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BBMM 501 Business Society and Ethics Assignment
The businesses are success only when they play it with integrity. The assignment is about the business ethics. How the CSR initiatives give the company the competitive edge. Businesses’ are trying hard to get the positive word-of-mouth and this can be achieved through the fair practices, but there are few cases where even the bigger companies exploited its employees and this is the reason that they have caught in the scam. In this business society and ethics assignment we are going to focus on one such scam which is known as 7-Eleven scams. This is a scam where the company 7-Eleven caught while underpaying its employees and this is how it got defamed. Now let us discuss the case and all the issues related to it.
1. Present the Case Study. Identify and a
Analyse the issues and the implications.
The Australia’s biggest store chain 7-Eleven is owned by billionaire businessman Russell Withers. 7-Eleven is a world renowned company but apparently not as much ethical as it should be. There has been a scam in the company which was found out after the investigation done by Fairfax Media/Four Corners and Business Day. After the investigation it was found out that the employees of the company are being exploited. The employees have to work for more than 16 hours and still they are getting paid half of their minimum wages and because of this reason the scam is known as ‘half-pay’ scam. During the investigation the horrible story of Pendem an Indian student came into light.The key issues in the scam were:
- Pendemis an Indian student who went to Australia in 2011 with three degrees and joined the company 7-11. In the company hehad to work for as long as 16 hours per day but he is not getting paid as much as he should.
- He was also robbed and not only once but twice in his duration of job. The pathetic thing is that when he reported about the robbery rather than taking the corrective actions his boss scolded on him for not fighting back to the robbers. They also blamed him for letting the robbers take money that easily, according to them if he’d fight back robbers could not take the money.
- Pandem had to do the two jobs, out of which one included watching the petrol pumps. If someone used to just drive away without paying the money for petrol Pendem was the one compensate for this.
- In his second job he had to serve the customers and this made him breach the conditions of his visa because he had to stay longer in organization (which is against the rules).
- The company took advantage of this breach of conditions and threatened Pendem that if he will lodge any complaint about the company they are going to make his visa cancelled.
- Despite of his hard work Pendem was getting as lower as $10 at one store and $14 at another store.
- The company was also faking the employees by just showing the names of their relatives as the employees of the company and in reality those people were not associated to the company in any form.
- There came a day when Pendem felt that he no longer can take this and he returned to India for three months.
- Pendem now recalled everything and says that it really was a nightmare working for 7-Eleven. He even feels embarrass for not knowing the minimum wage rates in Australia.
This had a direct impact on the company’s reputation. The word about the scam spread like the fire in the jungle. This is the reason that the company got defamed.
- After the scam was found out the company has lost the positive word-of-mouth that it earlier had.
- The employees also are quite sceptical about the company’s vision and mission.
- The rate of new joiners has also decreased.
- The company got a real bad image and got famous by the tag line ‘The reality is it’s built on something not much different from slavery.”
- The reality of the company was thus revealed which by the way was quite horrible. (Ferguson, Danckert and Toft, 2015).
See BBMM501 Business Society and Ethics Assignment brief here:
2. Discuss the issues in your case study in the context of Ethics studied this semester.
Milton Friedman’s doctrine on the goal of a firm
An article was published by Milton Friedman in 1970 in the New York Times Magazine. This is still a famous article as it concentrates more on the business realities rather than ideologies. The main highlights of the article are:
- The main consideration of Milton Friedman was that the business should be more focus on increasing their profitability. (Denning, 2013). Rather than wasting their times on unimportant efforts of being social conscience they should focus on the money. (Friedman, 1970)
- Milton Friedman suggested that the most important responsibility of the corporate executives is towards their employees and stakeholders.
- Milton suggested that the firm should comply with the basic rules and regulations of the society but the most important thing for it should be to ensure the well-being of its employees and all the shareholders. (Kristin, 2012).
- The 7-Eleven is not even applying this theory given by Milton Friedman as the company is not giving any fair wages to its employees and on the top of that it is taking twice as much work from them in half pay.
Basically there are five ethical theories propounded by famous authors. These five theories are:
- The Theory of Egoism.
- The Theory of Utilitarianism.
- Care Ethics.
- Virtue Ethics.
- The Theory of Egoism: This theory states that what makes something right or wrong is the desire or need of that person. If the person realises that what he is doing making him feel satisfied than he should do it.
- The Theory of Utilitarianism:This theory is based on the happiness of majority of people. According to this theory what is considered ethical is which have a positive impact on the larger numbers of people. If there is any negative impact of something than this should be on lowest number of people.
- Deontology: This theory is based on the proposition that the ethical thing is when one fulfils his duties. These duties are towards self as well as others.
- Care Ethics: According to this theory ethics is about caring about other people. The basic principle is that the care should be taken of those people who are vulnerable.
- Virtue Ethics: According to this theory the ethical practices are doing the right things and these things should be culturally acknowledged good or bad. (Sadler, 2011)
Triple Bottom Line
The Triple Bottom Line is an accounting framework. According to this framework there are three dimensions of calculating the performance of a firm. These dimensions are:
Financial, Environmental and Social:
The company’s financial performance can be measured as the income and expenditures of the company. The environmental measures are related to the use of the natural resources of the company. The social measures are related to the social issues like well-being of the society and equality etc. (Slaper and Hall, 2015)
CSR narrow view and broad view
The views on Corporate Social Responsibility (which is also known as CSR) can be categorised as narrow and broad.
