Which meaning has the business ethics in enterprises in the contemporary world?
Topic: Business ethics: Business ethics in the contemporary world
Problematic: Which meaning has the business ethics in enterprises in the contemporary world?
Plan
Introduction
- Business ethics
- Definition of Ethics and Business Ethics: Origins, etymology and Source
- Obligation
- Actors: Stakeholders
- The market of business ethics: Business Ethics among consumers
- The meaning of ethical products and ethical consumption
- The use of ethical products as promotional products
- The consumer’s point of view about business ethics
- Actors using business ethics for what it really is
- The respect showed to business ethics nowadays
- Lack of respect for business ethics in Western countries and in several companies
- The case of the Western countries
- The case of several enterprises
- Actors that respect business ethics
- The increase of the competition in business ethics
- The use of ethics as an object of competition
- Competition, an obstacle to ethics
- Synthesis and feeling during the elaboration of the work
Conclusion
Methodology
Introduction
Business ethics and corporate social responsibility is an ancient concept widespread in the XXI century. Very popular in the United States where all investors are betting heavily on ethical investment which consists of « investments while promoting certain principles or moral values that promote the improvement of society[1]« , ethics requires that companies, regardless of their size, care about society, consumers, the environment, etc.
In business ethics, there are stakeholders whose role is to implement and enforce the ethics within or outside the company. Generally, stakeholders are composed of internal and external actors to the company: employees, partners, etc. On that point, business ethics is as much about leaders as mere employees. It allows them to coexist within the structure, to work together to build a charter for good governance and good cooperation between them, to get along with another, to share, to respect, etc.
Business ethics does not only concern these stakeholders but also consumers and society which are the beneficiaries of the products they fabricate. These consumers are now fond of ethical products which are very fashionable. Health conscious, they look for products that comply with this requirement. Thus, products that protect the environment such as organic products, electric cars and appliances using natural energy (wind, solar, etc.) are becoming increasingly popular and highly requested in the market.
Beyond consumers’ health, business ethics also means that companies take care of the environment. Limitations of emissions of Carbone dioxide and of the use of chemicals, etc. are concrete actions that can be used in this sense. Most of the companies enact their own code of ethics that is part of the code of conduct. Violation of this code will result in sanctions; ethics is a duty, an obligation for actors working in the company and their partners.
Business ethics is also a matter of state. Indeed, the state is the first organ to promote ethics through the respect for human rights, the abolition of anti-social laws such as the death penalty or the execution and other sanctions granted to criminals that transgress the codes of ethics.
So, business ethics is a matter of moral and obligatory duty. It must be respected by each stakeholder. In this work, we are particularly interested in this respect devoted to ethics. We want to understand better the place of business ethics in the contemporary world; so, we have raised the following issue: « Which meaning has the business ethics in enterprises in the contemporary world? »
To do this, we will divide our work into four parts. The first part is an introduction to our work. We define the concepts of ethics and business ethics. We will present the source of business ethics, the concept of duty (obligation), actors (stakeholders), etc. In the second part of the work, we will focus on the market of business ethics. We’ll talk about the perception of business ethics among consumers, about the relationship between ethics and advertisements and about companies or institutions who practice business ethics for what it really is.
In the third part, we will talk about the respect dedicated to business ethics today. We will see, on one hand, that this respect really exists, and on the other hand, that is absent, it depends on the actors. First, we’ll present the actors, namely states and societies that promote ethics but do not even respect it. We will offer a few examples. Then, we’ll present the actors who respect business ethics and their actions in favor of it. Finally, we’ll develop the notion of competition in business ethics in the contemporary world, its role and its impact.
At the end of the work, we will summarize what has been said and we will discuss about our feeling during the development of this brief. We will also present the methodology applied in the realization of this memory.
- I) Business Ethics
- Definition of Ethics and Business Ethics: Origins, etymology and Source
To understand the concept of business ethics, we will first define the term ethics itself. Etymologically, the term ethics derives from the Latin of the imperial era ethica which means moral[2] and from the Latin of the classical period ethicus which describes all that has to do with morality[3]. So, the adjective ethics represents all that « concerns morality[4]« , while the name ethics means « all the moral principles which are the basis of the conduct of someone.[5] »
Ethical term therefore refers to the conduct of an individual, especially the motives that lead him to act in a certain way. This is a feeling proper to everyone; it is personal and not regulated by any law. So, ethics doesn’t mean obligation, either consciousness. Ethics raises awareness and makes a person more accountable. It motivates him to act according to what seems right and good; so, it tends with his behavior in his daily life, in his work, at school, in the society and everywhere.
Business ethics has the same values as individual ethics. It concerns many actors such internal stakeholders like employees and external stakeholders such as partners; this is consistent with the definition of business ethics proposed by Moreno (2005: 144): « the concept embraces all relations inside of the company (internal and external)[6]. »
In the professional area, ethics is no longer specific to the moral obligation of each and everyone, but it is rather a code of ethics to be observed by external service providers such as partners, but also by internal employees, leaders, temporary agency, etc. Ethics is a duty and a professional obligation that governs the company and holds the reign of order, respect, understanding and brotherhood among the latter.
Business ethics is increasingly recurrent since the second half of the twentieth century[7]. Business ethics is derived from two different movements: the Anglo-Saxon movement « Business ethics » which has already been identified in 1938 by Barnard in his book « The functions of the executives[8]. » Barnard has assigned two specific tasks to the business leaders involved in this business ethics also called social responsibility of business leaders: “he must create ‘moral’ codes and create a favorable climate for the emergence of moral conditions”[9].
So, according to the Anglo-Saxon, business ethics concerns primarily the business leader whose task is to establish a moral code within the structure he manages. He is the first responsible of this code and its implementation by himself and by the employees under his governance. The second movement is business ethics according to the European approach or « Real Ethic » which is also considered as positive ethics[10]. The « Real Ethics » is based on the perception of the ethics according to Paul Ricoeur[11].
These two ethical concepts are complementary. They are part of the code of conduct in the enterprise with which the employees must comply under penalty of sanction. Business ethics is similar to professional ethics. The concepts of leaders’ ethics and corporate ethics appear. On one hand, the ethics of leaders assumes that leaders take the actions of their employees when they violate ethics. Corporate ethics means that the whole enterprise is subject to the rules of ethics and has moral and social duties to perform, especially towards its benefactors[12].
In business ethics, the profitability plays a major role and the individual profit is banned[13]. Thus, companies must justify their profit in an objective context. Despite the existence of two ethics currents, business ethics derives primarily from morality through the conception of good and evil[14].
A company is ethical when it decides to comply with the rules on competition and do what is good, to contribute to social causes, not to use harmful products or processes in the society and in the environment. When these facts are not respected, business ethics is violated.
1.2. Obligation
Business ethics being a professional ethics it is inseparable from the duty or obligation. In this sense, business ethics is not only individual or related to the moral of each. It does not arise under arbitrary in which an individual can do whatever he wants in light of the nature of his act[15]. The obligation in business ethics is governed by a set of regulations included in the Code of Ethics and Conduct.
By definition, the code of ethics or code of ethics and conduct is « a set of values, principles and rules that guide administrators in their responsibilities and duties. It is also a tool to promote and ensure the integrity of fund managers and public services.[16] »
The code of ethics varies from one trade to another. We will present, for example, in the following table, the values and duties included in the ethics code of a rehabilitation center (InterVal). It is addressed to administrators working for InterVal.
Values
|
Obligations |
Join the Board of Directors to assist in the management of the establishment and services to people with physical disabilities.
Consider the rights of individuals and groups in decisions and respect people in trade and decision making.
Make fair and impartial decisions in the equitable distribution of resources.
Judge the projects and actions based on expected results and aim for optimal use of resources.
Clearly communicate information, questions and opinions, show discretion regarding facts and data that has been transmitted.
|
• To act within the limits of his powers Do not exceed the powers conferred by the Law respecting health services and social services, and not to interfere in the internal management of the institution. • Act with care, prudence, diligence and skill To learn, be open to different points of view, to seek advice and take steps to competently assume his responsibilities and duties. • Act with honesty and loyalty Act in the interest of the institution and the population served, in good faith and avoiding conflicts of interest. • Acting in the interest of the person (users / staff) Act in the interests of the person (users / staff) with a concern for organizational performance.
|
Source : Centre de réadaptation INTERVAL (2014). Code d’éthique et de déontologie des administrateurs du Centre de réadaptation InterVal (URL : http://www.centreinterval.qc.ca/fr/a_propos_de_nous/conseil_d_administration/code_d_ethique_et_de_deontologie.asp)
The obligations also vary from one trade to another and from one company to another, depending on the activities it develops, the number of employees, decisions of the leader, etc. Fail in this obligation means fail in ethics itself, and the leader has the primary responsibility for this failure, especially when employees commit violations of business ethics before him, themselves, partners, associates, employees, etc.
It is the duty of the leader to develop a code of ethics and professional conduct in order to govern his company. He should make this code available to the employees, present them the sanctions assigned to derogation to regulations and ensure they respect this code, etc. The leader can take responsibility for the violation of ethics rules. This derogation, depending on its degree, can lead to final removal of the offending.
