Business Ethics

Business Ethics 1
Business Ethics
City, State
Date of submission
Business Ethics 2
In business, there exists certain code of ethics that act as a guiding principle (Walker,
2016). Business ethics refer to the expected code of conduct that any business should conform to
in its operations. When a business acts unethically, then, it means that its actions are not in
conformity with the accepted standards required in its operation activities (Walker, 2016).
Examples of unethical business practices in the real world scenario includes exploitation of
workers by the business, tax evasions, harmful dumping of toxins and issues of product design
technicality (Walker, 2016). Nike is one company that has fallen victim of operating unethically
in the past. It has involved itself in the use of child labor, payment of low wages to its
employees, poor working conditions and
Theories that the company can use in overcoming its unethical business practices
i. The theory of utilitarianism: This theory dictates that being ethical involves doing the
greatest good for everybody (de Colle and Werhane, 2017). In the Nike Company
Scenario, this theory would strongly be appealing on their case. In Nike Company
scenario, it would be of importance to look at the general welfare of the employees
through proper remuneration and improved working conditions. It should not only focus
on generating profits for itself but also mind of the welfare of its other players.
ii. Rawls theory of justice: Under this theory, there is an alternative to the theory of
utilitarianism through application of fairness, free will and equality (de Colle and
Werhane, 2017). This theory propagates that people should be rational and that they
should value their own good. In the Nike case, the company management can apply this
theory in ensuring that there is equality for everybody in the company. That every
employee is paid a decent wage, that there are proper working conditions and that the
Business Ethics 3
company is fair in its dealings. For example, when workers work overtime, they should
be paid.
iii. The theory of natural rights: This theory entitles the treatment of individuals working
in an organization in a certain way (de Colle and Werhane, 2017). Nike Company is
therefore expected to accord its employees a decent level of treatment. The company
should take care of their well beings and ensure that their rights as the company
employees are not violated.
iv. The theory of ethical relativism: Under this theory, there is an assertion that what is
right and wrong is subjective and can hence be determined by the society (de Colle and
Werhane, 2017). Since Nike is a rational Company, then there is a very elaborate
mechanism that should guide what is right and what is wrong. The company should
ensure that it treats its employees according to what is right and just. Any wrong
treatments of the employees should not be justified.
v. The virtue concept: This concept demands that any organization ought to examine its
ethics and ensure that they are a reflection of positive characteristics (de Colle and
Werhane, 2017). Nike has an opportunity to transform its tarnished name into an
impression of beauty. This can only be possible if the company acknowledges the need to
revisit its ethical practices so as to ensure they give a positive gesture.
vi. The fairness principle: The Company should strive to treat all employees equally
without favorism. In the Nike sweatshop scenario, there has been unfairness in the sense
that the management treats the employees unjustly. This principle would be of use to the
company in ensuring that there is a review of discriminatory channels that have existed in
the past.
Business Ethics 4
vii. The Fiduciary Principle: This theory asserts that the management of a company act at
the fiduciaries (Paine, 2011). Nevertheless, the company’s employees enter into a
fiduciary relationship with the entity entrusted to protect and uphold their rights and
protect their interests. Consequently, the employees have the mandate to protect the
company’s resources (Paine, 2011). In this case, the Nike shop sweatshirt company has
not protected and upheld the rights of its employees in the past. It is therefore important
for them to revisit this theory. Since their employees have honored their obligation in
remaining upbeat in protecting the Nike sweatshirt resources, the company has an
obligation to reciprocate this.
viii. The Transparency principle: This theory demands that the company should disclose the
relevant information to the public to show how it runs its operations (Paine, 2011). Nike
has in the past contracted child labor without the consent of the public. In times when the
company has employed children, it did not disclose as that would be illegal. The
application of this principle will help the company achieve transparency in all its
operations and rise above unethical practices (Paine, 2011).
Recommendations on how the company can overcome their unethical behavior and their
i. The company’s employees should be remunerated a decent wage. Through the
payment of a good wage, the employees will feel rewarded for their input in the
company and therefore will work more to give the best results .Also; there should
be proper working conditions for the company’s employees. Through this, the
employees will feel motivated to work towards the company goals and objectives.
Business Ethics 5
ii. Since it is an unethical business practice to use children labor, the Nike
Sweatshirt Company should cease employing children as this goes against their
rights. The company should come up with proper and efficient mechanisms of
hiring qualified human labor to work with them. This not only ensures that there
is increased efficiency of the company’s output but also ensures there is skilled
labor force that can work towards achieving the objectives of the Sweatshirt
iii. In cases where Nike officials have violated the rights of women through physical
verbal and sexual abuse, the company needs to take the necessary legal
procedures to ensure that justice is served. In Asia, Nike Sweatshirt Company
have had cases of such abuses. Coming up with strict rules that guide the manner
in which these top officials handle their employees would be important in
achieving proper ethical standards.
iv. From the Harvard Business Review, it is important for the company to bring its
stakeholders such as its clients, employees, competitors and other partners on
board in seeking ways of dealing with the unethical business practice they are
faced with (Paine, 2011). By doing this, it will help the company in understanding
its responsibility of rebuilding its image back into the market.
Business Ethics 6
Bose, U. (2014). An ethical framework in information systems decision making using normative
theories of business ethics. Ethics and Information Technology, 14(1), pp.17-26.
de Colle, S. and Werhane, P. (2017). Moral Motivation Across Ethical Theories: What Can We
Learn for Designing Corporate Ethics Programs?. Journal of Business Ethics, 81(4),
Walker, R. (2016). Value and Nature: Rethinking Capitalist Exploitation and Expansion.
Capitalism Nature Socialism, 28(1), pp.53-61.
White, J. and Taft, S. (2004). Frameworks for Teaching and Learning Business Ethics within the
Global Context: Background of Ethical Theories. Journal of Management Education,
28(4), pp.463-477.
Business Ethics 7
Lynn, S .Paine (2011). Business Journal on Capitalist at Risk: Rethinking The Role of Business
Ethics Harvard Review, 14(1), pp.17-26.

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