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Most important business management

Operating in an ethical way is one of the major managerial objectives in business management. According to Craft (2016) business ethics includes the normative business conducts that encompasses conformity to the legal guidelines, moral values and societal norms. Hence, the idea of ethical business is to operating a business by valuing moral guidelines. This aspect of business management has directed to the initiative of CSR that calls for conforming to the dimensions of profit generation, obeying national and international laws, promotion of employee welfare, upholding a sustainable environment and valuing moral principles.

Here, in this essay is based on a news article published in the BBC News Website, that deals with the issue of contravening the moral guidelines and social responsibility by the companies like Mark & Spencer (M&S), ASOS and Next, by ignoring the issue of using child labour in their global supply chain. In this essay, the author has briefly mentioned the news and identified how this phenomenon is affecting the society and thus disrupting the objective of ethical business management. Moreover, he/she has also described how this issue is upsetting the guidelines of CSR activities, how these may interrupt the market potential of these companies. Finally, the author has described a few pragmatic suggestions those can be followed for exercising an ethical business operation.

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This selected news item is related to one of the most important business management issue i.e. ethical business management. According to the news of BBC, the Syrian refugee children have been found making clothes for the UK based fashion brands. This news has ignited the concern of the child labor in the business organizations. In “The Undercover: The Refugees who make Our Clothes” the BBC has found that the companies like Mark & Spencer (M&S), ASOS and Next have contracted with tried party suppliers who are using children as the cheap labour options, and these companies are selling their products in the British high streets (BBC News 2017). Though the business organizations have responded in utter surprise, they cannot ignore their responsibility in this regard. This incident can be identified as a sheer contravention of the moral guidelines and the national and international legal frameworks. This news article has served as the trigger of this bellow mentioned discussion on the topic of ethical global business management.

In modern business world, the companies are able to operate beyond their geographical boundaries. With globalization, the investors have the opportunities to invest in markets those are more potential than their national market. As discussed by Gold et al. (2015) globalization has brought the highest-level advantage to the capitalists and companies. In addition to this, now the companies have the opportunity to outsource some of their operational responsibilities. As identified by Stewart (2016) out sourcing is the continuous procurement of products or services from a third party. Now, with the aim of reducing cost and eliminate the operational hazards, the companies try to obtain some of its operational services from third parties. Globalization has broadened this idea of out sourcing. As mentioned by Nogler and Pertile (2016) now the companies are able to use the operators of the emerging or underdeveloped markets. These operators charge much less than the operators in the saturated markets of developed countries do. Lack of investment, low level of employment and abundance of unused resources are compelling the operators to serve in lower cost (Imosemi and Nzeribe 2016). Withdrawal of the economic regulations in international transaction is helping the big marketers in exploiting this opportunity. Hence, the companies like Mark & Spencer (M&S), ASOS and Next have contracted with tried party suppliers in Syria. The economic deprivation in this war-ridden country is compelling the children to invest their childhood in moneymaking (Abdullahi et al. 2016). The third party suppliers are using both of these opportunities. The trend of global economy has provided them the opportunity to collect contracts from multinational companies and the poverty is supplying them low cost labours (child labours) (Nogler and Pertile 2016).

The idea of ethical business largely refers to the moral management of businesses. As discussed by Stewart (2016) ethical business management refers to the maintenance and assurance of the highest level of legal and moral standards in the relationship with the people of the business community. According to Drewniak and Voss (2014) an ethical company is an organization that is causing no damage to the society, exploiting the community or the employees, using child labour or producing harmful products. Under the light of this definition, the above-mentioned companies like Mark & Spencer (M&S), ASOS and Next, are conducting an unethical business by using child labour in their supply chain.

According to the International Labour Organization, child labour is employing children into the work that deprives them of their childhood, sabotage their potentiality, damage their self-respect and dignity that leads to harmful physical and mental development (Ilo.org 2017). As discussed by Nogler and Pertile (2016) exploitation of children for making profit is heinous, immoral, unethical and illegal too. The major ethical issues that arise with the employment of the child labour in the organizational process is their deprivation of right live a healthy life, right to education and the right to get love and care. It creates a number hazardous health effect among them which includes lack of social skills, depression, emotional instability, physical harm and many more (Abdullahi et al. 2016). On the other hand, as opined by McKinney, Hill and Hania (2015) employing child also have some critically adverse effects on the community. According to Imosemi and Nzeribe (2016) promoting or the lack of address in the issue of child labour, encourages the existence of poverty generation after generation. The lack of education and overall growth disrupts the potentiality of the children as good human resources in future. On the other hand, as discussed by Humphries (2013) the disrupted childhood encourages the children to join criminal organizations. Moreover, in various cases, the prevalence of child labour encourages criminal acts like kidnap, smuggling of kids, enslavement and prostitution. Thus, the phenomenon is essentially directing towards the disruption of the human rights of the children, which is severely unethical. Hence, it is the duty of the business organizations to address this issue for a sustainable operation.