1.3. Actors: Stakeholders
According to Freeman (1984), a stakeholder is a group or an individual who can affect or is affected by the achievement of organizational goals[17]. The appearance of the origin of stakeholder theory is estimated in the 30s, when Berle and Means (1932) describe the separation between leaders (managers) and shareholders[18].
The Larousse Online defines being involved (being a stakeholder) like a being directly interested in a business, or participate actively in it.[19]. The notion of stakeholders refers to a fact that the shareholders are not the only ones to whom the company has responsibilities. There are also other actors that a company is accountable: stakeholders. There is a classic model of the company in terms of stakeholders that we will present in the following diagram:
Business model in terms of stakeholders according to Evan and Freeman (1983). Source : Cazal, D. (2011). « RSE et théorie des parties prenantes : les impasses du contrat », Revue de la régulation.
According to this model, we can establish a non-exhaustive list of stakeholders, including employees, customers, suppliers and the community, as well as shareholders and other investors[20]. The stakeholder management is complicated; there is also an established hierarchy of stakeholders. So there are stakeholders senior and junior (political or financial actors, lobbyists, NGOs, media…). If first rank stakeholders are directly related to the company, those of second rank are indirectly related to it and are always external. The diagram below summarizes these actors and their position:
Stakeholders in the first and second rank. Source : Cazal, D. (2011). « RSE et théorie des parties prenantes : les impasses du contrat », Revue de la régulation.
In short, stakeholders are the actors to whom a company is responsible. It owes them full transparency.
- The market of business ethics: Business Ethics among consumers
2.1. The meaning of ethical products and ethical consumption
Currently, the market of business ethics has become a trend with the increase of organic products. Indeed, organic and green products comply with the principle of ethics as they watch over the health of their consumers and have a great social significance. They are called « ethical products » and are part of ethical consumption and responsible consumption.
By definition, « an ethical product must meet a set of environmental and social criteria that are inherent in sustainable development and in the enterprise’s social responsibility[21]. » Ethical products are fashion products because consumers love the ethical society.
At a time when the society began to care more and more about its health in consumption, ethical products are becoming increasingly popular. Many consumers are even willing to pay more to consume products that ensure their health, rather than the reverse. So they verify the products belonging to the category of ethics by studying their contents (e.g. by checking on the package if a cookie contains no dyes or chemicals) or by learning about the way they were conceived (e.g. by verifying that the producing factory uses no children).
Ethical products, as organic products or products environmentally friendly (electric car, devices that work with solar or wind energy, etc.) are experiencing a boom. In France, in 2012, nearly two thirds of the French consumed organic products[22]. This consumption is motivated by the care about the impact of certain foods on the health, the respect towards environment and the protection of the local economy.
The consumer, in this approach, needs to be reassured about products consumed, especially about their proximity, their naturalness, their health benefits … but also about controls through which they passed controls through which they passed. These variables are guarantees for consumers about what they eat. Consumers are therefore looking for ethical products and ensure the characteristic “ethical” of products before purchase. This brings companies of all types to engage in fierce competition.
We can’t afford the fact that the use of business ethics isn’t correct because ethical products are today considered like promotional products only. It means that ethics serves just as entertainment and is used not because of its environmental or its good virtues, but just as an instrument of customer’s attraction.
- The use of ethical products as promotional products
Currently, ethical products are mainly represented by biologics. While it has been marginalized for nearly a century, organic farming resurfaced and is accepted by many European and American countries[23]. Organic products have become a trend, bio consumption becoming the current preferred consumption mode [24]. Thus, in 2012, 64% of French consumed organics foods[25] and 86% of the 54% who say they are « well informed » about organic products believe that Bio helps preserve the environment, soil quality, water resources and. 83% of them think that bio provides more natural products that grow without chemicals[26].
The consumption of organic products called “ethics products” becomes more predominant. However, this consumption mainly motivated by a desire to preserve the environment on the one hand is primarily due to the actual trend that tends to the eating biologic products. Among the most consumed organic products in 2011, we find fruits (89% of restaurants that have introduced organic products propose them), with apple topping the list, dairy products (77%), with the yogurt at the first place, and fresh and frozen vegetables (71% and 38%) where carrots top honors[27].
Following the resurgence of organic products on the market, companies are using ethics to attract more customers. They offer organic and natural products for business sake. They use these to attract consumers.
The use of ethics for advertising purposes is common in our time. Companies are pretending to be involved in environmental initiatives or supporting ethical causes solely to become famous. Knowing that consumers pay more attention to products that respect the environment and that they denigrate unethical practices such as the use of children and massive emissions of harmful gases produced by the companies themselves, companies play with ethical products to attract them.
As such, most of them do not actually respect business ethics but only use it as a bait to attract customers. Others just respect ethics because customers want them to do so but not voluntarily. Others, as in the case of Nike, do not realize the true value of business ethics and adopt it only when they have been caught in the act of violation of the latter.
Traders of all kinds, supermarkets, etc., for example, sell ethical products such as organic products just to enrich and increase the size of their customer. They assail the media with advertisements of bios products supposed to get consumers to rush to their selling point to buy.
- The consumer’s point of view about business ethics
To begin this part, we will introduce the point of view of three researchers who have mainly studied about business ethics and its conception today.
The former researchers are Yvon PESQUEUX and Yvan BIEFNOT who have conducted studies about business ethics in 2002. The two have concluded that the business ethics is negatively considered due to lots of defects.
Public opinion is now requesting an implementation of the contents of the speech and the actors themselves, whether actors of the education system or those from companies to be well aware of the glaring defects about business ethics: simplistic techniques translated into imposed procedures, social disasters, proven dishonesty of the leaders and their employees and large corporate failures[28]. According to these authors, these are the main defects that business ethics content and actors concerned by it should find immediate solutions to fulfill them.
It seems clear that business ethics does not really convey the image it wants to show. Even if it guarantees stability, respect of rules and good governance in a society, it appears to be too hard and difficult to asset. Pesqueux and Biefnot (2002) propose two main solutions to avoid it in their book entitled “L’éthique des affaires: Management par les valeurs et responsabilité sociale » edited in 2002 :
– A thorough understanding of the generic terms used in the field. It is indeed time to leave the surface of things. And besides, a leading company which, after long study, would not be able to take this step is not worthy of his position. This is contributing to reject miserable intellectual level that is one of management education. No argument of the type that have been defended in the name of efficiency simplistic face no longer fits the current disaster that directly affects the honesty of the agents of the company. If these agents, both during their studies and in their professional positions, are not able to make the corresponding intellectual investment, it means they are not worthy of occupying these positions and, if they occupy, they can only lead to disaster as their business seen in different case. There are no unnecessary theory and separated from the other effective practices. There are no simple and effective prescriptions. This book will therefore propose means of this intellectual investment. It differs in this respect from all who take for obvious concepts such as « values », « ethics », « transparency », etc…
– A perspective of the tools associated with business ethics and social responsibility of the company. This perspective is built on a description and analysis of these instruments without accepting that they are not as obvious. This instrumentation is now a disparate corpus it is important to accept it as such. It has not improved if we refer to the news and the evaluation cannot be done so far in terms of utility. Thus, it is time, again, out of the logic of how businesses see as a process of continuous improvement and mimicry deconstruct prevailing in this area. Procedures are introduced by mimicry because others are doing and ask for more because they carry meaning[29].
The third researcher is called Alain Anquetil, a professor of business ethics at ESSCA School of Management and researcher associated at CERES (Paris Descartes / CNRS University). He has recently made studies about the feeling assigned to business ethics in our society nowadays.
According to him, the concept of business ethics deals today with moral skepticism[30]. When we talk about business ethics, we are struck by the place occupied by moral skepticism in it. This is not a radical skepticism such as that which gave rise to skeptical doubt in ancient philosophy. Rather, it is an uncertainty about the possibility of acting morally and having a moral life in the context of business life.
The skeptical attitude has a positive dimension. It also corresponds to the etymological meaning of the word « skeptic », from the Greek skeptikos, « which examines, observes, thinks » (Godin, 2004, p. 1177). The skepticism also has a negative meaning.
This negative meaning is shared by many actors in the market economy, but also by many of those who observe from the outside. These observers include theorists business ethics. In this regard, it is interesting to note that one sometimes attributed to skepticism of observers the difficulty of establishing a constructive dialogue between stakeholders and ethics of academic affairs. However, one of the requests made by practitioners theorists is that they help to establish the criteria for conferring moral legitimacy to their practices. Or, put another way, they help to demonstrate that distrust – skepticism – inspired morality in business is inappropriate.
For theorists, as practitioners, the task is difficult. For skepticism about the role of ethics in business life takes many forms and some are particularly resistant to criticism. In what follows, we will focus on four of them. They belong to an ideology, a certain conception of human nature, the emphasis on ethical theory to solve practical problems and meta-ethics.
