Business ethics is the study of how a business should handle policies and practices in regards to potentially controversial issues such as discrimination, insider trading, bribery, corporate governance, as well we social and fiduciary responsibility. We will be looking at the history of Business ethics and how it has shaped business today. Furthermore, this paper will be looking at four organizations to break down their business ethics and how they compare against each other. In order to do this, four questions will be asked: What each company does? What is the ethical system of each company? How each company evaluates and measures its ethical systems. Lastly, how each company impacts the community it operates in. The four fortune 500 companies that will be evaluated are General Electric, Starbucks, Walmart, and Microsoft.
Since the early 1970’s, the term Business ethics was commonly used in the United States with origins found in academy (writings, teachings, research, and publications). The term business ethics then began to be used in a more generalized in media and public discourse mostly associated with business scandals. Later, business ethics took another turn and was used to create the corporate structure. The corporate structure involved forming ethics codes, ethics officers, ethics committees and ethics training (De George, 2015).
Business ethics is still very much a part of every business today; it generally focuses on the moral and ethical actions of people. Today the question has shifted from why or should ethics be a part of business today, to which values and principles should guide business decision and how ethics should be combined within business (Hartman, DesJardins and MacDonald, n.d.).
General Electric is a 125-year old company that refuses to grow up. In fact, they pride themselves on what they call Thinking like a startup as a flagship means of delivering innovative products and services. GE has become an undeniably great company in many respects. Grown from Thomas Edison’s electricity provider into a Fortune 10 multinational, it has become a multimodal corporation offering not only energy utilities, but also consumer and business electronics, technology infrastructure, and capital finance, among other products and services. As GE has expanded to emerging markets in India, China, and beyond, its commitment to legal and high ethical standards (both its host countries’ and its own) is more than just good business ethics for the company”it’s good business around the world. General Electric also attributes their focus on ethics as key component behind their market agility. Business ethics are so important to the firm that former CEO Jeffrey Immelt developed a personalized ethics letter that is distributed to each brand-new employee to set the tone for ethics in GE’s corporate culture. The global corporation has made ethics and compliance a benchmark of its operations around the world and is, in many ways, the gold standard that other companies look to when it comes to modeling global compliance and ethics programs.
To overcome cultural barriers to reporting ethics violations, the best companies develop programs and policies that allow workers from different cultures to make ethical decisions and report bad behavior in a way that gibes with their own cultural worldview. The company also conducts annual surveys and focus groups to assess how well its employees think the system is working and how comfortable they feel reporting problems they perceive. It is no doubt that GE’s commitment to compliance extends beyond its immediate employees. Because you are more than likely to buy a GE-brand product from an authorized retailer than directly from the manufacturing plant, the company must ensure that retailers who buy and sell GE merchandise also receive compliance training. GE’s growing globalization can make these efforts tricky, though. Different cultures have different frameworks for understanding integrity and how to confront unethical behavior. That’s why GE offers five different pathways in which employees around the world can bring their concerns to management’s attention: Employees can talk to their direct managers; they can go to the compliance department; they can talk to someone in legal services; they can take their concerns to human resources; or they can report issues anonymously to an ombudsman through a variety of channels.
Starbucks, named after the first mate in Herman Melville’s book Moby Dick is known to many around the world as a place that sells coffee. The company started in 1971 originally as a retailer of teas, spices, ground coffee and whole beans in the historic Pike Place district of Seattle, Washington. Today Starbucks has locations in over 70 countries and serves millions of customers daily. The concept of each location is not simply to serve coffee. Based on the coffee bars found in Italy they wanted to recreate that same experience here in the United States. Not only as a place to purchase coffee but also a place of conversation and somewhere you could go to within your community. The company also offers pastries, snacks, breakfast items and premium teas, even the music you hear inside a Starbucks is specifically chosen for its appeal and artistry. Starbucks is one of the top selling coffee brands in the world. They are known today as a premier roaster and retailor of specialty coffees while providing a coffeehouse experience.
