Heart of Worcestershire College

Briefing Paper

Author: Mrio Vieira

Introduction
Rapid changes in transportation and communication technology have resulted in new
ways of doing business and new ethical dilemmas associated with environmental and social
responsibility. The concept of sustainability is associated with business practices that take into
account how decisions will affect all stakeholders and the planet rather than focusing only on
gaining competitive advantage for profit. The author of this briefing recommends a strategic
application of ethics that also use an additional dimension of sustainability: sustainable ethical
practice. High ethical standards are required for environmental and social responsibility, but it is
also true that high ethical standards can only be maintained if they are applied in a strategic way
that improves company outcomes in the long term.
The theme for this briefing is 'strategic business ethics', because if high ethical standards
are to be maintained in a competitive global business environment it is necessary to practice
ethics in a way that increases competitiveness. Ethics within the organisation consist of
individual motivations and ethical practices as well as the collective pursuit of the goals of the
corporation (Fisher and Lovell, 2012). In order to reconcile individual motivations with high
ethical standards it is important to apply ethics strategically so that the company's high ethical
standards are noticed by consumers. Each section of this paper will include suggestions about
how the company could address potential problems.

Ethical Theory: Utilitarianism

To make this transition and apply business ethics in a way that also improves
competitiveness, it is necessary to integrate the practice of ethics with the practice of marketing.
After reviewing the current circumstances for the company and studying ethical theories and the
ways in which they are applied by international business leaders, the author recommends going
forward with the expansion. However, it is recommended that the increased efficiency enjoyed
through expansion be utilized for the purpose of improving the company's image rather than
simply improving profit. This is an opportunity to establish the company as a pioneer in raising
the standards of international business ethics.
As the company expands into the less developed country (LDC), it is possible to apply
ethics strategically to optimise outcomes in the long term and also enhance brand image. The
practice of ethics in international business involves taking into consideration all the
consequences of doing business in a particular way, rather than looking only at reducing
expenses and increasing profit (Fisher and Lovell, 2012) . However, the fact that business is
competitive creates a situation in which an advantage seems to be enjoyed by the competitor
willing to make decisions without regard for the social or environmental consequences.
However, empirical studies show that in the long term, the companies with sustainability
initiatives see more growth and profit.

Contemporary Issues

As this transition is made into the LDC specific ethical considerations become important
in two ways. Mele (2011) argues that ethical considerations are essential to the practice of
management, because management consists of interactions among people. Ethical
considerations are fundamental to personal interaction, so it is necessary to reconcile ethical
values with the pursuit of organisational goals. Additionally, ethical practices and social and
environmental responsibility are necessary not only as a matter of moral living while doing
business, but also because in the 'global village' that is forming, people are increasingly
interested in supporting the businesses with the most transparency and best ethical practices. As a
result, a connection exists between the study of ethics and the study of brand image.
The world's favourite brands are the ones people do not need to feel guilty to purchase,
and this briefing paper is evidenced by research studies showing that more consumers are
becoming concerned with supporting ethical business practices through their purchase decisions
(Wu & Wang, 2014). As an example, Apple publishes its environmental impact regularly with
the intent to demonstrate a commitment to environmental sustainability. As a result, people enjoy
making purchase decisions that demonstrate that they identify with the socially conscious brand.
The concept of 'conspicuous' or symbolic consumption is based on an observation that people
make their purchase decisions with an idea of expressing something to others (Veblen, 1899).
The shrinking process we call globalization, and advances in communication technology such as
social media, make it more important than ever to cultivate a brand image that is sincere about
being part of the solution rather than part of the world's problems. It is recommended that the
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company go a step beyond simply defending acceptable ethical standards. From the perspective
of the consumer, companies that support acceptable ethical standards are common and
uninteresting. It is when a company goes a step further that they enjoy the intensity of marketing
in the global village.
Expanding into the LDC is an opportunity to increase efficiency, but it is also an
opportunity to send a message into the public sphere. With the beginning of globalisation, all the
societies of the world are being brought together to form a global version of public opinion.
Such a collective opinion will be as multifaceted as the world itself, but certain common ethical
principles are omnipresent. An approach based on ethical consequentialism is recommended
because this is the ethical theory best able to accommodate the diversity of the global village.
Compared with Kantian ethics, which hold that certain unchanging principles should be
used to guide ethical action, ethical consequentialism is based on only one rule: act in the ways
that will bring about the greatest possible benefit for the greatest number of people (Mill,
1861/1971). When businesses try to apply absolutist ethics such as Kant's 'categorical
imperative' the time, money, and opportunity lost in the name of supporting strong ethical
practices will be appreciated differently from one culture to another. Every culture or society has
a different set of norms and values (Hofstede, 2001), so it is impossible to appeal to all
consumers through the use of absolutist ethics.