Anquetil (2012) identifies four types of skepticism linked with business ethics. The first form of skepticism in business ethics is ideological. It is based on a critique of the foundations of the market economy that takes place within a larger, social, economic and political denunciation of adverse effects of liberalism and capitalism. According to this criticism, the economic system itself is an obstacle to moral progress. Only a change of system could facilitate such progress. The purely ideological criticism remains marginal within the ethics of academic affairs, but some arguments can be attached, for example, those interested in the Marxist concept of alienation (Corlett, 1988 Sweet, 1993) or workplace democracy (McMahon, 2010)[31].
The second form of skepticism depends on a selfish concept of human nature. Considering that the motives of agents are basically selfish and have content for the pursuit of power and wealth, it seems difficult not to question the effectiveness of morality in economic life. This skepticism, for example, is rooted in the “Discourses of Machiavelli” which affirms the importance of the desire of domination of the governments and the desire of acquisition that motivates human actions. It is also inspired by authors such as Robert Michels (1911) who were interested in the modes of accession and retention of power of the ruling classes. And it is in this form of skepticism that fits the classical model of homo œconomicus- this imaginary human being only motivated by the satisfaction of his personal interest – although this model is called into question in Science social, even in the modern economy. This form of skepticism is present in business ethics[32].
It is found in writers who are interested in the amorality and immorality in businesses, for example Archie Carroll (1991). It is also present in the background of normative conceptualizations such as Donald Eric Reidenbach and Robin (1993), who seek to build a moral philosophy of marketing.
The third form of skepticism about the role of ethics in business life can be described as anti-theoretical. Bertrand Russell (1925), who did not believe in the existence of an ethical knowledge, gave a striking example. For him, the source of all human behavior is the desire, not moral injunctions that would be independent of any desire. There is no ethical theory to which we could refer to just make a decision regardless of our desire. « Suppose, for example, » writes Russell (1925, p. 115), « that your child is sick. Your love makes you want to heal him, and science teaches you how to do it. There is no intermediate stage that would only depend on a theoretical ethics. Your act is directly born from a desire adapted to an objective at the same time of the knowledge of resources[33]. »
It is important to note that Russell does not exclude any normative analysis – he prescribes to evaluate the likely impact of the options in any situation of choice. But he refutes the usefulness of ethical knowledge that is disconnected from desire.
Solomon (1992, p. 198) stated more generally that « a large part of the problem is that we do not absolutely know what should look like a theory in business ethics. » But he himself proposed the foundations of such a theory. In addition, many works of business ethics have attempted to construct theories used by practitioners[34].
That of Cavanagh, Moberg and Velasquez (1995), for example, explicitly aims to help clarify the sources of their ethical decisions and to justify those decisions. This is also the case with the approach proposed by Gene Laczniak and Patrick Murphy (1991), based on a series of tests that any that any legal decision must be submitted before being taken. The reject of the theory derives also from the place of moral relativism in the normative landscape of business ethics. Relativism « denies that any moral code has universal validity[35] » (Wong, 1996, p. 1290). Some theoretical efforts in business ethics have sought to « limit » moral relativism. This is the case of the theory proposed by Robin and Reidenbach (1993), which seeks to provide a « limited relativism », and of the famous contractarian theory called « social contracts[36]”
The fourth form of skepticism about ethics in business life is the meta-ethical, the branch of moral philosophy that focuses, among other things, on the meaning of moral terms, on the true value of moral statements and on the motivational power of ethical judgments. The question of whether moral statements can be true or false is probably an important factor in skepticism in the business world.
The opinions of these three researchers make us reconsider the respect devoted to business ethics today. The testimony of these authors show that business ethics isn’t seen as it should be, that is to say, as a regulatory authority which is responsible of the application and the obedience to the laws and code of ethics in a company. This leads more to believe that the difficulties and flaws mentioned above result primarily from a poor implementation of ethics rules in the enterprise.
In all cases, the views of these three researchers reflect the perception that consumers have of business ethics. The latter is considered as a myth, an illusion. Besides being used as advertisement, business ethics does not really seem applied, respected and regarded in its fair value. Ethics is a variable used to treat the image of companies to consumers. Indeed, companies use it mainly to comply with the requirements of consumers and prove that they are listening to them, without really taking into account its importance or its value.
However, actors like individuals, governments and organizations still care about ethics and use it for what it really is. We are going to discover these actors and their participation in the next part of our work.
- Actors using business ethics for what it really is
As we mentioned above, ethics is now a matter of advertising, a way to attract consumers. However, there are players such as associations, organizations, governments and individuals who recognize the value of ethics and use it wisely.
In addition to the companies that we will present in the section dedicated to players who are ethical nowadays, we also distinguish organizations such as the United Nations, UNICEF, the World Health Organization, the Organization World Environment, the International Labour Office, the Red Cross, Médecins Sans Frontières-, etc. Their actions are all in the perspective of social responsibility: their actions impact on society and allow its development.
The United Nations defends many human rights and work for peace. It is involved in the resolution of conflicts between countries between developing countries, contributes to the fight against poverty, against unemployment, terrorism, AIDS, etc. Created in 1945, just after the Second World War, it is composed of 51 members whose goal is the maintenance of international peace and security[37]. In addition, the UN promotes sustainable development, social and human development and helps to protect the environment. It helps victims of disaster by rescuing them.
The UN therefore carries humanitarian aid. It operates on a broad international field and carries four main aims:
- To maintain peace in the world;
- To develop friendly relations among nations;
- Helping nations to work together to help the poor to improve their lives, to overcome hunger, disease and illiteracy, and to encourage everyone to respect the rights and freedoms of others;
- Coordinate the actions of nations to help them achieve these goals[38].
For example, in 2010, WFP has provided assistance to more than 90 million people in 70 countries, including IDPs, refugees, AIDS orphans and victims of conflict and natural disasters such as floods, droughts and earthquakes[39].
UNICEF or United Nations Children’s Fund, specialized in child protection, is also an ethical actor whose actions consist mainly of the elimination of child labor. Present in 191 countries around the world, it was founded in 1946 and pays particular attention to everything that concerns the children from their schooling to their health[40]. On children’s health, for example, UNICEF has carried out extensive global campaigns of vaccination. Result, more than 20 million children have been saved over the past two decades: Smallpox has been eradicated since 1979 and the number of child deaths from measles has been divided by four over the past decade. In 1988, more than 350,000 people still contracted polio. Thanks to vaccination campaigns worldwide, that number had dropped to 222 cases in 2012 Aid is relatively inexpensive 50 francs enough to permanently protect 133 children against polio[41]
These two actors are the most active and the most sought internationally, however, the other actors mentioned earlier also carry out actions in favor of ethics. The World Environment Organization, for example, contributes to saving the environment.
The common thread between them is that they all work for a social cause. Their intervention affects the society or even an entire country. They act with the objective purposes and conduct social activities. This is social responsibility. Each of these actors contributes to social development and occurs when society is harmed or takes damage.
These actors do not only preach ethics as equal human rights or peace, they use it and respect it everyday. They save lives and allow peacemaking daily. These actors recognize the true value of ethics and act on its behalf. They are motivated by the virtues of ethics, not by personal interests. Our society relies on them.
III. The respect showed to business ethics nowadays
Ethics in enterprises covers several areas such as the respect for environment, the respect for human rights, the right to work etc. In this section, we will develop how actors in business ethics, that is to say, the manufacturers themselves apply this ethic. In the first subsection, we discuss the non-compliance with business ethics with examples of companies that do it.
The second sub-part deals with respect for ethical business and will present examples of companies doing actions in favor of this ethic.
3.1. Lack of respect for business ethics in Western countries and in several companies
3.1.1. The case of the Western countries
- The USA and the European Union in front of armed conflicts in Asiatic countries
Ethics, as we have stated in earlier, is a matter of morality and distinction between good and evil. Business ethics in enterprises is not just about compliance with the rules of conduct established within them, nor the good cooperation between the company and its partners, but also its image and its contribution to society. This is the social responsibility of the company. However, business ethics is not only a duty of companies but also of countries around the world.
If Eastern countries such as Japan are known for their ethical[42], Western countries are better known for their lack of respect for ethics. These Western countries advocating ethics do not even respect it, as it is the case since the civil war in Afghanistan and in Iraq broke[43]. This is a violation of human rights that the European Union and the United States; two targeted extreme powers in this field, apply under the pretext of eradicating terrorism.
According to China who has published two documents on human rights (the White Paper on Human Rights in 1991 and the Bangkok Declaration issued in 1993), Westerners use human rights as an instrument of pressure to achieve their economic and strategic interests. In this context, discussions relating to respect for human rights are becoming more and more difficult for the EU. For Beijing, getting involved in the affairs of other countries is derogation to its foreign policy.
However, Western countries tend to meddle in the affairs of other countries, as it is the case in the armed conflict in Afghanistan. The result is obvious: human rights are violated and abused. The army did not distinguish between civilians and terrorists, civilian victims of war were numerous.
In addition to the civilian victims, abominable practices such as the use of natural resources to finance armed conflict, rape by soldiers on women, the use of minors for work, etc. are well known and widespread crimes during the wars. These crimes reflect the non-respect of human rights and therefore a violation of ethics governing the society.
