BTEC National Business

BTEC National Business案例分析

BTEC National Business

Unit 37 Business ethics 
Assignment 1
Ethics and Stakeholders
Task 1 Report
To:
From:
Date:
Subject: Ethical concerns faced by Primark

Introduction about Primark
Primark is an Irish clothing retailer with 278 stores and 51250 employees. It grow from Ireland to other countries in Europe and will soon have stores in the Americas. It is a subsidiary of the international food, ingredient, and retail group called Associated British Foods. It mainly sells fashionable women’s clothing in the middle end market.

Primark values
Primark puts a lot of emphasis on ethics such as environmental control by using the right chemical in their clothing as to not damage the environment. Primark also values charity due to the fact that they have supported the victims of the Rana Plaza building. Women’s health is also an important aspect in Primark’s culture as they have supported women’s health for many years. Last, but not least, they check every factory to make sure the quality of their product is the best.

Key business terms

Business ethics：business should operate without violating any ethical issues, without harming any other aspects in the society.
Professional ethics and individual ethical behaviour: each employee working in a firm or related with the firm should behave ethically.
Corporate governance ：the firm should have a board that regulates the basic operations。
Corporate social responsibility: the firm should keep their responsibility in the society in mind when operating. They should not do something that could potentially harm the society’s wellbeing.


Ethical issues faced by Primark

Environment: the firm should make sure that nothing they produce consists of materials that are detrimental to the environment. 
Sustainability: the firm should produce clothing using sustainable energy sources and recycle and reuse if possible.
Human rights: the firm should hire people of all backgrounds regardless of their race, sexual orientation, nationality and religious beliefs.
Corruption: the firm should prevent from corruption, especially in the management. It is to the managers’ incentives to corruption and grab as much money as possible for themselves, but they should not do that since it is unethical.
Trading fairly: insiders should be prohibited from trading their own shares in the stock market because as they have better information, they can use the information to make more money.
Legal and regulatory compliance: the firm should comply with all the rules and laws in the society, without breaking any of them. 
Business practices: the firm should operate and do things in an ethical manner when dealing with ordinary business issues.
Working conditions: the firm should provide the most comfortable working condition possible without interrupting the orders in the society.
Individual ethical responsibilities: all the employees in the corporation should do things ethically, without violating moral issues.


 
Task 2 Stakeholders of Morrisons

Who the key stakeholders are of Morrisons

Owners: the owners of Morrisons is mostly interested in generating the most profit for the firm and maximizing the firm value so that their stakes in the firm could be worth more.
Employees: the employees care most about their income, their working environment, and the easiness of their work while at Morrisons because after all, they would be spending most of their times awake at Morrisons.
Customers: the customers care most about the price of the communities that Morrisons sales and the quality of the products. They also may care about the environment and the service level of the employees, and the location of the stores.
Suppliers: the suppliers care more about the price that Morrisons buys their product and the credit of Morrisons. For example, if they promise to do a deal with the suppliers, they need to keep their promise.
Competitors: the competitors care about the quality, price, and location about Morrisons, and basically everything that the customers care because the competitors wants to attract more customers to themselves. So they will think in the customers’ shoes and try to improve their own business. They also care about everything that the suppliers care about because that is also essential in keeping the cost of their business.
Citizens: the citizens care more about the positive and negative economic externalities that Morrisons bring to their lives, such as whether they will be damaging the environment, producing more traffic, or more noise to the living area. Those who study economics well might also care about how much increase in GDP that Morrisons can bring to the country.

Ways the company operates ethically which have an impact on the business and stakeholders
The first policy is that they do not use any products made by the suppliers using forced labor. The benefit is that the customers would have a good impression on them and believes that they respect the labor. The drawback is that they may have fewer choices of suppliers.
The second policy is that they allow the employees to talk freely about poor working conditions. The good aspect is that the firm will improve upon hearings complains while the drawback is that people may not want to apply to work there anymore.
The third policy is even thought they want to sell as much products as possible, they acknowledge that drinking alcohol is bad for health. The positive side is that people will know this fact and watch out, but the bad effect is that they might sell less products.

