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Several businesses, such as Primary and Nestle, have been accused Of being unethical in recent years. Do you think it is essential for managers to take ethics into account consideration when making business decisions nowadays? Justify your answer with reference to Primary, Nestle and other businesses that you know. (40 marks) Business ethics refer to what is regarded as right or wrong in relation to business behavior.
I think that managers should worry about ethics as it may be important because it would give the managers a greater awareness of he effects Of a business’s actions and therefore think that managers would take greater care when making critical decisions. Another reason in caring about ethics would be because it could lead to greater benefits for the business as a whole in behaving ethically, for example they could get more customers, suppliers, and more investors.
However Primary despite the poverty workers that they use have seen a huge increase in profit with a rise by 26% in the last six months taking the profit to a huge and revenue in the period for Primary was up by 14%, to EH. 2 billion pounds. Meaning that customers still shop with them despite their unacceptable ethical behavior. These days in the UK there is a greater analysis into business behavior meaning that unethical actions are more likely to be revealed or exposed to the public giving the business a huge stigma. For example in Nestle there are huge websites about why they are unethical e. . They have been noticed in using suppliers that violate human rights. (By buying cocoa powder from suppliers that use child slaves) and destroying the environment by using palm oil from rainforest’s. But again people still buy heir produce. So overall because of these problems that nestle were caught in it would make managers more wary about bad ethical behavior. One problem with this situation would be that some managers actually behave well because they want and want the best for their business but others just may be afraid not to adopt this better behavior.
Overall there are some reasons to why managers may see that they don’t have to act ethically for their business. Starting with that for every business, it is best to behave ethically but it isn’t actually a legal requirement to do So. It also depends on hat other businesses maybe competitors are doing a certain business could copy another business so they could possibly get away with bad ethical behavior (herding behavior). Acting ethically also depends on the mangers themselves and Coo’s and their own values and honesty.
It could be that they would receive pressure from stakeholders or investors to change the way they behave or they could pull out and away from the business leaving the business in a bad situation or changing the way the business runs. However it could help the business for these bad situations or consequences to happen cause that could be the encouragement to act ethically. I think it is good for a business to act ethically because it gives the business higher revenues.
It also gives the business an improved brand and the business awareness and recognition is maximizes, the business will receive better employee motivation and recruitment as people will want to work for them, and a main advantage would be is they can find new sources of finance for example from ethical investors. However if they don’t act ethically businesses would receive higher costs for example when they have to source their products or service room Fairytale suppliers rather than lowest price.