- The case of Brazil and the cleaning of the city of Rio de Janeiro before the 2014 World Cup
Brazil has made a real controversy during the preparation of the 2014 World Cup. According to the press represented by the online journals Tower of Babel and El Paίs, Brazil would have used a social cleansing by eradicating homeless in Rio de Janeiro.[44][45] Both sources cite the violence of the Brazilian state to the homeless who are simply « burned » with the intention to clean up the city to welcome the FIFA World Cup in 2014.
Homeless in Brazil are many. According to the Brazilian Institute of Geography and Statistics (IBGE), less than 1.8 million people live in the streets and squares of cities, and less than 25% of cities are implementing appropriate policies for these people[46].
The use of violence to settle the case of the homeless is not new since Brazil has a tradition where violence homicides are considered as private conflicts. The resurgence of these murders raises the issue of social cleansing. In 2009, the UN has warned Brazil about these practices.
During the last fifteen months, 195 murders of homeless were identified; most often, they were burned. In 2011, the police have already orchestrated a real « human cleansing » against the homeless by 142 victims. President Dilma Rousseff recently elected promised measures to fight against these murders at this time but has done nothing substantially up until now.
Besides the murder of homeless in Brazilian slums, the case of the « favelas » is also a fact observed during the preparation of the World Cup 2014, even if it was hidden quietly. Brazil, anxious to clear its image of dangerous country to please its tourists and incite them to come in large numbers to attend the world Cup, has organized a huge displacement of nearly 1.7 million people throughout the country[47]. As a reminder, the favelas are a range of several neighborhoods where illegal businesses are successful. They are inhabited by wealthy as much as poor people but the poor ones are more recrudescent.
People who occupy these favelas have housing problems since it is not recognized, specifically their address. So they settle illegally and earn a living illegally. No specific measures are supported by the Brazilian government against them, for against; measures to destroy these favelas to build the hotel and sports complex were initiated, and ignored[48]. The state, to defend itself, passed this act of violence as an act of struggle against crime.
3.1.2. The case of several enterprises
- The case of Nike
Among the companies that have been caught in the act by making children work for them, the case of Nike has been the loudest. Nike is present in 51 countries worldwide and has 800 suppliers and 704 subcontract factories where the majority is implemented in Asia. The use of children to make shoes in factories subcontracting in Asia is a practice adopted by Nike since the 90s. This allowed it to make a big production while saving on the cost of production that has decreased due to the underpayment of the children.
Nike is the multinational leader in the world of sporting goods with 40% market share of sports shoes in 2000, before Adidas (15.1%) and Reebok (10.9%).
The company was founded in 1964 in the United States by Phil Knight and Bowerman Paul, under the name Blue Ribbon Sports (BRS). Unlike Adidas, whose products are manufactured in developed countries, high cost of labor, Phil Knight thinks he can penetrate this market by producing sporting goods in countries with low-cost labor, namely Japan[49].
The firm established with an initial investment of $ 1,000 begins to import high quality shoes manufactured by the Japanese company Onitsuka Tiger. In the early 1970s, BRS began designing her own line of shoes, manufactured by Japanese subcontractors, including Nippon Rubber and Nippon Koyo. In 1972, the company achieved a turnover of around 2 million[50].
This year also marks the launch of the famous Nike brand, the company changing its original name Nike Inc. in 1978 In 1974, the firm has 250 direct employees and generates annual revenue of $ 4.8 million. Due to the macro-economic environment (including oil crisis) and economic development of Japan, Nike began to look for other cost countries workforce lowest to manufacture its shoes, such as Korea, Thailand, China and Taiwan. At the same time, Nike opened two plants in the United States.
Given the rising costs in the United States and Japan, the multinational firm its American factories and moving production to other more profitable Asian countries, some countries, such as Korea have even set up incentives for the development of sporting goods industry. In 1980 the company went public, in 2700 direct employees and generates annual revenue of $ 269 million. By 1982.86% sneakers for Nike manufactured from Korea and Taiwan.
The economic development of both countries chipped away at their attractiveness due to the increase in labor costs. Although other factors come into play such as access to raw materials and operation of differential tariff rates, labor costs remain the main explanatory reason successive relocations. Labor costs reflect both the direct costs of labor and benefits of the regulatory system. Nike gradually relocate again its productive activities to subcontractors in other countries of Southeast Asia, such as Indonesia and Thailand, and then to China and Vietnam. In 1986, sales of Nike Inc. pass the helm of a billion dollars and in 1997 reached a record level of $ 9.2 billion along with record earnings of $ 795 million
The 1980s and 1990s spent the internationalization of the brand continues to increase its market share outside of the United States, particularly in Europe, Japan and the Soviet Union. Multinational now operates in about 120 countries. On centered sneakers market, the company is redefining its market by extending it to all sports items, which are commonly distinguished footwear, clothing and other equipment. Another feature of Nike is its constant search for innovation and technological advances, allowing it to maintain its leading position.
According to its founder and current CEO, Phil Knight, the products have a life cycle of seven years, forcing Nike to constantly innovate to stay ahead. For example, in 1980, Nike sold 175 different styles of shoes against 772 in 1990 and 1200 styles in 2000 (Locke, 2001). This technology leadership (like the Air Jordan system) is accompanied by an aggressive marketing (as the slogan « Just do it ») often using sports stars such as Olympic medalist Carl Lewis, tennis player Andre Agassi, six of members of the basketball team winning Olympic Dream Team, the phenomenon Michael Jordan and golf superstar Tiger Woods[51].
Multinational indeed developing the outsourcing of its manufacturing operations almost exclusively in countries characterized by low labor costs and where alternative job offers are very limited. Workers are thus very vulnerable to exploitation. Governments of Asian countries welcome with open arms (as evidenced by several emergency measures for them) foreign companies which provide their workers a job and a salary. Their vulnerability to employment, demographic and cultural profile make them more accommodating and less assertive vis-à-vis the ethical problem.
The workers and the government can even defend the concept of low costs in order not to compromise their competitive advantages, to encourage foreign companies to invest in their country and so promote their economic development. The demand for improved ethical conditions would likely increase their costs of labor relative and expose these countries to the risk that their only source of competitiveness reduced or eliminated. Offshoring activities of the multinational to other more competitive countries are therefore very credible, especially considering the changing locations of subcontractors of Nike[52].
Asian countries where the group has a strong presence and exercises his misdeeds are South Korea, Taiwan, China, Indonesia and Pakistan. In 1997, all the media published a photo of a Pakistani boy trying to make a soccer ball of that mark. This was the catalyst for a major debate on all working conditions in companies employed by the firm as subcontractors.
Nike, which has branches scattered around the world, employed children aged 14 based in its factories in Indonesia, admitted Phil Knight on an interview with Michael Moore on behalf of The big one, a documentary directed by the latter[53]. In Indonesia, for example, a worker is paid about $ 3 a day while Nike resells shoes from 50 to 100 dollars apiece.
In addition, Nike did not just use these people to make clothing. It abused them and made them objects. These workers had to work up to 12 hours a day. They wore out hands, sight and health[54]. Among the wrong practices used by Nike, the firm was accused of non-compliance with certain international conventions like freedom of association, working conditions, forced labor, child labor and wage issues[55].
To face these difficulties, Nike has adopted three strategies that will be resumed in the following picture:
1st strategy: the strategy of inactivity | 2nd strategy: from inactivity to reactivity | 3rd strategy: Towards the development of proactive strategies and Preactive in the environmental field? |
The first real answer Nike is idle strategy. The multinational is content to dismiss the various ethical criticism by pointing out that its subcontractors are foreign companies with which it simply has a contract to produce finished products (Katz, 1994). Production activities affected by the ethical problem is the responsibility of subcontractors so independent companies that are not under its control have no commitment with it. Nike argues that if abuses are found, they involve subcontractors but not Nike itself. Nike also tries to defend its companies insisting that they merely adapt to local laws and standards they try to apply in their own environment, while recognizing that this is not a perfect success. Nike also says that workers’ wages of its subcontractors are higher than those of other firms. The isolated examples of abuse identified by the media are not significant of widespread abuse policy. Nike and its sub-traitors do not violate the law on wages and if they are different, this is due to the difference in environments between countries. On the problem of low wages for workers of subcontractors, Nike is also justified on the grounds that the terms offered by its subcontractors are much better than many other jobs in the countries concerned. Finally, Nike insists that to maintain productive activities in these countries is almost an ethical activity, source of economic development and improvement of living standards (Kahle et al., 2000). In countries with a low level of development, the arrival of multinationals like Nike helps to create an environment that encourages growth and economic development. According to an estimate reported in Kahle et al. (2000), 5% of Vietnam’s gross domestic product is made by Nike, which operates in this country since 1995, Japan, Korea or Taiwan can be cited as examples of countries where the Group of multinational helped create an environment and infrastructure necessary for economic progress. |
Following the finding of ineffectiveness of its strategy of ignorance, Nike has progressively adopted a reactive strategy. Indeed, rather than avoidance, Nike admits its potential role and seeks to respond to various criticisms, bringing concrete and tangible to the ethical problems of his subcontractors elements. Although the exhaustive description of the different reactions of the multinational is rich in lessons, we opted for the reminder of some key events
By the end of 1992, Nike has established a code of conduct in the form of a document called « Memorandum of Understanding ». This document requires subcontractors Nike, compliance with labor laws in force. Thus, they agree not to use forced labor or child labor, to apply the laws in force in the country concerned with the inclusion of one day off per week and a maximum of sixty hours per week. The companies also agree to recognize the right of workers to freedom of association, and not to practice any form of discrimination. Subcontractors undertake to train employees on their rights and adhere to environmental standards Nike.