Conflicts of interest between stakeholders
Conflict of interest exists among the stakeholders. For example, the customers of course want to buy cheaper products given the same quality. When it comes to food, they want to buy newly produced ones, but the employees want to sell the ones produced earlier so that the inventory is not going to be filled with outdated food. This creates a conflict of interest. The employees usually place the old foods at places where it is easier to reach for the customers.

Ways to improve ethical behaviour
For example, they can still have the employees talk about unsatisfactory working conditions, but hey may also state in the employment contract that they should never harm the firm’s reputation outside. This way the company’s reputation can be preserved.


(un) ethical behaviour Affected stakeholders How they’re affected (positive or negative and why) Costs to business (D1) Benefits to business (D1) Long term impact on business and stakeholders (D1)
do not use any products made by the suppliers using forced labor suppliers Negatively affected because some suppliers will not be able to do deals with Morrisons Loss of deals with some unqualified suppliers Build good impression and reputation Suppliers will learn to not to use forced labor
allow the employees to talk freely about poor working conditions employees Positively affected because they have freedom of speech now The boss might be agitated with too much complains and be overwhelmed with work Reputation will be good. Will be able to attract more people to this job General working condition will be improved.
they acknowledge that drinking alcohol is bad for health customers Positively affected because it’s good for their health Loss of sales for alcohol Reputation will be good. General health in the nation won’t go bad

Evaluation
Owners Citizens Suppliers Customers
Recycling policy Better reputation for the firm, hopefully that means more profit Having an environmental-friendly firm in the city is a positive thing More business with Morrisons since they are environmental-friendly I’m doing something useful for the society when using recycled stuff
Sale of alcohol More revenue can be generated with the sale of new products Hopefully no more drunken people on the streets will be created More suppliers will be doing business with Morrisons More variety of products to buy from
Packaging policy Lowers the cost and increases the profit for the firm The products on the street may look better Better packaging make our products look better Easier to carry or looks prettier packaging
GM foods More competition will attract away some of our customers, yet it pushes us to do better to win them back More variety of shops in the city Needs to shift more attention to GM, rather than focusing on Morrisons alone More choice to shop from


 
Assignment 2 - McDonalds and BP
Task 1 
Would we live next door to McDonalds?
Living next door to McDonalds would not have been optimal for me because it would cause more problems than it solves. Even though living right next to it would be very convenient and I never have to worry about been hungry and having no where to eat, I concern more about other aspects in my life that are just as important, just as noise, congestion, litter, etc. 
The first concern is noise since it will be very noisy living right next to a lot of production machines working 24 hours a day. There will also be a lot of people coming to eat at McDonalds, so the traffic will be very congested, causing more noise due to horns ringing. There would be more litter because people are producing more food waste than elsewhere. I would also be concerned with obesity since they sell junk food and eating too much of it would make me over weight.

Areas of activity affected by ethics for McDonalds
Marketing could be affected by ethics since they are selling junk food and people might have an adverse feeling toward junk food since it is not healthy. Operations could also be challenged by ethics since the food safety problem is of a great concern to the general public. Human resources could also potentially be a problem of concern due to what kind of people are qualified for a work position in McDonalds. Under this category, discrimination against sex, race, disability, educational levels can all be problems.

Social implications of the ethical behaviour
Problems in operations could have a very big impact because if, and in reality there has been, problems in food safety, then people’s health is in danger. There had been reports in the news in the past saying that McDonald’s food is not clean and that there had been chemical additives in their food, so all those people who has consumed their food is in danger. The social impact would be in such a big size depending on how popular McDonald is in that area of concern.
Marketing could also be a very big concern since in schools, we are all taught that junk food is not healthy. However, if McDonald’s kept on having advertisements of their junk food, then it is against the will of health institutions who promote the healthy lives and wellbeing of the people. Government sectors such as food regulators would step in and assess the quality of McDonald’s food, causing them troubles related to legislation. This could also impact their business in a large scale.
The ethics problem of human resources would not be of such a big scale than the previous two questions because the number of people hired to work at McDonald’s is a small number relative to the number of people who see McDonald’s ads and those who actually consume at McDonald’s. So ethics involved with human resources would not have such a big social impact, but complications would it would certainly create problems for the running for of the business for themselves. 
The stakeholders are going to be negatively affected by all of the problems identified above. It is in McDonalds’ interest to solve these potential areas where they would be affected by business ethics so as to eliminate the need of solving complex problems in the future.