Stakeholder Groups

Utilitarian ethics is compatible with the ideals of sustainability, particularly one of the
principles of successful practice suggested by Rahardjo, Idrus, Hadiwidjojo, and Aisjah, (2013):
management achieving mutually beneficial circumstances for all economic stakeholders. With
regard to employment conditions and wages, it is recommended that utilitarian ethics be applied
conspicuously, such that consumers are able to easily understand and talk about their reasons for
choosing the company's brand. For example, people are able to understand the concept of acting
in the way that gets the best outcome for the largest number of people as explained by John
Stuart Mill (i.e. utilitarian ethics). Some consumers with ethical views strongly influenced by
cultural relativism will not see the appeal in the utilitarian approach, because the utilitarian
approach will not always necessarily prioritize the needs of their own nation over the needs of
other nations. However, the best outcome can be achieved if the company applies business ethics
in a way that appeals to consumers who can appreciate utility. In the era of globalization, which
is an integration of the world's economies and cultures, utility is more appropriate that relativism.
It is more compatible with the alchemy of cultures that is taking place in the digital age.
One application of utilitarian ethics which will be particularly controversial will be the
outsourcing of labour. In the sense that utilitarianism favours the greatest good for the greatest
number of people, it does not require organisational leaders to make decisions to benefit citizens
of their home country. If the company can demonstrate that it's decision to expand has increased
the quality of life for many people, it can mitigate the harmful effect as the loss of UK jobs takes
its toll on brand image. To frame the transfer of jobs to the LDC as an act of utilitarianism in this
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way, it is also necessary to pay the a wage that is proportional to the cost of living in the region.
It is easy to calculate the wage that would be equivalent to an acceptable wage in more
developed nations. The author of this briefing recommends that the company go a step beyond
what is acceptable and invest some of the efficiency, which is enhanced through expansion, in
showing consumers that they pay wages that are even higher than what is considered acceptable.
With regard to the use of bribery to gain the necessary permissions and access, reasonable
alternatives should be sought. There may be a way to direct money to other stakeholders and
achieve the same goal in a transparent way. However, in using utilitarian ethics it can be argued
that bribery is acceptable if it leads to the greatest good for the greatest number of people.
Theoretically, in a LDC where bribery is the norm, utilitarian ethics can be used to argue that
bribery is the norm and that it is acceptable. This is another advantage of promoting a company
image associated with utilitarian ethics. However, in actual practice it is not advisable to allow a
situation to occur where people associate the company with bribery because the term has such
negative connotations.
In addition to economic stakeholders, it is also necessary to consider environmental
issues and child labour. Child labour issues and environmental negligence can destroy a
company's reputation, but if organisational leaders take advantage of the opportunity to establish
clearly that they do not tolerate it will improve the company's image tremendously and give
consumers a chance to express themselves through their purchase decisions favouring the
company that takes a stand against child labour and environmental irresponsibility.

Conclusion

The concept of strategic ethics which has been a theme in this briefing requires that
global corporate responsibility be used in a way that enhances marketing and branding efforts.
In particular, the utilitarian approach to ethical consequentialism is a concept that is easy for
consumers to understand. By conspicuously using utilitarian ethics and going as far as to explain
it in marketing campaigns, the company can give consumers something to talk about as they
express themselves through their purchase decisions. The expansion into this LDC should be
approached as an opportunity to develop an image as a company that practices international
business in a way that raises ethical standards.

Bibliography

Fisher and Lovell. (2012). Business ethics and values. Pearson.

Hofstede, Geert (2001). Culture's Consequences: comparing values, behaviors, institutions, and
organizations across nations (2nd ed.). Thousand Oaks, CA.
Mill, J.S. (1861/1971) Utilitarianism. Penguin.
MIT News (2013) Companies profit from embracing sustainability. Available:
http://news.mit.edu/2013/companies-profit-from-embracing-sustainability
Rahardjo, H., Idrus, M. S., Hadiwidjojo, D., & Aisjah, S. (2013). Factors That Determines the
Success of Corporate Sustainability Management. Journal of Management Research,
5(2), 1.
Veblen. (1899) The theory of the leisure class: An economic study of institutions. Random
House. New York.
Wu, S., & Wang, W. (2014). Impact of CSR Perception on Brand Image, Brand Attitude and
Buying Willingness: A Study of a Global Caf. International Journal of Marketing
Studies, 6(6), 43.