Ethics in Business

A look at the effects of business ethics globally

Overview

International businesses occurs around the world and brings up many interesting topics. Some involve illegal acts, while some provide beneficial strategies to promote products to consumers. The unethical practices of companies and various businesses will be discussed here and will shed light on how these practices effect the Government, Consumers, and Businesses in an economy. We believe that the issues effecting the international business world include sweatshops, corporate corruption, and Advertising. Here we will analyze these issues and try to convince you whether the issue actually provides more benefits to the world of international business or vice-versa.

Corporate Corruption

Background of Issue

Many businesses struggle when dealing with corporate corruption because at high levels the corruption because such a secretive and in depth strategy that it is very hard to unfold. Corruption leads to a betterment of the people involved in the scheme because of the increase in profits they make for themselves but as an effect of this many others that are not involved in the crime are harshly struck with the negatives. Corporate corruption seems to be an on-going ethical issue in the world of trade and will not slow down or end unless there is severe and immediate action against the people who are leading these crimes.
Corruption: The Economic Impact

Cost/Benefit Analysis

Government:

Costs:
#1: Ruins the reputation of the government when a corruption plot is uncovered
#2: Countries stop trading with companies known for corruption so this decreases the amount of exports/imports a country is putting out.
#3: Many political figures fall into bribes of supporting the corruption and this damages the stability of the government .

#4:Corruption destroys the trust within the government


Benefits:
#1: Increase of revenue for the government through taxing the company that is making the “dirty” money.
#2: Some trade partnerships can be strengthened and increased through the sacrifice of some human rights.

#3: Some people in the government that are affiliated with a business that is working through corruption and bribery can make huge amounts of profits.

Business:
Costs:
#1: Corporate corruption results in an increase of crime within the business because when they realize that breaking the law and regulations are increasing their profits then this may lead for them to continue this and increase the number of rules they are breaking.
#2: when resources are tampered with and used improperly the efficiency of a business suffers.
#3: Investors are skeptical of doing business with companies and municipalities that are known for corruption.


Benefits:
#1: The top players in the corruption scheme are bringing in more revenues
#2: If this goes undetected than many more trade partnerships are created through the impression that the business is operating legally.

#3: When small – medium sized businesses are most influenced by allowing corruption to take place in their organization because they feel as if they are not significant enough to be caught and this helps them get higher up in trade because they can have lower costs and more profits that they can use for expanding their business. Smaller business are also bribed by larger corporations to not bring up anything relating to corruption so that both businesses can continue to make illegal profits.

Consumer:

Costs:
#1: Consumers are tricked into thinking that the business is run honestly but when in reality the business is breaking laws and regulations to earn its money.
#2: Products maybe shown as coming from fair trade locations and are said to not be related to violations of human rights but many products in fact are being made from sweatshops and by people who are not being provided the expected treatment under their human rights.

Benefits:
#1: Consumers can get products and services at lower prices and costs
#2: Consumers get more variety of products because companies that are involved in corruption and are not detected are allowed to sell any item that they legally can so this means the consumer can purchase that item since there is no regulation against the purchasing of it.

Advertisment

Background of Issue

Advertising has always been a controversial topic. This is due to the amount of advertisements seen in today's society. Advertising goes from trying to help promote a certain product in today's market, to sabotaging someone's election campaign by promoting false information. None the less, people pay a lot of attention to all advertisements as it lures the people in. This can have an impact both positively and negatively. Although many think that advertising helps promote events/products, which it does, many do not realize that to create certain advertisements, it could take millions to make. An example of this is the Super Bowl, at half time, to place an advertisement it will be high up in the millions for a 30 second commercial to promote a certain product. So in essence, there are several costs/benefits in advertising.

Cost/Benefit Analysis

Government:

Costs:
#1: False advertising leads to misunderstandings with the people inside that government.
#2: Number of controversies with advertising, this impacts the economy/ society due to confusion.
#3: The government does not want to be a part of false advertisement, due to the ability of people to sue certain companies for falsely advertising a certain product, ie: a childs toy may advertise the product as already built and assembled in a commercial, but when bought assembly is required.