Starbucks has various ethical systems in place. When it comes to the onboarding and hiring of their employees they promote an equal opportunity environment hired based only on job related criteria and do not engage in the practice of forced labor. They also foster a work environment free of bullying, harassing and discrimination. Starbucks views diversity and hiring a diverse workforce as a competitive and strategic work advantage. When it comes to employee pay and wages, Starbucks follows all applicable federal, state and local laws. The company also believes in ethical sourcing for all of their products, supporting local farmers and participating in forest restoration programs and continuing to reduce their overall environmental footprint through the use of recycling, energy and water conservation and green construction. When sourcing their coffee beans and working with local farmers Starbucks sends partners out to those locations to fully engage and work with the local communities and to ensure ethical standards are met. They have a one hundred percent ethically sourced coffee bean currently with goals to have all of their tea and cocoa based products one hundred percent ethically sourced by 2020.
Starbucks understands the importance of community involvement and its impacts. Branded right into their mission statement To inspire and nurture the human spiritone person, one cup and one neighborhood at a time (Starbucks.com). The local neighborhood coffeehouse experience has been their vision since the beginning. The idea of a place people in their local communities can go to and chat, meet up and sometimes even conduct their business and daily work at. The company is committed to the role of environmental leadership in all aspects of their business. This can be seen with the actions they take such as buying, selling and using environmentally friendly products, instilling environment responsibility as a corporate value, being fiscal responsible and encouraging all employees to share in these same missions. They try to work with employees and realize the need for a positive work and life balance to allow those employees to be more involved within their communities. All of these different missions Starbucks itself consistently measures and monitors the progress for each project. Overall Starbucks is a company that understands the importance of communities, the environment and the people they serve. They continue to keep a balance between profit and having a conscience and being socially responsible.
Walmart is multinational retail corporation that operates a chain of hypermarkets, discount stores, and grocery stores. They consider themselves to be a one-stop shop that allows shoppers to buy an assortment of goods, from grocery and entertainment, to sporting goods and crafts. It is also the largest U.S. grocery retailer.
Walmart uses the Utilitarianism ethical system, this means that the actions they do are right if they are useful or benefit the majority. Most retail stores that thrive in the free market use this. They try to maximize the overall good by selling products at a low price and giving back to society. They have also raised wages in the U.S. and expanded benefits to better help employees.
Walmart uses annual Global Responsibility Reports to measure and evaluate their ethics and to make sure they are up to level with their ethical standards. According to Doug McMillon, it helps their company identify key risks in their business, develop standards, and processes to address those risks, and then bring those standards and processes to life in the business that is Walmart.
Walmart has a huge impact universally. Walmart currently employs over 2.2 million associates and invests 2.7 billion in higher wages, training, and education of their employees. Walmart’s low prices help low-income shoppers and the new low-cost pharmacy program has helped lower the cost of pharmaceuticals nationwide.
Walmart has also been noticed for their various environmental initiatives. It has replaced store lighting, increased the efficiency of both their buildings and their fleet of vehicles, and has become committed to making their stores use solar energy, all in an effort to reduce their carbon footprint.
According to their company website, Microsoft “enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organization on the planet to achieve more” (Facts About Microsoft, n.d.). Microsoft has been a technology company for over 40 years, founded in 1975 by Bill Gates and Paul Allen to sell BASIC interpreters, an old coding language, for the Altair 8800, one of the first personal computer systems developed. Gates and Allen followed up their BASIC Interpreters with the phenomenally successfully, and still widely used Microsoft Windows platform. Microsoft is now spending a great deal of their time and financial resources on growing their cloud platform offering, Microsoft Azure.