In 1998, Nike says the firm PriceWaterhouse Coopers (PwC) mission to audit each year its 400 subcontractors to ensure its effective implementation (Seuret 2001). Since then, Nike has taken this step to demonstrate its commitment to transparency.
In late 1999, the multinational has made public on its website, the coordinates of the 42 factories that produce Nike logo products seven American universities.
In early 2000, the multinational has given an inspection mission to students from these universities, with, the key, the publication of their report on the group’s website. Students are asked to prepare a report detailing the working conditions of workers and make their conclusions. They visited a plant quarantine Korean, Canadian, Caribbean and El Salvador that make products with the logos of their universities.
In April 2000, Nike launched the « Transparency 101 » which is in the same line program: Nike’s commitment to publish on its website the audit reports of PwC at its subcontractors. In late October 2000, the multinational, however, had yet made public the audits in 53 plants in North America. Since then, were added the 25 plants in South America, but it still lacks factories in Asia, those that have attracted the most criticism. The fact remains that the establishment of these missions has already led to significant improvements…. |
Faced with criticism still omnipresent, Nike tries to anticipate demand or in some cases, helps to cause some changes in its ethics policy. Nike slowly beginning to develop proactive strategies and pre-activated. The principle of these strategies is to enable companies to not undergo the change, or merely anticipated. They seek to generate some configuration and act to bring about the desired change (Godet, 1991). Ethical and environmental issues are considered strategic priorities of the company and management is integrated into the overall management of the company. These proactive behaviors may be intended to influence legislation, generate some demand or impose standards that competitors will disadvantage. Proactive firms transform constraints into competitive instruments where the innovative firm has a substantial lead over its competitors sometimes. In contrast to Nike, which is usually found in a charged position, some companies have opted firmly for anticipatory strategies, others downright adopting strategies initiation of change. For example, Body Shop, cosmetics manufacturing company, has built its reputation and its reputation around its commitment to the welfare of animals. |
Nike’s strategy in response to critics about non-ethical proceedings. Source: Gasmi, N. and Grolleau, G. (2005). Nike face à la controverse éthique relative à ses sous-traitants, Lavoisier, Revue française de gestion, n° 157, pp. 115-136, Pages : 240, DOI : 10.3166/rfg.157.115-136.
To remedy these problems, Nike has developed a model and contracts ensuring that the supply chain does not lead to child labor or to work in poor conditions (about wages, hours and even violence). The firm now has a code of conduct between the instructing party (MNF) and subcontractors who make the products[56].
Nowadays, Nike has recovered but is among the enterprises judged less ethical in the world. According to a survey conducted in Novethic France in March 2002, Nike was the most cited « unethical » brand (8.7%), of the entire socio-market while Adidas had a good image.
The leading position of Nike in the world market, the reputation of its brand and its products, its profitability and its visibility allowed actors of social advocacy to make of it a symbol of the lack of ethics and use its market power of sports goods as leverage their strategies of protest.[57]
- The case of Nestlé
Nestlé, a leader in the food industry, is a Swiss company founded in 1866 in Vevey. It has received the distinction of the first food industry worldwide in 2012, and has several offices throughout the world and launches the use of water, coffee, milk, etc. Nestlé also produces chocolate and draws raw materials thereto in Côte d’Ivoire. So, it moves part of its activities, especially the activities concerning the collect of cocoa, in Côte d’Ivoire.
Nestlé then uses child labor to make this collect. This is a strategy to have a cheap and plentiful labor. However, children employed by the firm are likely to find effects of their work on their health. They are exposed to risks in all phases of the production of cocoa.
These risks include injuries caused by machetes during land preparation, maintenance of planting and harvesting of cocoa beans; the health damage due to overexertion during planting and transplanting plants and transport of heavy loads; and exposure to hazardous chemicals during application of fertilizers and pesticides[58].
Child labor is unethical business; Nestlé has been the subject of an exclusive survey of its presence in Côte d’Ivoire and its exploitation of cocoa beans by Fair Labor Association in 2012. Three visits in the field allowed the assessment team to visit 87 FLA plantations and interview a representative sample of 466 men, women and children in these plantations. In total, over 500 interviews were conducted during the evaluation[59].
According to the survey, the firm employs indeed children. The working condition of these children is subject to risks that we have outlined earlier. It turned out that child labor is irrevocable, although it should be abolished, according to the FLA.
Nestlé contributes to the opening of the economy through the creation of jobs for the inhabitants of Cote d’Ivoire; however, the group will improve the working conditions of these and other workers in the field. Nestlé is committed to contribute to the eradication of child labor in Côte d’Ivoire through the Cocoa Plan, in partnership with other major exporters such as Cargill and Hershey. In 2013, 200,000 children were victims of child trafficking involved in child labor. Their working conditions were abominable; their work was accepted and even sought by their parents. They were underpaid or unpaid, malnourished and exposed to hours of work not in accordance with their fragile bodies[60].
In response to the investigation of the FLA, Nestlé created the « Nestlé Cocoa Plan: Improving the lives of cocoa farmers and the quality of their products ». This program has already paid off: over 6,000 cocoa farmers in Côte d’Ivoire were formed in 2012; over 800,000 cocoa seedlings of better quality were distributed. By 2015, the goal of Nestlé is to train 24 000 farmers in the country, and to provide three million additional seedlings.
In March, the company opened the first school it built for a cooperative of the Nestlé Cocoa Plan. In the next four years, Nestlé and its partner, the World Cocoa Foundation, plan to refurbish 40 schools in other communities in need[61].
Closely analyzing the case of these examples, we realize that ethics is an illusion. Indeed, in the case of Nike and Nestle companies, it took them to be accused of child labor and that their misdeeds have been exposed to make them put in place genuine ethical strategies. In their case, and in the case of many other companies of their size, production and competition matter most.
Offshoring is primarily chosen for optimization of productivity, for lowering production costs and increasing production volume at short time. So, these firms locate poor countries where labor is abundant in agreement with the state in a context of economic recovery and job creation. However, their thirst for profit and profitability takes over and employees are mistreated, underpaid, not paid, etc. Ethics is therefore replaced by profit and unethical methods such as the use of children, the poor working conditions of workers, wages at a lower cost, in short, the violation of human rights arise.
The current reality has therefore reported a lack of respect for business ethics, not only by big companies but also by countries such as Brazil and the Western Countries. Violation of human rights is the biggest flaw in the corporate social responsibility and of the state, as we have seen in this section. However, there are actors who actually respect the ethics they preach, as we shall see in the next section.
- Actors that respect business ethics
There are many actors or organizations that undertake real actions and long-term commitment to ethics, especially regarding the protection of the environment. Actors from the automotive industry are the most active on the issue and offer green labels or use of recycled plastic in the equipment. We will see two examples in this regard: the Peugeot group and its Blue Lion and automotive manufacturer that use recycled plastic to equip cars program.
- The case of Peugeot and its Blue Lion Program
Peugeot, the French leader on the international stage in the construction of car, but also many other means of transport such as motorbikes, was established in 1896 and is headquartered in Paris. With branches scattered throughout France, in Europe and outside of Europe, Peugeot now aims to reduce the adverse effects of vehicles on the environment. So, it created the Blue Lion program with a dual objective: to reduce emissions of polluting gases and to reduce emissions of greenhouse gases, mainly carbon dioxide[62].
Peugeot therefore released many vehicles from the Blue Lion label that promotes reduced carbon dioxide emission compared to normal vehicles. Blue Lion has two components:
- Identify the most environmentally friendly vehicles
- Prioritize clean and available technologies from now[63].
The Blue Lion Label distinguishes models of vehicles that emit less CO2[64]. Several car models are equipped with the Blue Lion label, such as the Peugeot 208 Blue Lion famous for its emissions limited to 87 g / km CO2 and its reduced 3.4L / 100km consumption[65]. In order to integrate the label Blue Lion, the Peugeot cars must meet the following criteria:
- Have CO2 emissions less than or equal to 130 g / km or running on CNG
- Being manufactured in a firm certified ISO 14001 (a quality standard that guarantees that an industrial product is, in a manner, consistent with legal standards for environment).
- Be recoverable at 95% at end of life (ie materials, if recovered, can be recycled[66]).
Besides the Blue Lion program, Peugeot also fight against air pollution by releasing models working with electricity like cars (hybrid or electric cars), two-wheelers (scooter e-Vivacy , electric scooter, electric bike, etc.)
Currently, the actions taken by Peugeot for the commitment to the environment through Blue Lion have already borne fruit:
- Since 2000, Peugeot has sold more than 1.7 million passenger cars equipped with DPF (Diesel Particulate Filter).
- Since 2001, nearly 1.1 million cars emitting less than 120 g / km of CO2 have been registered by Peugeot in Europe (14 countries).