 
Task 2
Brief introduction to BP 
British Petrol is a multinational gas firm that produces and exploits crude oil. Headquartered in London, it is the world’s sixth largest energy company by market capitalization. It has a revenue of 358.7 billion USD and 83900 employees as of 2014.
The community 
The community involved included the group of people who live in the same area close to the oil extraction place or BP stations. It also includes animals living close to the oil extraction place. The community can also mean all the consumers who use BP products on a global scale. They are different such that those who live close to the oil extraction area are going to be more affected by anything that happens in that area while those who live far away from those areas are only going to be affected when the final products reach the consumers.

Key ethical concerns facing communities – BP
In the Deepwater horizon spill in 2010, the community involved were damaged because they have to suffer the negative externalities caused by environment pollution. For example, the fish that were living on or near the oceans now can’t eat the fish in the ocean since it is all covered with oil. BP had already spent 28 billion dollars on treating the damages and would incur further fines. This is a huge issue because even though they spent a lot of money to recover some things and to recover a part of the loss for the fishing industry, sometimes lives of animals, which are just as important as lives of people, cannot be recovered with any amount of money. The impact of this issue is very negative in terms of fishing industry since they lost the most directly due to the oil spill. The ecology is severely negatively impacted because one thing in the food chain can mean a lot of disruption in all of the upper and lower food chain in the ecosystem.
There oil pipelines could also affect those living close to it because they may cause noise and pollution to the surrounding area. They may pollute the water, produce waste, decrease the air quality, cause harm to biodiversity, and aggregate the climate change. It is a huge issue that needs to be addressed. Since oil is non reusable, they also cause sustainable development problems. There pipelines could emit chemical spills, oil spills such as methanol and glycol into the produced water and surface water, mixed with sewage water.
Pollution from refineries had also been a big concern that BP had caused to the communities.  In the year 2000. BP launched a new line of petrol station in the US, UK and Australia, to make things look more eco-friendly, they revised their logo such that BP looks more like an environmentally friendly retailer. However, pollution from refineries continue to be a problem because they were emitting gas pollution and other small particles into the atmosphere. The residence around that area were affected severely. 

Measures that could be taken to improve corporate responsibility 
BP could have had more supervisory on the quality of their factories, oil refineries and exploitation processes to ensure that leakage do not occur. For example, they could increase the frequency with which they regularly check the security of their factory machines. They could increase the number of people stationed at different spots in the factory to make sure that security issues happen less often and that even if it does happen, things can be solved immediately. They could also renew their machines more often so as to make sure that the equipment are not depleted and cause security problems.

Pressure groups and a summary of their key concerns 
Greenpeace stated that "The spill here in the Gulf of Mexico is the worst environmental disaster in the history of our continent." They had been working with scientists and professors in universities to find out what really happened to the oil spill and what the real impact of it is on the society. Since this is a globalized world, the impact on the Gulf of Mexico can also affect the rest of the world through international trade. 


Initiatives or policies the government uses to deal with the issues.
In the past, BP has already followed legislation such as “the oil pollution act of 1990” to make their firm operate more ethically. According to the act, there had been more funding for the oil spill liability trust fund. Related firms were are required to create spill scenario plans before drilling for oil. Moreover, new tankers must be built with double hulls. With these rules, the responsibility for the oil spiller was extended. Federal trustees are charged with assessing damages to natural resources. For some high risk areas, there had also been area contingency plans. Finally, there had been enhanced penalties for oil spillers.

Ways in which these companies could improve their corporate responsibility
In the future, BP could have closer supervision of contractors and could dig relief wells to make the firm more ethical. From the economics point of view, the market reaches an equilibrium at the point where supply equals the demand. So I believe that it is our fault (the demand side) as much as theirs (the supply side). 

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