One of the most important and imperative values that Microsoft holds is a heavy emphasis on innovation. In the technology industry, you have to stay ahead of the curve to survive. With the cloud and artificial intelligence exploding in both popularity and potential revenue, Microsoft places a lot of worth in their employees thinking outside the box and their website highlights the progress they are making. Among the featured examples are the work being done Artificial Intelligence for speech recognition, Speech separation or overlapped speech recognition is paramount for far-field conversational speech recognition. It has a wide range of potential applications, such as meeting assistance and medical dialog transcription. (Thinking Outside of the Black Box, 2018). Another featured area of Microsoft innovation is how machine learning can be used to help create fair decision practices, Human decision makers are susceptible to many forms of prejudice and bias, such as those rooted in gender and racial stereotypes. One might hope that machines would be able to make decisions more fairly than humans (Dud?k, 2017). By taking the time to emphasize their current technological advances and provide such detailed examples, it is clear that one of Microsoft’s primary values as a company is to inspire and innovate.
Also, of primary focus on for Microsoft is their vision or corporate responsibility. Stated as a manifesto on their website, We’re working to apply the power of technology to ensure corporate responsibility, safeguard human rights, and protect our planet. Our policies and business practices reflect a commitment to making a positive impact in communities around the globe. This commitment doesn’t just impact the type of products and services we develop”it’s also central to why many of our employees come to work every day (Corporate Social Responsibility, n.d.). Microsoft is an international corporation, with offices and departments all over the world. With this broad reach comes a great responsibility for monitoring and ensuring that all human rights are respected across the globe. In 2017 Microsoft partnered with the U.N. Office of the High Commissioner for Human Right to develop new technologies that can better predict, analyze and respond to crises (Solomon, 2017).
To ensure that the entire company is both aware of and can quantify Microsoft’s position on human rights, they have created a Global Human Rights Statement and provided in-depth training for employees. Microsoft is a big proponent of good governance and the rule of law around the world as a system of measuring and guaranteeing its ethical system around the world. Good governance and rule of law lead to reliable enforcement of labor and environmental laws and promote justice and national security systems that maintain an appropriate balance between protecting people’s safety and protecting people’s rights from government infringement. Microsoft advocates across the globe for public policies and laws that promote innovation while protecting human rights (Microsoft Global Human Rights Statement, n.d.). They also believe that they can be most impactful on ensuring human right by being present in areas that are struggling with this issue, being an involved and visible example for change and growth.
Another area of Microsoft ethical importance is responsible sourcing. Computers and hardware are still made of raw materials that need to be sourced, often from impoverished and unmonitored nations. Microsoft expanded our partnership with Pact, a leading nonprofit international development organization, to support work in the Democratic Republic of Congo to reduce child labor in mining (Responsible Sourcing Practices & Strategies, n.d.). Although not their legal responsibility to monitor in countries with loose or no child labor laws, Microsoft’s code of ethics urged them to take the lead and ensure that no children were taking advantage of to produce their goods. Additionally in the Microsoft Supplier Code, specific direct language is used to clearly show that Microsoft in no way support any of its international suppliers using slavery or human trafficking, All workers must be provided with clear and understandable written information about their employment conditions in a language understood by the worker with respect to wages, benefits, location of work, living conditions, housing and associated costs (Smith, 2018).
Microsoft also works hard to positively impact local communities. Through Microsoft Philanthropies they support Medical Teams International to provide medical care for more than a million Sudanese refugees and Ugandan citizens. They also have the Technology Education and Literacy in Schools (TEALS) program to help bring computer science into every high school, the program pairs classroom teachers with technical volunteers to provide a quality computer science education. Within two years of working with a tech volunteer, 97% of classroom teachers are able to teach computer science on their own, creating the basis for sustainable CS programs (Learning Digital Skills through TEALS Program, n.d.). Microsoft is a big proponent of the Skillful Initiative, which aims to use the very forces driving changetechnology and datato build an ecosystem of workers, employers, state and federal government, educators and workforce centers to help Americans adapt to the changing workplace, (Microsoft Philanthropies, 2017) and has donated $25 million to the cause so far.
Microsoft prioritizes people, and they make this clear in both their international and local enterprises. Their impact can be felt around the globe, not just in technological advances and amazing developments, but in people’s lives through fair work practices and community involvement. It’s easy to see way Microsoft has been a Fortune 500 Company for the past 25 years, with astounding financial success and ethical business practices, it has well earned its position.
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