- In 2007, 40% of private cars registered in Europe by Peugeot emitted less than 130 g / km of CO2[67].
- Automotive suppliers and recycling plastics
Ethics also means respect for the environment. Some actors in the automotive industry such as Peugeot and automotive suppliers have understood this concept. Automotive manufacturers use plastic material, including plastic bottle recycled for manufacture of automotive equipment. Such is the case of Faurecia, PSA, Inoplast, etc. which are devoted to the manufacture of polymers from recycled plastic[68].
The polymers are thermoplastic materials, thermosetting plastic and elastomeric compounds. Their use is appropriate for automotive suppliers who are environmentally conscious and are working in the context of sustainable development. The polymers also help reducing CO2, making their manufacture and their use more recurrent.
Faurecia, 5th automotive supplier in the world in 2010, recycles about 290,000 tons of plastic (specifically thermoplastic polypropylene) per year to build internal and external systems to cars to enable them to reduce their carbon dioxide emissions.
In 2010, the goal of the group was that the cars depending on their size emit no more than 120 to 140 g / km of CO2. More vehicles are heavy; more they emit a large quantity of carbon dioxide[69]. The role of Faurecia is to build polymers using recycled plastic that can replace many types of equipment on the car, both external and internal. The lightness of the plastic makes the car lighter and therefore reduces CO2 emissions[70].
PSA has also developed civic cars with lower CO2 emissions. The group presented its introduction of green materials policy in vehicles. Currently, the weight of a vehicle is allocated on average to 70% metal, 5% to 20% and fluid polymer representing 150 to 200 kg of material. Until 2007, 6-7% of the 20% polymers were green materials. Since 2007, PSA has a real desire to bring in vehicles of green materials with the goal of reaching 20% of green materials from polymers in 2011 and 30% in 2015.
The company has created a standard destination for suppliers that define a green material. Three types of materials are covered, recycled materials (from auto parts recovered at the end of life, but also from street furniture or PET bottles), natural fibers (used in mixture with a polymer at a rate of up 80%) and biomaterials (polymers from renewable resources)[71].
These examples show us that despite the current trend that leans more towards the lack of respect for business ethics, there are still actors who favor this notion. In the cases we have cited, the motivations were neither subjective nor financial. The groups mentioned earlier have taken actions to the environment by creating green labels or recycling the plastic to protect the environment. Reducing CO2 emissions is the goal; the actions for the protection of the environment are also ethical actions.
To conclude this section, we will discuss the concept of competition. In today’s society where globalization reigns, competition is an obstacle and a hindrance to business ethics. Indeed, competitors use only ethics for purposes of competition or completely forget to respect it. We will dwell on this in the next section.
- The increase of the competition in business ethics
Competition is well known in the world of business ethics. Regulations governing the conduct of business are established in many countries which are the United States and European Union. Companies establishing themselves in these countries must respect this regulation which includes chapters on competition and the application of antitrust law in business.
According to Dion (2007: 118), “each company must have rules on anti-competitive agreements with competitors: it is usually prohibits competitors from agreeing on discounts, credit terms, transport allowances or other conditions of sale. Agreements to fix prices or agreements on production volume with the competitors are often considered unethical because they prevent free competition. Any mounting of a specific price at which competitors should comply is considered as an act of unfair competition[72].”
Competition is also governed by a code of ethics. Competitors entering the competition should advocate free competition which aims to allow all actors to establish themselves and prosper despite competition. To understand the phenomenon of competition between firms, we must first understand what free competition and unfair competition mean.
Free competition is an economic system « where prices are not controlled by the government, hence the creation of private enterprises is free and where the government essentially involve to ensure the free play of competition between firms[73]. » In free competition, competitors are not assigned at prices contracted by the state but are free to set the rates they want. This allows competition to deploy, price being one of the most significant variable in the attraction of consumers.
Unfair competition is defined as « the act of a producer, a trader seeking to harm a rival in the same industry, in particular to take its custom by dishonest means, it is a criminal act.[74] » Unfair competition thus refers to the use of dishonest acts to divert customers to of a specific firm or a seller in order to make them becoming our own customers.
There is a theory of unfair competition « aimed primarily at protecting the interests of enterprises in the competition[75]. »
The code of business ethics is a struggle against this unfair competition. Therefore, stakeholders must respect their commitments and implement the code to avoid damaging competition. Ethics in the competition is clear and well defined: whoever brings dishonest acts against its competitors is guilty of unethical acts and can be punished accordingly. In business ethics, « the association of a company with a competitor in order to avoid having to do business with a seller or buyer in particular is generally considered unethical. Agreements between competitors on sharing consumers (current or potential) or in markets and sales territories are regarded as unethical because they prevent free competition, even if they have not been a written contract.[76] »
According to the normative stakeholder theory in business ethics, a company cannot create a partnership with his competitors. This is what is called collusion or complicity between rivals. Competition is a moral obligation of enterprises: to make profit, companies must compete: « Companies are morally obliged to compete and they are morally prohibited from agreeing with their competitors in order to optimize profits. This obligation arises from the social benefits of competition between firms and highly negative effects observed in the absence of competition.[77] »
Many other acts are considered part of unfair competition, « imitation, denigration, disorganization, parasitism, […] piracy[78]. » Ethics punishes those practices that competitors use to allocate customers of their competitors. Ethics condemns unfair competition knowing that « the benefit may not result in savings over other companies[79]. »
The competition law is inseparable from antitrust law and dismisses unfair competition. We found two examples of companies integrating competition law and antitrust law in their code of ethics:
- Molex is a company specialized in the construction of electrical components for the electrical interconnection products and systems established in 1938 and headquartered in Lisle, Illinois, USA. With an international presence, the group built a code of conduct and ethics including an antitrust law and competition law which we will presented below:
Molex complies with competition law in many countries and antitrust in the United States, these laws to protect the global market against any competition unfair. The law prohibits any agreement to prevent the free competition, as agreements collusion on prices and dumping to eliminate competitors.
Some agreements are almost always an offense competition law. Never exchange of information with competing for: ■ pricing, specifically set minimum prices or maximum, or « stabilize » prices; ■ set conditions regarding prices, pricing formulas, the promotions, credit terms, etc. ; ■ divide markets, customers or sectors geography; ■ limit production; ■ rig tenders, including tenders falsified; ■ boycott a competitor, supplier, customer or distributor.
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Source: Molex (2007) Conduite des affaires et éthique de MOLEX, p.11
- SNC-Lavalin Group, a global group specializing in construction and engineering, founded in 1911 and headquartered in Montreal, Canada, also has a code of ethics and business conduct including a mention on competition and antitrust law:
In SNC-Lavalin, we must all adopt fair competitive business practices accordance with the legislation governing antitrust and competition issues.
Although the definition of « collusion » differs from one jurisdiction to another, the term refers to a secret agreement between two or more parties for fraudulent purposes, unlawful or misleading.
The privacy laws differ from one country to another. For instance, it is forbidden to discuss or enter into agreements with competitors have the effect of:
Ø fix or fraudulently control prices or terms; Ø restrict competition or transactions with suppliers; Ø restrict the export or import of goods supplied by SNC-Lavalin; Ø share or allocate customers, markets, territories or Ø production programs between SNC-Lavalin and its competitors; Ø influence resale prices demanded by our customers; Ø introduce artificial bids in response to a call for tenders.
We must not seek to illegally obtain information competition by using industrial espionage, corruption, theft or wiretapping. In addition, we must not communicate information we know to be wrong about a competitor |
Source: SNC-Lavalin (2014). Code d’éthique et de conduite dans les affaires, p.10.
In the two examples below, we can observe a refusal and revocation of unfair competition in business ethics. However, the current reality is quite opposite to that since ethics has become an object of competition. Competition becomes a default for ethics. Two cases can be observed:
- The use of ethics as an object of competition
In this case, ethics is seen as a way to put a stop to competition. Production of ethical products and respect for ethics in terms of business are only illusions, a way to attract consumers. Ethics is therefore not used in order to satisfy consumers but rather as a bait to attract them in the greatest number. Companies advocate ethical values only to stand out from other companies.
It may therefore happen that the products manufactured do not really follow the rules of ethics. Products labeled organic, for example, may still contain chemicals at low doses or at concentrated dose, but firms distort the notice on the package. Customers then leave mislead by the term « natural » on the product’s package while it is not really bio.
- Competition, an obstacle to ethics
On the other hand, some competitors with the thirst to make profit at the expense of competitors may not respect the rules of ethics at all. Globalization nowadays increases competition between international and domestic companies. Domestic companies, with a national reputation only, strain under aggressive competition from international companies.
Indeed, if the Competition Law provides that the competitors do not have the right to make unfair competition which involves the ownership of competitors’ customers through dishonest means, the current situation shows that the code of ethics is simply no more respected by certain companies. They do not hesitate to use their international fame to crush domestic firms. Being ethical is no longer interesting for them; they rather focus on strategies to enable them to exclude competitors.
