Ethics deals with individual personality and the moral principles that rule and restrict our behavior. It explores our question of good or bad, right or wrong and moral responsibility (Shaw, 2008).
Relationship between ethics and business
The values that guides a individual should also guide the business. The relationship between ethics and business is intrinsically interlinked. A successful business is a business which can adequately notice and cultivate the relationship which exists between the two (Goessl, 2010).
Businesses that shows and advocates high codes of ethics are more successful in the long run because they show a commitment to the society, employees, customers and the business itself (Goessl, 2010).
Introduction to ethical dilemma case
Zelma Zolnerwich has developed a line of sleepwear using Indian cottons and Western styled designs. She wants to emphasise the combination of Indian block print material and western styled designs to appeal to boutique wholesalers and higher end shoppers. She offers a marketing intern partnership in her business and both of them travels to Ahmednagar in India where the factory is located. While in India, the intern discover that average cost of fabric and production of each sleepwear item varies from $15.00 to $25.00. The workers at the factory are paid 50 Indian Rupees per hour, which is the equivalent of $1.00 per hour. The factory, which is located on a dusty narrow street near the town's bazaar. Entry to the factory is via a long steep metal stairwell on the street to a first-floor room with a low ceiling. The intern found around 30 women working at sewing machines. Some of the women look very young and some quite elderly. Zelma assures you that $1.00 per hour is a lot for these women and that the conditions are normal in India.
Ethical dilemmas with Zelma's Business
1. Low wage for workers
The factory workers are paid $1.00 per hour which is equivalent to 50 Indian rupees
2. Dangerous working condition
The factory does not have proper infrastructure. It has low ceiling, long steep metal staircase and with no fire exit in the building.
3. Child and old age workers
Workers consisted of child and old age women.
4. High profit level
Zelma making high profit by exploiting the workers.
The increased production of cheaper products from countries like India helps in the growth of many businesses but it comes with unfavorable human cost. The factories that rely on the exploitation of its workers is famously termed as “sweat-shop”
It is the moral doctrine developed by John Stuart Mill, that action should be taken to bring the greatest possible outcome for everyone effected by our decision (Shaw & Berry 2010). Utilitarianism holds that an act is right only if it creates the greatest good for the greatest number (Donaldson, Werhane and Cording, 2002)
By applying the Utilitarianism theory to the ethical dilemma, the benefit and losses are as follows-
• Zelma making high profit.
• Cheaper cost of production
• For Zelma money is a source of happiness
• Though wage is low, but it is better than unemployed
• Child and old age labour is morally right because it helps them support their family
• Low wage rate of workers
• Poor working condition, which can affect the mental and physical level of workers
Kant theory of ethics was developed by Immanuel Kant. According to this theory, the rightness and wrongness of an action does not depend on the consequence but on, if the action fulfil our moral duties (Shaw & Berry 2010). This theory believes that we take moral action not because of the consequences but because it is the right thing to do (Shaw & Berry 2010). This theory believes that human being should be treated under all circumstances as an end not as a means (Donaldson, Werhane and Cording, 2002)
According to Kant theory, if actions are taken by free will only then the action is moral and can be held responsible for (Shaw, 2008). In Zelma case, the workers are not forced to work. They are working on their own free will and support their family. But the workers that may include children and old age women are exploited and are working in dangerous condition. And in Zelma case, she is treating human as a means and not as an end.
According to this theory, the position that individual conscience or reason is the only moral rule, and there is no objective authority or standard to consider (Philosophybasics.com,2018).
This theory believes in seeking the highest good for each individual rather than the highest universal good (Philosophybasics.com,2018). In Zelma case, Zelma believes in earning high profit which will bring her happiness. Zelma is thinking individually and how it will gain her. She is not thinking about the universal effect that her decision will bring. Unfortunately, the theory of individualism promotes selfishness and greed. Profit is the only goal for business that follow individualism.
In 1992, Jeff Ballinger an activist published a report highlighting an Indonesian worker who worked for a Nike subcontractor for 14 cents an hour, less than Indonesia's minimum wage, and documented other abuses (Nisen, 2013). After this report was published, mass protest was carried by people around the globe against Nike. Because of which Nike demand decreased and Nike was constantly criticised (Nisen, 2013). In 1998, Nike increased the minimum age of workers, established non-profit group to independently monitor the factories and established a code of conduct (Nisen, 2013). The company performs some 600 factory audits between 2002 and 2004, including repeat visits to problematic factories (Nisen, 2013). The company made the audit data as port of its corporate social resbonsibility report and continues to post its commitment and standard (Nisen, 2013).
In order for Zelma to ethically provide employment to the workers, condition should be improved. In the current situation the worker face lot of suffering. They are working in a dangerous condition at low level of wage rate. Since the suffering of the worker is far greater than the profit gain of an individual. Zelma does not follow the greatest principle of happiness. Therefore, utilitarian theory is the one that applies best to Zelma case.
Bizfluent.com. Available at: https://bizfluent.com/about-5431829-integrative-social-contracts-theory.html
Donaldson, T., Werhane, P. and Cording, M,2002, Ethical issues in business, Upper Saddle River, N.J.: Prentice Hall.
Flamand, l,2017, Viewed 2nd oct,2018
Goessl, L,2010, Understanding the relationship between business & ethics, Viewed 1 Oct,2018
Nisen, M,2013, Why the Bangladesh factory collapse would never have happened to Nike. Business insider Australia, Viewed 2nd oct,2018
Philosophybasics.com,2018, Individualism - By Branch / Doctrine - The Basics of Philosophy Viewed 2 Oct,2018
Shaw, W,2008, Business ethics, Thomson Wadsworth, Belmount
Shaw, W. and Barry, V,2010, Moral Issues in Business, Cengage Learning, Belmount
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