THE RELATIONSHIP BETWEEN BUSINESS AND CONSUMERS

Customer rights - quality, safety, price and customer service were once the most important ethical concerns in business. Now consumers influence business ethics, and have been instrumental in bringing about change: consumers expect businesses to demonstrate ethical responsibility in its widest sense - affecting the treatment of employees, the community, the environment, working conditions etc. Some companies have been the focus of consumer criticism and forced to change their practices - Shell over Brent Spar and Ogoniland; Monasato over GM food; Nike and Gap over child labour. Shell bowed to consumer pressure and did not sink the Brent Spar, and Nike now monitors its factories following the BBC Panorama programme. One of the first ethical businesses was The Body Shop pioneered by the late Anita Roddick. The company became a great success in the mid 1980's following a change in consumer awareness in how beauty products were tested and began to look for alternative ways. However, an ethical business does not need to be at the level of The Body Shop as even small gestures like participation in community events or collections for charities can improve a company's appearance to consumers. Consumer action, therefore, can be very effective, as if enough consumers stop buying from a business then the business will be forced to change or go bust. Ethical business practices will give a better imager to the consumer and better sales. THE RELATIONSHIP BETWEEN EMPLOYERS AND EMPLOYEES Much of the employer/employee relationship now consists of them working together. In 1978 in the UK the Advisory, Conciliation and Arbitration Service (ACAS) was set up to try and create good and harmonious working relationships. It negotiates in disputes, and has been very successful, as there have been few major employment disputes, and ACAS has been able to suggest guidelines for better relationships in most situations. For employer/employee relationships to be successful there has to be a balance of interests: the employer wants to plan for the future of the business, make profits and keep employees motivated; the employee wants the best possible conditions and living standards. If employees are unhappy there will often be high turnover of staff, poor time-keeping and much absenteeism - as a result of this discontent profits will suffer. However, relationships between employers and employees do not always work out. The internet now allows for rapid sharing of information across the world - and multinationals operate across the world. There are a multitude of web sites that publicise and discuss the behaviour of businesses. Whistleblowing is now more acceptable - access to secret information is now better and it is even protected by law in some countries. From 'Deep Throat' (the codename of the informant in the 1972 Watergate Scandal) to Dr David Kelly whistleblowers have risked their lives to tell what they perceive to be the truth and to make organisations accountable. Whisleblowers have even gained the respectability of being the subject of a television drama series. The question of whether or not it is ethical for an employee to blow the whistle, especially in the public domain raises questions of confidentiality and loyalty - there is no simple answer to cover all cases. However, neither confidentiality or loyalty imply that the unethical conduct of others should not simply be reported, especially when product safety or the severe financial hardship of others is concerned. Whistleblowers often risk dismissal and may find it difficult to find similar employment in the future, they may be frozen out or ostracised. There are now organisations to protect whistleblowers such as 'Freedom to Care' which promotes our 'ethical right to accountable behaviour from large organisations' and that employees have an 'ethical right to express serious public concerns' in the workplace and, if necessary, to go public. Thought Point 'Business exists to make a profit.' Is it society's task to protect those who are badly affected in the process? Do you think standards of integrity in business are declining or not? Give reasons and examples. Do you think workers should participate in management? Case Studies 1) There are three area managers in a company: Tom; Steve and Tim. Tom was the latest to join the company and has learnt from Tim and from his own observations that Steve is not to be trusted. Steve seems to have no morals and his only goal seems to be his own advantage. He 'manages upwards' always trying to please the director, he lies to cover up difficulties or shortfalls, he tells his staff to take no notice of established policy - but never in writing and never to more than one person at a time. At the same time Steve gives the impression of a straight-talking man of the people. Tom finds this really hard to deal with but is unsure how to respond. Sinking to Steve's level would not be acceptable, but just putting up with it like Tim does, and Dave's own staff do, really goes against the grain and all that Tom holds dear. How do you accuse a colleague of dishonesty? • What are the choices facing Tom? • What principles do you think are relevant when dealing with a colleague of this sort? 2)The head of a department in a medium sized company with a good profit record is 55 years old and has worked for the company for 20 years. He is married with two children at university. His life is his work. However, he is becoming less effective and no longer inspires those who work for him. Several of the brightest young people in his department have left because of the situation. If you were his boss would you: 1 Declare him redundant with compensation? 2 Retire him prematurely on a full pension? 3 Transfer him to an advisory post? 4 Take corrective action and leave him in his job? 5 Transfer him to a new executive position on the same pay until he is 60? 6 Do nothing or take some other course of action? Why is it important for a business to behave in a socially responsible manner?