The lesson from this week’s teachings is that moral philosophies and values drive business actions and decisions. To explain the relationship between these concepts, two case studies are reviewed and thoughts shared.

            The first case study ‘Theo Chocolate Company’ highlights the actions by a company founder to promote the well-being of poor farmers by sourcing raw materials at a cost of up to three times the going rate. His actions correlate with the ethical principle of distributive justice which promotes the idea of sharing risks and benefits (Ferrell, Fraedrich & Ferrell, 2015). For instance, company founder Joe Whinney believes that workers deserve decent compensation because of their effort to grow cacao. Not only does this ethical principle ensure fairness but also help employers retain the best talent as demonstrated by Smith, Mazibuko and Mrwebi (2019). The findings originate from a research project to assess outcomes of distributive justice among financial services companies in South Africa. This shows that equity and fairness benefits both the supplier and the manufacturer.

            The second case study ‘CVS: “Fired Up” about Social Responsibility’ highlights an approach by a company to balance the interests of different stakeholders. The issue correlates to the idea that stakeholder interests determine the value a company creates. The more the company serves the needs of different stakeholder the more it proves its usefulness. Even so, this can only be possible when a company has a robust corporate governance system that recognizes stakeholder diversity. Besides, the actions by CVS espouse stakeholder theory mentioned by Gersel and Johnsen (2020). For example, the management team has deliberated a rational approach to ensuring that executives are compensated based on their efforts to meet the needs of both the company and shareholders.

            In sum, personal values and stakeholder theory are useful in guiding the actions of business executives to ensure that they are moral and ethical.            

References

Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2015). Business ethics: Ethical decision making & cases (10th ed.). Nelson Education.

Gersel, J., & Johnsen, R. (2020). Toward a Novel Theory of Rational Managerial Deliberation: Stakeholders, Ethical Values, and Corporate Governance. Academy of Management Learning & Education, 19(3), 269–288. https://doi.org/10.5465/amle.2019.0198

Case Study 1

Theo Chocolate Company employs utilitarianism, affording the most people the greatest good, according to Ferrell, Ferrell, & Fraedrich (2019).  However, chocolate is a luxury grocery item that one may splurge on occasion.  I am curious if an electronics manufacturer like Samsung or Apple could ever achieve enough of market share employing such a positive philosophy.  I believe it is worthwhile to pay employees (all along the value stream) a living wage, regardless of where they live. If their livelihood is not supported by their salary, they may be forced to find unique ways to close the pay gap, like the poor in Somalia, as reported by Kantharia (2019).   

Case Study 2

Even prestigious, well-known companies, like CVS, can have lapses in ethics.  Given the size of the company (nearly 10,000 retail locations and over 1,000 MinuteClinics, according to their website, CVSHealth (n.d.)) much more should have been done to ensure ethics training was mandated across the board, especially when the company directly affects the health of millions of Americans.  However, each individual CVS has to comply with the headquarters mandate to provide and adhere to such training, which is more difficult to enforce from the top down, unlike the decision to remove tobacco sales from all stores.  This is very much in line with my notion of integrity.  As a radical health-conscious move Stuart (2014) reported that CVS also nearly decided to stop selling candy and soda instore, but will instead work to point out healthier alternatives.  The contrast between sugary snacks and the carcinogens found in tobacco products is stark.  It is hypocritical to sell wellness products and products that are known to cause cancer under the same roof.  This is a main reason why Whole Foods won’t sell Coca-Cola, according to Myers (2018).  As a military member, I find it odd to consider the juxtaposition of taking a mandated military medical exam where tobacco products and alcoholic beverages are actively discouraged and visiting the on base class six where both tobacco products and alcoholic beverages are on sale.  Furthermore, until Medicare for All is manifest in the U.S. I also believe that CVS is doing right by engaging a utilitarianism viewpoint and making healthcare more accessible than a physician’s office.

References