Business ethics is important because it is such a critical factor in the success of a company. Business ethics is about social responsibility and how a stakeholder’s social interests can be maximized.
After watching Freeman’s explanation of his “Stakeholder Theory”[1] it is evident that in order for a business to be successful, value must be created for all stakeholders. This includes suppliers, customers, employees, communities and financiers cumulatively, not just independently.
Likewise, in the book Social Responsibility of Business is to Increase Profits[2], Milton Friedman agrees that the interest of stakeholders is the responsibility of business management. He also makes the point of saying that a business’s essential objective is to make the most profit possible, while still practising social responsibility and ethical business behaviour.
According to a 2016 New York Times article Retailers Like H&M and Walmart Fall Short of Pledges to Overseas Workers[3], in 2013 “more than 1,100 deaths exposed dangerous labour conditions in Bangladesh.” It was big corporate companies like H&M, The Gap and Walmart that were responsible for the workers who died. This is an example of not demonstrating social responsibility when there are not humane and safe labour conditions. Walmart and H&M pledged to make improvements but three years later, this New York Times article states little has been done.
Scene of a collapse factory where 1,135 production workers died [3]
According to a 2013 Business Pundit article, Walmart is part of the 10 Most Unethical Business Practices in Big Business[4]. This article states that sometimes Walmart has negatively impacted small businesses, sacred land and the treatment of employees. Although Walmart offers economical products for consumers and employment in many communities, in some cases they have had to consider the impact on the environment and the people who live there.
I have relatives that live on Vancouver Island and they became very concerned when they heard that a Walmart store was going to be built in their town. The placement of the store was to be on the Campbell River Reserve at the mouth of the Campbell River. This was of concern because oil from the store’s parking could run into the river where there are hundreds of salmon. Also the bright lights of the parking lot would expose the salmon hiding at night in deep ponds to predators. Many people in town rallied together and spoke during a local council meeting, including my cousin, to voice their concerns. Walmart heard the concerns of the people and built their store across the street. This highlights the broad range of stakeholders’ requirements that businesses need to consider.
The Walmart Supercentre in Campbell River [5] The Campbell River [6]
Business ethics is a balancing act and it’s important to try and serve the needs of society and the environment as well as have a successful business. That can be a challenging act to follow through on, but if a business can do it, it can contribute to the success of their company.
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Sources
*See Hyperlinks in addition to links below
[2] Social Responsibility of Business if to Increase Profits
[3] Retailers Like H&M and Walmart Fall Short of Pledges to Overseas Workers
[4] http://www.businesspundit.com/10-most-unethical-business-practices/6/
[6] https://www.travelwriterstales.com/bc-snorkeling.htm