The companies opt for upholding an ethical image for ensuring a positive brand image, a sustainable operation and avoiding legal issues (Goldstein 2015). Hence, it can easily be speculated that this above quoted news will surly impact the brand image of these high-end companies. It was the major responsibility of the management to address this issue, when they are collaborating with companies, based on locations, where child labour is common. This idea of ethical business essentially directs the discussion to the issue of CSR or Corporate Social Responsibilities in the business management.

The basic essence of the CSR was the need of moral responsibility of the business organizations to the stakeholders, society and the environment (Pedersen 2015). According to the World Business Council, CSR is a consistent promise by the businesses to perform ethically and contribute to the financial development along with concentrating on improving the quality of life of the workforce, their familiarise, local areas and the society as a whole (World business council for sustainable development 2017). According to Okpara and Idowu (2013) the dimensions of CSR involves both the legal and ethical responsibilities. One of the major objectives of CSR is to uphold the human rights, which is being largely disrupted by the child labour issues. In this context, it is a dilemma for the companies that eliminating these children from the workforce may lead them to worse social situation. As mentioned in the selected news articles the extreme poverty has compelled these children into being child labour. However, they are not even being fairly paid (BBC News 2017). Moreover, the international guidelines on CSR like “Social Accountability 8000” have specified the introduction of workers’ welfare, which is also missing for these children (McKinney, Hill and Hania 2015).

On the other hand, as discussed by Buck (2014) according to various national and international laws like “UN Convention on the Rights of the Child (1989), ILO Convention No. 182, Factory and Workshops Act (1878), Factory Act (1847),” education laws and many more makes it a contravention of the legal framework and the CSR guidelines for the corporate houses. Though the mentioned companies are not directly involved in engaging the child labours into the workforce, their frailty in inspection has made them responsible for contravening their responsibility of CSR and ethical business. The companies cannot ignore their responsibilities towards the bigger community and the international laws. The issue of using children is as labors is a simultaneously affecting the moral responsibilities of the company towards the society and legal guidelines. According to Samuelson and Anderson (2014) the Carrol model of CSR, by obeying the legal and ethical responsibilities and the companies may gain a sustainable market success. Hence, it is important for them to obey the legal guidelines and being ethical. It directs the companies to opt for an ethical supply chain. As discussed by Carroll, abiding the national and international laws is the basic step of CSR; it helps in operation without facing any legal risk. Here, the UK based companies need to focus on the guidelines of the “Factory Act (1819, 1833, 1844, 1847, 1850); Education Act (1870) etc. of the UK (Humphries 2013). Moreover, the international policies like “the UN Convention on the Rights of the Child (1989), ILO Convention No. 182 on the Worst Forms of Child Labour (1999) and ILO Convention No. 138 on the Minimum Age of Admission to Employment” etc. needed to be followed (Buck, 2014). Due to the lack of proper audits the mentioned companies has created a threat of criminal sanctions or financial penalties for themselves.

On the other hand, as discussed by Ragas and Culp (2014) one of the major objectives of CSR is to create an image of corporate citizenship, as it upholds positive brand image and collect happy customer base. According to the corporate citizenship model of CSR, the companies need to promote ethical actions and take severe steps against issues like child labour (Verhey, Baum and Hai 2016). The mentioned situation has identified an indirect violation of human rights with the revelation of child labour in the supply chain. It can damage the image of these brands and may direct the companies to face loss in sales, decreased market share and lack of investors. Hence, it is a necessity for the companies to take some meaningful CSR initiatives to eliminate such threats and operate an ethical business operation.

