With the recent expansion of global business and the fall of trade barriers through out the world, the interest in the topic of ethical behavior and social responsibility have grown to gain more attention.
Businesses find themselves facing external pressures to improve their ethics. Consumers are increasingly demanding that companies produce goods in an ethical manner, especially when it comes go workers’ wages and workers’ conditions. The advantages of ethical behavior is that a firm receives a higher revenue, improved brand, improved business awareness, recognition, better employee motivation and recruitment, and possibly new investors who like the ethics of the firm. The disadvantages of ethical behavior is that there is a higher cost because fair trade suppliers are more expensive then the low priced unethical firms. Another disadvantage is that there is a higher overhead for the firm because they have to train and communicate their employees about their ethical policy.
A business cannot claim to be ethical if their suppliers use unethical practices, such as child labor, sweatshops, violation of rights, and so on. A firm must be concerned with behavior of all the businesses that operate in the supply chain, like the suppliers, contractors, distributors, and sales agents. The UK clothing line, Primark, is an example of this. In 2008 they fired three of their suppliers in India because after six-month investigation, they found the suppliers were using child labor to do embroidery and sequin work. Primark has a code of ethics, which prohibits the use of child labor in its manufacturing chain. Their code of ethics states that they will terminate relations with any supplier who violates this rule or any rule in their code of ethics. Strategies, such as code of ethics, are one way of achieving the goal of ethical international responsibility when engaging in business worldwide.
Organizations use different types of philosophy to arrive at what their...