Economic Assessment Toolbox (SEAT) assists the company in improving on water and electricity infrastructure. Due to habitation, sometimes there are important mineral deposits that cannot be accessed. Anglo American recognizes these areas and makes necessary arrangements to make sure the communities are well compensated. The new communities are built with better houses and infrastructure and more land for farming. These actions are totally voluntary and took place only

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after provincial government and local tribal leadership reached an agreement. ( B u s i n e s s ethics and,) The cost of ethical behavior There are many ways of incurring cost; Anglo American has found out first hand that the effects of acting ethically are not cheap. In fact when all things add up it gets pretty expensive, but the cost of doing the right thing is priceless. From resettling communities, to mining in ways that conserve the environment is not a cheap task, but Anglo is more than willing to cover the cost. Anglo American is also very conservative company. Anglo had an opportunity to set up shop and cash in at a time when normal revenues were at a steady decline. The community was concerned that mining would hurt the local fish stock and wildlife. Anglo made it clear that they would only proceed if they could be sure that they would not damage the local fisheries. They also made it a point to recruit employment from the local population. The cost of acting ethically is very expensive, and can even cause businesses to lose money. What was so spectacular about Anglo is that they didnt let those reasons make them act unethically. ( " P r o v i d i n g consumers with,) The benefits of ethical behavior Anglo American has many rewards from acting ethically and having a social responsibility in the community. The company has realized that by demonstrating a more caring and sustainable approach it has giving them their identity. Their willingness to do the right thing for the environment, communities, and their employees, has set them apart from their competition and made them the company of choice in most communities. There Ethical

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character has also made them a favorite amongst investors, and gave them good standings in the stock market. Many people believe that its important for a company to consider the social and ethical issues and not just how much money they can make. ( " P r o v i d i n g c o n s u m e r s with,) Anglo American understands that the local Law in the starting point for any business. They realize that in order to be in good standing with their ethical beliefs they must obey the local law at all times, even if the laws are not being enforced. Although Anglo receives it profit from taking from the earth they make it a point to give back to the community. The company is responsible for providing AIDS testing for communities, and provisions for new schools and communities. The company socio-economic assessment toolbox plays a major part in encouraging local business development, and creating partnerships with local farmers. ("Providing consumers with,) Competition For this part of the case study I chose Competition. I chose competition because it applies to both Primark and Anglo American. Both of these companies chose to do the right thing for their employees and for the environment no matter the outcome. These companies benefitted in many ways from showing good ethics, and being socially responsible. The most noticeable way was how they set themselves apart from the competition. Primark was able to build confidence in the brand which in return grew the reputation of the business. They were also able to reduce the risk to the business by reducing the poor publicity about ethical issues. (Svensson & Wood, 2007)

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Anglo was able to set themselves apart from the competition by demonstration a more caring and sustainable approach. They gained a competitive advantage by caring more about the environment and the communities than their paycheck. Anglo realized early on that they needed to provide strong returns for their shareholders, but not at the expense of social, environmental, and moral considerations. By taking the hard right over the easy wrong, they set themselves apart and made themselves more likely to be the partner of choice for many governments and communities in the developing world. ( S v e n s s o n & W o o d , 2 0 0 7 ) Three Normative Ethics In this case study, we recognize all three Ethical Characteristic previously studied. Both companies use the Utilitarianism approach, because they live by the fact that in order to do the right thing they must focus on the consequences that actions or policies have on the well-being of all persons directly or indirectly affected by the action or policy. (Valasquez, 2010 ). They do this by ensuring that their actions are in the best interest for all parties concerned. Primark ensures that working conditions are safe and hygenic for all, that the work place is free from any and all child labor. They also ensure that living wages are paid, and that work hours are not excessive. Anglo ensures that whatever community they operate in they leave it better than they found it. They make sure that they take into consideration the local enviroment, wildlife, and communites, before they consider how much money is in the bank. Both companies displayed characteristics of Deontological ethics because they made it their duty to do the right thing by their employees their shareholders, the enviroment, and their communities. When operating abroad it is easy to get caught up in the act of not doing the right thing, because many times other countries dont have the same laws and guidelines as

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Americans. As Americans it is our duty to do the right thing by all of mankind. I think that we should be held to a higher standard than the rest of the world. I believe this because our country is based of freedom and the American way of life. In this case study we also see the each company have Virtues that made them as successful as they are today. Both companies displayed compassion, by ensuring that employees needs were taking care of, by not mining from fear of hurting the wildlife, and fishing spot. They also showed compassion when they resettled the community, and made provisions for clinics and small businesses. The companies showed integrity by making their businesses transparent so that outside agency could do audits and report exactly what was going on. Anglo showed integrity when they had the opportunity to mine, when the normal resources were declining, but instead they chose to do the honest thing and wait until they could be certain that mining would not hurt the environment. Unlike Mattel, both companies showed fortitude to do the right thing no matter what their counterparts were doing. Even though both companies were operating abroad and they probably could have saved money by cutting corners they chose to do the right thing no matter the cost. Prudence better known as wisdom was displayed by both companies. By doing the right thing no matter the cost made them a favorite amongst investors, and gave them stability in the stock market. Conclusion

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Having displayed a vast knowledge of the information presented above, there are two businesses Primark/Anglo American that are leading the way in Ethical Behavior. These two businesses show us that behaving ethically and having a social responsibility can be more rewarding, and more profitable, than taking shortcuts and selling your ethical soul just to turn profit. Although both of these businesses incurred additional cost by doing the right thing, they were rewarded by Governments, and investors wanting to partner with them, and gaining stability in the stock market. These companies showed us that no matter how far we go away from home that we should always carry the manners that our ancestors instilled in us, and in the end the good will always outweigh the bad.

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References: (n.d.). Business ethics and corporate social responsibility. The Times 100, Retrieved from www.angloamerican.co.uk (n.d.). Providing consumers with ethically sourced garments. The Times 100, Retrieved from www.primark.co.uk Svensson, G., & Wood, G. (2007). A model of business ethics. Journal of Business Ethics, 303-322. Valasquez, M., Andre, C., Shanks, T., J, S., & M, M. (2010). Ethical perspectives. Retrieved from www.scu.edu