As discussed by Nilsson and Tsai (2016) for conducting an ethical business, the companies may follow both the proactive and reactive approaches. In the context of this situation, the companies need to concentrate on upholding a better and innovative audit approach for upholding a transparent supply chain (Giannakis and Papadopoulos 2016). The companies need to follow their traditional audit approach along with secret community inspection. Here, the auditors may opt for collecting information from the communality and the previous employees regarding the business management process of the suppliers. Moreover, as mentioned by Gold, Trautrims and Trodd (2015) with the philanthropic approach of CSR, the companions may strive to attain the ethical responsibilities. According to Cho et al. (2016), the discretionary responsibility or the philanthropy encompasses various acts that make meaning contribution to the communities. In this context of eliminating the Syrian child labour from the supply chain, the companies may promote community development programs in the localities of the suppliers. As opined by Sancha, Gimenez and Sierra (2016) by promoting health and education within a community the companies become able to create a good base of human resource for future. Moreover, by encouraging the women of those communities in the sewing activities, the companies will be able to empower them and eliminate the child labours. They also need to maintain a separate pay scale that should be maintained by the suppliers. Moreover, by the financing employee welfare schemes of the suppliers these corporate houses will be able to maintain a track of the supply chain and promote safe and healthy work environment for the employees (Goldstein 2015). Along with these, education program for children needs to be organised in those areas. Thus by accessing fair and reasonable salary, the parents will try to send their children to the schools, which is the important right of those children. Moreover, the companies also need to maintain an easy-to-access compliant cell where the community members or the employees may register their complaints against the supplier for contravening the employees’ or community rights. These strategies will help them to invalidate the reputational, financial and legal threats that may debar a successful business management.

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Hence, it can be concluded that, addressing the unethical business issues like using child labour in the supply chain creates a market and operational threat to the commercial organizations. Hence, it is important for them to keep a close eye on the supply chain process on its collaborates and suppliers. An unethically operating company may bring reputational, legal, operational and financial risk to the management. Moreover, from the ethical point of view it is heinous to employ children into the commercial production when it is their age of acquiring education, nourishment, love and care. This investigation and subsequent news article of BBC has put light onto the internationally significant issue of ethical business management. The companies like Mark & Spencer (M&S), ASOS and Next have stated that they have taken positive steps to eradicate the child labours from their supply chain, but it will not bring any sustainable change in the industry. The positively interested corporate houses need to concentrate into their CSR activities and take the responsibility of providing minimum care to the children of the employees and the community as a whole. These initiatives need to include promoting health and education, women empowerment, fair and reasonable wage and effective complaint addressing cell. Thus with both the proactive and reactive approaches the organizations will be able to uphold an ethical business management.

References:

Abdullahi, I.I., Noor, Z.M., Said, R. and Baharumshah, A.Z., 2016. Does Poverty Influence Prevalence of Child Labour in Developing Countries?. International Journal of Economics and Financial Issues, 6(1).

BBC News. (2017). The kids who have to sew to survive - BBC News. [online] Available at: http://www.bbc.com/news/business-37693173 [Accessed 21 Mar. 2017].

Buck, T., 2014. International child law. Routledge. Cho, S.H., Fang, X., Tayur, S.R. and Xu, Y., 2016. Combating child labor: Incentives and information transparency in global supply chains.

Craft, J.L., 2016. Common thread: The impact of mission on ethical business culture. A case study. Journal of Business Ethics, pp.1-19.

Drewniak, R. and Voss, G., 2014, April. Corporate Social Responsibility as an ethical componenet of business strategy. In Proceedings in GV-Global Virtual Conference (No. 1).

Giannakis, M. and Papadopoulos, T., 2016. Supply chain sustainability: A risk management approach. International Journal of Production Economics, 171, pp.455-470.

Gold, S., Trautrims, A. and Trodd, Z., 2015. Modern slavery challenges to supply chain management. Supply Chain Management: An International Journal, 20(5), pp.485-494.

Goldstein, J.S., 2015. CSR Best Practice for Asbolishing Child Labor in the Travel and Tourism Industry. Denv. J. Int'l L. & Pol'y, 44, p.475.

Humphries, J., 2013. Childhood and child labour in the British industrial revolution1. The Economic History Review, 66(2), pp.395-418.

Ilo.org. (2017). International Labour Organization. [online] Available at: http://ilo.org [Accessed 21 Mar. 2017].

Okpara, J.O. and Idowu, S.O., 2013. Corporate Social Responsibility. Springer Berlin Heidelberg. Pedersen, E.R.G. ed., 2015. Corporate social responsibility. Sage.

Ragas, M.W. and Culp, R., 2014. Corporate Social Responsibility. In Business Essentials for Strategic Communicators (pp. 109-122). Palgrave Macmillan US.

Samuelson, P.A. and Anderson, H.C., 2014. corporate social responsibility. Morality and the Market (Routledge Revivals): Consumer Pressure for Corporate Accountability, p.43.

Sancha, C., Gimenez, C. and Sierra, V., 2016. Achieving a socially responsible supply chain through assessment and collaboration. Journal of Cleaner Production, 112, pp.1934-1947.

Stewart, D., 2016. Ethical Business Practices in Dardan Enterprises. In Tribal Wisdom for Business Ethics (pp. 103-110). Emerald Group Publishing Limited.


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