Benefits:
#1: Certain advertising is positive. An example of this is when elections come around the corner, candidates use posters, flyers, and social media to advertise the campaign they are representing.
#2: Certain companies are government owned, so when advertisements are released they could potentially help that company increase its revenue, ie: LCBO/ Beer store is government owned, and many commercials are seen on television about new drinks that are in the market, this helps promote the drink which allows people to go out and buy it, leading the company to make sales.
#3: If the government needs to advertise a certain matter to its people, it is much easier for them to advertise it than anybody else. An example of this is that they can advertise using many different ways (news:cp24, internet: CNN.com, radio)

Business:

Costs:
#1: The physical cost of making an advertising. Although commercials are short and about 30 seconds, some take hundreds to millions of dollars to make.
#2: Costs of making billboard space, posters.
#3: Certain companies will try to counter act certain business's. For example, if Tim Horton's comes out with a commercial about Roll up the Rim, we hear about competitors such as McDonalds countering the promotion, and also having free coffee. This can be seen as a negative as people may think one promotion is better than the other, which leads them going to one of them.

Benefits:
#1: Helps products become more known, this is also known as exposure. More and more people will know about it.
#2: Brand recognition, for example, if you go to a grocery store and you see Coca Cola and next to it a third party soda, you are likely to choose the Cola due to the brand name.
#3: Several different mediums of advertising, TV, magazines, commercials. These can also be advertised to the appropriate audiences, ie: wheel chairs can be advertised in the seniors daily magazine.

Consumer:

Costs:
#1: False advertising. This can come in many ways, ie: a product may show certain material that comes in box, but in little writing on the bottom it may say this product is not included. People will usually question what went wrong.
#2: Certain products may not be as they seem, for example a BBQ may seem different in the picture the buyer was given, but when the product is finished it will looking nothing like how it should be.

Benefits:
#1: Viewers of advertisements are usually very gullable, yet brainwashed, and will have to buy certain product that a specific brand/company releases.
#2: Certain hype revolving around products makes for a big impacted first day release, ie: when apple drops the new iPhones, people are waiting in line for days until the product is released, due to such levels of advertising.
#3: Certain fans get brainwashed and addicted and have to collect every item a specific brand releases. An example of this is air Jordan shoes, they release after about 4-5 years and are hyped very close to the release date, hyped fans MUST buy them to add to their collections. This also shows the impact that certain products have on certain audiences, many can become addicted to it helping the company make profits.

Sweatshops

Background of Issue

Sweatshops are found in many different countries. This is due to the fact that they provide low production costs for many mainstream companies. Sweatshops greatly benefit companies because in countries like Mexico, India, China where labor is cheap companies save lots of cash they would be spending on paying salaries in a country like Canada. However, sweatshops are usually frowned upon due to the fact that they violate many labor laws. This is because they often have poor working conditions, unfair wages, long hours, and involve child labor. Especially in developing countries an estimated 250 million children of ages 5-14 and forced to work in sweatshops. People in sweatshops are also subject to verbal and physical abuse from managers and supervisors and at times are forced to work overnight and multiple shifts.

Top 3 Ways Sweatshops Help The Poor Escape Poverty

Cost/Benefit Analysis

Business

Pros:

1. More profit for the business because they can exploit desperate people

2. Businesses can decide what to pay their employees

3. Allow businesses to provide low costs for consumers therefore being more attractive than other products in the same market.

Cons:

1. Businesses are frowned upon by activists because of the labor rights that businesses abuse.

2. Some can find themselves in legal conflicts if they underpay workers and are committing the crime of child labor

3. Many consumers of sweatshops products do not want to purchase goods made in sweatshops because they do not want to support the business in unethical production

Government

Pros:

1. Sweatshops help with providing labor for famlies who were in need of income which increases the economy for a government.

2. Government can easily regulate sweatshops incase they are being non benefical to the government to make them benefical.

3. Government does not have to find a solution to poverty when companies like Nike come and build sweatshops


Cons:

1. Governments are protested against because they allow these sweatshops to violate legal rights

2. The Government has to deal with legal issues involving sweatshop companies if they are violating laws.

3. Lowers amount of businesses in a Country because of the competition big companies destroy due to their sweatshops

Consumer

Pros:

1. Gives consumers low prices due to cheap labor

2. The more sweatshops the more variety of product a consumers recieves

3. Products are made faster for the consumer because sweatshops produce faster than normal companies


Cons:

1. Some consumers do not like the fact that they are supporting sweatshops and child labor by purchasing products.

2. Sweatshop companies dominate the market therefore causing consumers to mainly purchase their products

3. Consumers are attracted to lower prices therefore sweatshops will be hard to elimate for activists who are against sweatshops