These are the companies from emerging countries with low labor costs that exert the most aggressive competition regardless of ethics[80]. We note that the principle of ethics disappears under the influence of competition as firms primarily prefer to enrich themselves and to rule the competitors rather than worrying about ethics. Consumers are becoming victims of this unfair competition because they cannot consume products certified as ethical but just become pawns of companies who have fight for having them.
- Synthesis and feeling during the elaboration of the work
By analyzing the meaning of the term « business ethics », we realize that it encompasses an entire community including government, industry, citizens, etc. Business ethics, primarily based on the distinction between good and evil or the concept of Paul Ricoeur, was introduced in companies and society to ensure the satisfaction and recognition of social responsibility.
In other words, business ethics means that the state, firms and all actors involved in its implementation should first consider the impact of their activities to the society before realizing them. If society can suffer from their actions, they are wrong and do not apply ethics. In turn, if society takes advantage and moves through them, these actors fulfill their ethical role.
It is in this context that business ethics has been added to the code of conduct of enterprises: so that every employee, every leader, every actor involved does not forget his social responsibility. Our present study attempted to determine the role of business ethics in the contemporary world. Without being exhaustive, the development of our work has nevertheless allowed us to see that ethics is only one tool among others, used to increase sales and attract more customers.
While some actors still respect ethics, the most are nevertheless guilty of its violation. These actors do not figure out the real meaning and usefulness of ethics at its fair value. This may result from selfishness; lust for power and lust for defeat the competition, a desire to better the image of some firms in front of the consumers, etc. The point is that these consumers are increasingly looking for more ethical products and the companies provide them without thinking about their health but about the benefit increased through their sale.
Thus, the development of this thesis has allowed us to better understand what ethical business currently represents. We learned a lot about the concept and were able to confront theory with practical reality through the examples that we have provided.
In our opinion, we are on the side of Anquetil (2012)[81] which proposes that business ethics has a huge default implementation. The infrastructure built in this direction may be low, stakeholders may not understand the concept, leaders may not spend time explaining and exposing the real values of ethics but, in all case, ethics is surrounded by many defects to be corrected to make it to efficiently back into the modern world.
Conclusion
At the end of our work, we find that business ethics is partially respected, confirming the thesis of moral skepticism of Anquetil. Indeed, the great number of institutions, states, organizations, businesses or individuals who do not respect the ethics confirms this skepticism because it is difficult to believe in a rise of this concept now.
Business ethics that promotes positive and honorable values is only one instrument among others to appropriate the power to dominate competitors or to make profits illegally, etc. Ethics has become an instrument of selfishness, an advertising tool to reach consumers and to meet their requirements without respecting the true foundations of this concept.
Two trends have been revealed here: that of those who believe in ethics and practice it (UN, UNICEF, etc.) and that of those who do not respect ethics for the benefit of their personal interest (World Cup footballs preparation in Brazil in 2014, child labor by Nestlé in Côte d’Ivoire, etc. We have also seen that among the unethical practices adopted by some governments and companies, violation of human rights is the most significant. It is usually accompanied by a thirst for profit, which is subjective. However, business ethics is an objective concept, almost selfless. Actions taken by the actors in favor of ethics such as Peugeot and its Blue Lion program, in fact, are almost focused on preserving the environment.
In sum, the current world denigrates ethics when it comes to competition or personal gain. Ethics therefore does not exceed selfishness, which leads us to believe that ethics is used only when it benefits the actors who use it but it is forgotten when it concerns the welfare of others. Finally, ethics has lost its former value which was to act for the good of society.
What actions should we therefore lead to restore the true values of ethics? Which actors should be mobilized in this sense?
Methodology
Before we begin our writing, we have identified the issue and the problem. Then we compiled a literature review with a list of books, electronic reference, archives, scientific and academic articles, etc. likely to be useful to us in developing our work den. To do this, we essentially focused our research on the part of academic browsers such as Google Scholar, we also consulted academic library online (Sudoc Dalloz site of the Catholic University of Leuven, etc.)
Once the references identified, we began to think about a draft plan. Once the plan materialized, we started the actual writing. The contents of memory results from the literature review we have chosen. Then, we have developed some hypotheses from this literature revue and we have confronted them with the data collected. So, we have obtained the actual trend about the consideration of business ethics in the contemporary world.
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Freeman, R. E. (1984). Strategic Management : A Stakeholder Approach, Pitman, Boston.
Gallet, C. et Appert, D. (2010). Rapport d’Etonnement : Les matériaux polymères et le secteur du transport, Ardi Rhône-Alpes.
Gasmi, N. and Grolleau, G. (2005). Nike face à la controverse éthique relative à ses sous-traitants, Lavoisier, Revue française de gestion, n° 157, pp. 115-136, Pages : 240, DOI : 10.3166/rfg.157.115-136.
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Pesqueux, Y et Biefnot, Y (2002) : L’éthique des affaires: Management par les valeurs et responsabilité sociale, Éditions d’Organisation, pp.12-13. (our translation)
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Sylvander, B. révolution du marché des produits biologiques : tendances et perspectives, Courrier de la Cellule Environnement de l’INRA n’ 18, p.5.
Virassamy, G. (2008). L’entreprise face à l’éthique du profit : travaux du CERJDA, volume 7, Editions L’Harmattan.
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[1] Dion, M. (1998). Investissements éthiques et régie d’entreprise : entre la mondialisation et la mythologie, Médiaspaul, p.7.
[2]Centre national de ressources textuelles et lexicales (CNTRL) (2012). Ethique. Available at http://www.cnrtl.fr/etymologie/%C3%A9thique, accessed June 25, 2014.
[3] Ibid.
[4] Dictionnaires de français Larousse. Ethique adjectif. Available at http://www.larousse.fr/dictionnaires/francais/%C3%A9thique/31388, accessed June 25, 2014.
[5] Dictionnaires de français Larousse. Ethique nom féminin. Available at http://www.larousse.fr/dictionnaires/francais/%C3%A9thique/31389?q=%C3%A9thique#31324, accessed June 25, 2014.
[6] Moreno, R. C. (2005). La construction de l’éthique de l’entreprise ou éthique des affaires. Première partie. Les formes à partir de l’adoption de l’éthique, p. 144.
[7] Bardon, M. Et Kerhuel, C. (2009). Un regard sur l’éthique des affaires, available at http://www.legavox.fr/blog/corentin-kerhuel/regard-ethique-affaires-1319.htm#.VAJRu6hX478, accessed on 23th july 2014.
[8] Ramonjy, D. (2009). Ethique et Responsabilité Sociale des Organisations du Commerce Equitable, Management Prospective Editor, Management et avenir n° 29, p. 208-227.
[9] Ibid.
[10] Bardon, M. Et Kerhuel, C. (2009). Un regard sur l’éthique des affaires, available at http://www.legavox.fr/blog/corentin-kerhuel/regard-ethique-affaires-1319.htm#.VAJRu6hX478, accessed on 23th july 2014.
[11] Ricœur, P. (1992). “Ethique et Morale”, Soi-même comme un autre, Seuil, Paris.
[12] Ramonjy, D. (2009). Ethique et Responsabilité Sociale des Organisations du Commerce Equitable, Management Prospective Editor, Management et avenir n° 29, p. 208-227.
[13] Deroy, X. (2009). « Qui contrôle l’éthique des affaires dans les situations d’évènement ? », Management international, vol. 13, n° 2, 2009, p. 11-22.
[14] Naudet, J-Y. (1997). Éthique des affaires : de l’éthique de l’entrepreneur au droit des affaires, Actes du colloque organisé par le Centre de Recherches en Éthique Économique et des Affaires et Déontologie Professionnelle de la Faculté de Droit d’Aix-Marseille, Librairie de l’Université.
[15] Baechler, J. Les devoirs- L’éthique des devoirs, Académie des sciences morales et politiques.
[16] Centre de réadaptation INTERVAL (2014). Code d’éthique et de déontologie des administrateurs du Centre de réadaptation InterVal, available at http://www.centreinterval.qc.ca/fr/a_propos_de_nous/conseil_d_administration/code_d_ethique_et_de_deontologie.asp, accessed on 25th july 2014.
[17] Freeman, R. E. (1984). Strategic Management : A Stakeholder Approach, Pitman, Boston.
[18] Allouche, J. et Charpateau, O. (2012). Ethique et parties prenantes. Les enjeux philosophiques, Encyclopédie des ressources humaines, n°17.
[19] Larousse.fr: Etre partie prenante, available at http://www.larousse.fr/dictionnaires/francais/partie/58387/locution?q=partie#158244, accessed on 2th july 2014.
[20] Boatright, J. (2006). Quel avenir pour la gestion des parties prenantes ?, LES ATELIERS DE L’ÉTHIQUE, vol. 1 N°1, art. 42 -54.
[21] Wonderful full Monde (2009). Qu’est-ce qu’un produit éthique ?, available at http://www.wonderful-monde.com/produits-ethiques-ecologiques-equitables.htm, accessed july 2 th, 2014. (our translation)
[22] Agence Bio (2012). Baromètre de consommation et de perception des produits biologiques en France, p.7.
[23] Sylvander, B. révolution du marché des produits biologiques : tendances et perspectives, Courrier de la Cellule Environnement de l’INRA n’ 18, p.5.