- Narrow View of Corporate Social Responsibility: According to this view the sole aim of the business is to maximise its profit.
- Broad View of Corporate Social Responsibility:This view perceives the CSR as the much broader approach. According to this approach the business are not only must be focused on the profit maximization but also it should be responsible towards the society and community.
However after studying the case study of 7-Eleven it can be seen that the company applied a lot narrower approach of CSR(Dudovskiy, 2013).
- Abuse of Power: The abuse of power is related to the power of a company where it can utilize its employees and thus can misuse its power (Safari Books, 2015).
- Morality: Morality is about the right or wrong conduct. The main characteristic of morality is that this right or wrong is not universal rather it is dependent on the personality of the individual and thus it can vary. However at 7-Eleven company the corporate executives did not seem to apply the moral practices (Psychology Today, 2015).
- Social Media: The impact of social media on any business is very great. Thus the companies have to decide and manage its social media with utmost care(News Room, 2015).
- The Whistle-blower: The whistle blow is the condition when something is going wrong in the organization and unethical practices are taking place. This whistle blower can be anyone the corporate executive, the employee, the stakeholder or any insider of the firm (Barnett, 1992).
- Loyalty: The ethical firms are those which are loyal to its employees, customers and stakeholders(Phillips, 2015).
- Role of bribery: The role of bribery is that it corrupts the people who are taking it and who kept silent after witnessing it. It is like a termite to the success of the business. The companies thus must set high standards against the corruption to deal with this problem (Kemp, 2014).
3. Discuss the legal and social framework? What implications/remedies are available?
The legal and social framework is also known as Fair Work Ombudsman. As per Australia’s Fair Work Ombudsman the rules and regulations which manage the companies in Australia are:
Fair Work Act 2009 and the Fair Work Regulations Act 2009: According to this act all the employees working in a company are entitled to get the minimum salary. If the company fails to do so the government of Australia may take actions against such company.
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009: An amendment has been made in the Act. Now according to this act the state can take the matters to the federal government of Australia.
Freedom of Information Act 1992:
This act gives the public the basic right to access the documents of the Australian Government and its agencies (Australian Government, 2015).
- The only remedies which are available are to abide by the rules and regulations of the government.
- The company must take care of its employees and stakeholders. The exploitation must be stopped with immediate effect.
- The employees must get the wages according to the minimum wages act 2009.
4. What steps would need to be put in place to:
- combat and minimise the risk of future unethical or immoral practices
- enhance its reputation, corporate governance and or CSR systems
The steps which could be taken to combat this problem are:
- Create the Right Policies: The companies must create the right policies regarding everything. The first step that the company should take is to abide by the rules and regulations of the government. The policies must be fair and in compliance to the law of the country.
- Put Controls in the Company:The executivesshould develop the policies which can put the control on the employees of the company. This control helps in preventing the unethical practices at workplace.
- Build the Culture of Transparency: The culture of the company should invite the transparency and openness. This also must develop the right level of communication as the communication gap can be very harmful for the company(Douglas, 2012).
- Reinforce Consequences: Strict actions must be taken against those who are applying any type of unethical practices at the workplace. If these consequences would not be reinforced there is a great possibility that the corruption would be increased(Brookins, 2015)
- Choose the Right Vision: The companies are led by the leaders and right leaders must choose what is right for the society and all the concerned people.
The assignment focused on the business ethics and how this is the most important factor for the companies.The research has been done on a company 7-Eleven. There has been exploitation of the employees as they were not getting the minimum wages that they are entitled to. The assignment gave me insights about the rules and regulations of the government to secure the interests of the employees. The remedies to these problems were also discussed in details in the assignment. Overall the assignment helped in understanding the whole concept of the business ethics and society and the implications of these ethics on the business.
- Australian Government, (2015), Fair Work OMBUDSMAN, [Government Website], Available: http://www.fairwork.gov.au/about-us/legislation [Accessed 05 September 2015]
- Barnett, T., (1992), Why Your Company Should Have a Whistle-Blowing Policy, [Online], Available: http://ethics.csc.ncsu.edu/old/12_00/basics/whistle/rst/wstlblo_policy.html [Accessed 04 September 2015]
- Brookins, M., (2015), Ways to Prevent Unethical Behaviour in the Workplace, [Article], Available: http://smallbusiness.chron.com/ways-prevent-unethical-behavior-workplace-21344.html [Accessed 09 September 2015]
- Denning, S., (2013), The Origin of ‘The World’s Dumbest Idea’: Milton Friedman, [Article], Available: http://www.forbes.com/sites/stevedenning/2013/06/26/the-origin-of-the-worlds-dumbest-idea-milton-friedman/ [Accessed 11 September 2015]
- Douglas, E., (2012), 7 Practices to Prevent Unethical Behaviour, [Online], Available: http://blogs.edweek.org/topschooljobs/k-12_talent_manager/2012/10/7_practices_to_prevent_unethical_behavior.html [Accessed 10 September 2015]
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