Monthly Archives: September 2015

Dinner is served

Bringing the topic of business ethics to life, I brought the Nestle debate to my father; however, little to my surprise, my father argued that Nestle is conducting an ethical business.  From his perspective, he claims that “that’s the nature of business” – a company’s goal is to retrieve their inputs at the lowest possible costs to maximize their profit while abiding by all rules and regulations.  As we discussed the issue, I reasoned that Nestle is acting unethically by abusing the community and not paying for the resources it’s removing; however, he states that water is a renewable resource and therefore, it is perfectly ethical for the company to withdraw an unregulated amount of water at no cost.  What got me thinking was when he compared the question of ethics surrounding Nestle to “scalpers” (people who swiftly resell tickets).  Is it ethical for someone to buy an event ticket with the intention of reselling it at a higher price?  Initially, I saw no connection and found that scalpers are completely ethical because they are still paying a reasonable price for the ticket and that they make a living by reselling the tickets at a higher price; however, after further discussion, I realized there are many similarities between the two cases.  The ethics surrounding a scalper is smaller in scale; however, the same question arises… “Is it ethical for a business to buy its input items (tickets) at a significantly lower price than its resale price (without adding value to the original input)?”  As long as all employees, animals and communities are responsibly treated, does the company’s profit relate to business ethics?  Should there be a limit on the percentage of profit a company can gain from their product?

Bringing the business ethics debate to the dinner table

Bringing the business ethics debate to the dinner table

Cartoon courtesy of: ClipArtHut 

Business Ethics vs Social Responsibility

Growing up as a student in “Beautiful British Columbia”, the ever-growing issue of climate change and pollution lies at the top of my mind.  In support of Milton Friedman’s definition of social responsibility, I strongly believe that every person, every company and every country has an ethical responsibility to protect the environment.  What are ethics?  Ethics are a set of rules based off of one’s morals.  After experiencing a particularly dry summer, the scarcity of fresh water was illuminated and I believe that Nestlé Waters Canada is not satisfying its ethical responsibility to provide value to the community, nor is it following its social responsibility of protecting the environment.

Freshwater is a "precious natural resource"

Freshwater is a “precious natural resource”

Legally, Nestlé Waters Canada’s withdrawal of hundreds of millions of litres of water is not violating any rules and regulations; however, morally, is it ethical for Nestlé to be withdrawing a community’s precious natural resource at no cost to sell back for profit?  As Friedman argues, the social responsibility of a company is to “increase profits”; therefore, Nestlé is fulfilling its ethical responsibility while not violating its business ethics; however, if Freeman’s Stakeholder Theory holds true, Nestlé is violating its social responsibility by not providing value to its customers (making profit off of something it received for free) or the community (withdrawing without compensation).  The main question is: is Nestlé Waters Canada ethically responsible to pay for the natural resource it is withdrawing from the community?

Business ethics: increase profits while not violating any rules and regulations (Friedman)

Social responsibility (of a corporate executive): provide employment, eliminate discrimination and avoid pollution (Friedman)

Referred article: http://www.theglobeandmail.com/news/british-columbia/water-is-a-precious-commodity-but-bc-is-just-giving-it-away/article25422194/

Further reading: http://www.timescolonist.com/news/local/wild-west-of-groundwater-billion-dollar-nestl%C3%A9-extracting-b-c-s-drinking-water-for-free-1.587568