[24] Ministère de l’écologie, du développement durable et de l’énergie (2013). La consommation des produits bio a progressé en France en 2012, available at http://www.developpement-durable.gouv.fr/La-consommation-des-produits-bio-a.html, accessed on 27th june 2014.
[25] Ibid.
[26] Ibid.
[27] Agriculture.gouv.fr (2011). Quels sont les produits bio les plus demandés en France?, available at http://agriculture.gouv.fr/Quels-sont-les-produits-bio-les, accessed on 27th june 2014.
[28] Pesqueux, Y et Biefnot, Y (2002) : L’éthique des affaires: Management par les valeurs et responsabilité sociale, Éditions d’Organisation, pp.12-13. (our translation)
[29] Ibid.
[30] Anquetil, A. (2012). L’éthique des affaires et le scepticisme moral, RIMHE, Revue Interdisciplinaire sur le Management et l’Humanisme n°1 – NE – mars/avril 2012 – Ethique et Organisation, p. 71.
[31] Ibid.
[32] Ibid.
[33] Ibid. Our translation).
[34] Ibid.
[35] Ibid.
[36] Ibid.
[37] ONU: A propos de l’ONU, available at http://www.un.org/fr/aboutun/index.shtml, accessed on 30th july 2014.
[38] ONU: A propos de l’ONU, available at http://www.un.org/fr/aboutun/index.shtml, accessed on 30th july 2014.
[39] ONU: Action humanitaire, available at http://www.un.org/fr/aboutun/untoday/haction.shtml, accessed on 30th july 2014.
[40] UNICEF, available at http://www.unicef.org/french/, accessed on 30th july 2014.
[41] UNICEF: Vacciner – sauver des enfants, available at http://www.unicef.ch/fr/nous-aidons-ainsi/programmes/vacciner-sauver-des-enfants, accessed on 30th july 2014
[42] « In Western societies, it fails to take into account kinship or friendship in decisions on hiring or promotion. In some Eastern countries, family ties and a sense of family are of great importance» in Dion, M. (2007). L’éthique de l’entreprise, Les éditions Fides, p. 145 (Our translation).
[43] Martina, K. (2012). L’éthique des affaires: la place des droits de l’Homme dans les relations sino-européennes, available on the site http://www.nouvelle-europe.eu/l-ethique-des-affaires-la-place-des-droits-de-l-homme-dans-les-relations-sino-europeennes, viewed on the 1st july 2014.
[44] Rassaert, C. (2013). Brésil, assassinat des SDF pour preparer la coupe du monde 2014, available at http://torredibabel.com/2013/05/02/bresil-assassinats-des-sdf-pour-preparer-la-coupe-du-monde-2014/, accessed on 4th august 2014.
[45] Arias, J. (2013). Miedo en Brasil a una “limpieza” de los sin techo por la celebración del Mundial, available at http://internacional.elpais.com/internacional/2013/04/29/actualidad/1367188751_053079.html, accessed on 4th august 2014
[46] Rassaert, C. (2013). Brésil, assassinat des SDF pour preparer la coupe du monde 2014, available at http://torredibabel.com/2013/05/02/bresil-assassinats-des-sdf-pour-preparer-la-coupe-du-monde-2014/, accessed on 4th august 2014.
[47] Theillier, D. (2014). Coupe du monde de football : pourquoi le Brésil va mal ?, available at https://www.institutcoppet.org/2014/06/17/coupe-du-monde-de-football-pourquoi-le-bresil-va-mal-par-damien-theillier/, accessed on the 04 th august 2014.
[48] Ibid.
[49] Gasmi, N. and Grolleau, G. (2005). Nike face à la controverse éthique relative à ses sous-traitants, Lavoisier, Revue française de gestion, n° 157, pp. 115-136, Pages : 240, DOI : 10.3166/rfg.157.115-136.
[50] Ibid.
[51] Gasmi, N. and Grolleau, G. (2005). Nike face à la controverse éthique relative à ses sous-traitants, Lavoisier, Revue française de gestion, n° 157, pp. 115-136, Pages : 240, DOI : 10.3166/rfg.157.115-136.
[52] Gasmi, N. and Grolleau, G. (2005). Nike face à la controverse éthique relative à ses sous-traitants, Lavoisier, Revue française de gestion, n° 157, pp. 115-136, Pages : 240, DOI : 10.3166/rfg.157.115-136.
[53] Moore, M. (1999). The big one (fiche technique film), Le France, p. 3.
[54] Brisart, J. (2009). L’esclavage pour notre confort, available at http://www.jeunesjournalistes-belgique.net/index.php?option=com_content&view=article&id=541:lesclavage-pour-notre-confort&catid=76:le-travail-des-enfants&Itemid=115, accessed on 12th july 2014.
[55] Gasmi, N. and Grolleau, G. (2005). Nike face à la controverse éthique relative à ses sous-traitants, Lavoisier, Revue française de gestion, n° 157, pp. 115-136, Pages : 240, DOI : 10.3166/rfg.157.115-136.
[56] Malavaux, J-G. (2011). Les problèmes éthiques liés à la lutte contre le travail des enfants, Master Analyse Economique et Développement International, université d’Auvergne.
[57] Gasmi, N. and Grolleau, G. (2005). Nike face à la controverse éthique relative à ses sous-traitants, Lavoisier, Revue française de gestion, n° 157, pp. 115-136, Pages : 240, DOI : 10.3166/rfg.157.115-136.
[58] Fair Labor Association (2012). Gestion durable de la chaîne d’approvisionnement de Nestlé en cacao en Côte d’Ivoire : Gros plan sur les normes de travail (Rapport d’évaluation), p. 7.
[59] Id, p.5
[60] Boisvert, M-A. (2013). Enfants exploités au pays du cacao, available at http://www.lapresse.ca/international/afrique/201311/30/01-4716335-enfants-exploites-au-pays-du-cacao.php, accessed on 14th july 2014.
[61] Nestlé. Nestlé mène des actions contre le travail des enfants en réponse au rapport de la Fair Labor Association sur la chaîne d’approvisionnement de la société. Available at http://www.nestle.fr/media/nestlemenedesactionscontreletravaildesenfantsenreponseaurapportdelafairlaborassociationsurlachainedapprovisionnementdelasoc, accessed on 12ht july 2014.
[62] 24pm écologie et environnement (2014). Le programme Blue Lion de Peugeot, available at http://www.24pm.fr/publicite-ecologie-greenwashing/119-decodage-des-publicite-ecologique/119-le-programme-blue-lion-de-peugeot, accessed on the 15th august 2014.
[63] Ibid.
[64] Peugeot (2013). Peugeot 3008 13B, Tarifs, équipements et caractéristiques techniques, applicables au 4 mars 2013
[65] Féline208 : Peugeot 208 Blue Lion, available at http://www.feline208.net/gamme/berline/peugeot-208-blue-lion/, accessed on 15th august 2014.
[66] 24pm écologie et environnement (2014). Le programme Blue Lion de Peugeot, available at http://www.24pm.fr/publicite-ecologie-greenwashing/119-decodage-des-publicite-ecologique/119-le-programme-blue-lion-de-peugeot, accessed on the 15th august 2014.
[67] Peugeot: http://www.peugeot.fr/decouvrir/206-plus/5-portes/#!galerie-multimedia/zoom-sur/environnement/le-resultat-de-lengagement-peugeot
[68] Gallet, C. et Appert, D. (2010). Rapport d’Etonnement : Les matériaux polymères et le secteur du transport, Ardi Rhône-Alpes.
[69] Id, p.7
[70] Ibid.
[71] Id, p.8.
[72] Dion, M. (2007). L’éthique de l’entreprise, Les Editions Fides, p.118.
[73] Dictionnaires de français Larousse. Concurrence, available at http://www.larousse.fr/dictionnaires/francais/concurrence/17984/locution?q=concurrence#153291, accessed on 15th july 2014.
[74] Centre National de Ressources Textuelles et Lexicales (CNRTL) (2012). Concurrence, available at http://www.cnrtl.fr/lexicographie/concurrence, accessed on 15th july 2014.
[75] Virassamy, G. (2008). L’entreprise face à l’éthique du profit : travaux du CERJDA, volume 7, Editions L’Harmattan, p.48
[76] Rodin, D. (2005). Ethiques des affaires : théories et réalités, Revue internationale des sciences sociales, ERES, n°185, pp. 609-620, ISBN : 9782749204642, DOI : 10.3917/riss.185.0609
[77] Virassamy, G. (2008). L’entreprise face à l’éthique du profit : travaux du CERJDA, volume 7, Editions L’Harmattan, p. 49
[78] Virassamy, G. (2008). L’entreprise face à l’éthique du profit : travaux du CERJDA, volume 7, Editions L’Harmattan, p. 49
[79] Id, p. 48.
[80] Capron, M. (2007). La responsabilité sociale d’entreprise, La Découverte, p.5.
[81] Anquetil, A. (2012). L’éthique des affaires et le scepticisme moral, RIMHE, Revue Interdisciplinaire sur le Management et l’Humanisme n°1 – NE – mars/avril 2012 – Ethique et Organisation, p. 71.
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