Q1. What are business ethics? Give two examples of business
practices that stakeholder would regard as ethical and two that might be
considered unethical.
Business ethics refers to the sum total of
all those principles that guide the behavior of a business. They go beyond just
laws and morals of any given society. In the case of laws, those who fall
within the given jurisdiction are under an obligation to comply. Thus, the
South African operations of Anglo America must be conducted in accordance with
South African law. For instance, it is presumed that the company had to follow
the laid down procedure when it had to move people from their original villages
in order to pave way for mines. On their
part, morals are the set of rules that govern a given society. A departure from
moral rules does not attract any legal sanctions. In addition, moral principles
tend to vary from one society to the other. For instance, the giving of gifts
to business associates is morally accepted in some Eastern societies like
China. The same practice is looked upon as bribery in most Western countries. Ethics
goes beyond laws and morals in that there are some actions that are legal and
moral but are nevertheless unethical. For instance, a multinational corporation
in a developed developing country will find that child labor is a normal and legal
practice. This does not, however, make the practice ethical. Business ethics
is, therefore, an attempt to come up with uniform rules governing business
behavior irrespective of the given society.
Insisting that all raw materials are sourced
from suppliers with good working conditions for their employees is as well as
only selling goods of the right quality and quantity are examples of ethical
business practices. On the other hand, both dumping of toxic industrial waste
in third world countries with lax regulations and outsourcing production to
sweatshops are examples of unethical practices.
Q2. The benefits of ethical business behavior
affect the business itself and the wider community. Taking an example of an
Anglo American business project, identify the benefits to the local community
and to the company’s shareholders.
To the local community
·
The
local community gets to enjoy aspects of good governance as Anglo American is
committed to avoiding corruption.
·
The
local community is able to get government services since Anglo American is
committed to paying for the raw materials it takes from the locals.
·
The
local community is better off in a society where human rights are respected.
Anglo American’s support for the Universal Declaration of Human Rights (UDHR)
works towards ensuring that this is achievable.
·
The
support for government initiatives such as those against HIV Aids helps the
community to healthy.
·
Employment
opportunities arising from the prioritization of local labor in places like
Alaska’s Pebble Project boosts those economies.
To shareholders
The main goal for businesses is the maximization
of shareholder value. Ethical practices by Anglo American do this in a variety
of ways:
·
Getting
approval from the local communities helps the company avoid negative publicity
which negatively affects share values.
·
Following
through with the companies goals for sustainable development endears Anglo
American to most governments in the developing world where most mineral
deposits are currently found. This means more profits for the company and
subsequently more value for the shareholders.
Q3. How is Anglo American’s reputation enhanced
by engaging with local communities in decision-making? Why is it important for
this engagement to be an ongoing process?
For one, mining companies like Anglo American
are currently the target of pressure groups in all the countries they conduct
their operations. Some of these companies have been cast in negative light by
these pressure groups. Engaging the local communities helps enhances the
reputation of Anglo American by avoiding being cast in negative light by the
various pressure groups. For example, Anglo American has been able to avoid a
negative tag in the manner in which it handles the Pebble Project in Alaska
since it has insisted that it will only proceed if the project is shown not to
have negative impact on fisheries. Any other approach to this issue would have
cast the company as unconcerned with the plight of those Alaskans. Similarly,
engaging the local people in South Africa ensures that Anglo American is
accepted by the local people. This acceptance is very necessary in a country
where most mining companies have a very negative reputation.
Q4. Some business decisions involve a careful
balance of social, economic and environmental considerations. Evaluate how
Anglo American achieves that balance, using examples from the case study.
Economic concerns remain the main motivating
factor for any business. The business environment, however, forces companies
such as Anglo American to balance this concern as against other equally
important ones. In its drive to find more minerals at the Pebble Project in
Alaska which is an economic concern, Anglo American is working the local
community to ensure that operations only begins if fisheries in the area will
not be affected in a negative way. This is clearly illustrative of a company
trying to balance between its economic need on the one hand and the
environmental impacts that may be the consequence of meeting that economic
need. Promising to give priority to Alaskan workers at the Pebble Project also
indicates the company succeeding in incorporating social concerns in its
business decisions. This concern also comes out in the way Anglo American
complements the South African government’s initiative to eradicate Aids by
providing anti-retroviral drugs.
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