For this part of my assignment I have been asked to describe the social implications of business ethics which face my chosen company. I will be looking at social implications such as trade unions and protest groups. I will then describe how these groups may affect my organisation.
Government policies – The government creates the rules behind how a business is run and how it can interact with competition and other business. The government has the ability to change these rules and also the framework which then means that the business has to change the way in which it operates.
An example of when a business has had to change the way it operated due to the government is when the Malaysia government brought in a law which stated that Tesco had a five year freeze on building any more supermarkets in three major cities of the country due to the fact their presence was controversial. The article stated:
Despite having been in Malaysia for a relatively short time, and having few stores, Tesco’s presence has been controversial and a catalyst for the implementation of stricter trading laws. As of January 2004, there is a five-year freeze on the building of any new hypermarkets in Malysia’s three major cities Kuala Lumpur, Penang and Johor Bahru.
We have to think about whether it is ethical to bombard a third world country with all of these supermarkets. The article went on to say that due to the fact they weren’t allowed to open new stores they just extended the hours in the other supermarkets to 24hour. Is this ethical to put a 24hour Tesco in a third world country. It is going to cause noise and pollution and also a lot of controversy. Tesco have stated on their website that they plan for world domination. This is a scary thought for many people in society as these big supermarkets are becoming very powerful, in fact too powerful. In one article I found that the government had actually given in to supermarkets . The article stated:
Labour has been accused of caving in to big business cronies after it was revealed that planning safe guards for Britain’s historic town centres were scrapped following pressure from the supermarket giants. The disclosure will fuel suspicion that Tesco, Sainsbury’s and Asda have a strange hold on government policy, while small business owners struggle to be heard. (www.thisismoney.co.uk )
Pressure Groups – A pressure group can be described as an organised group that does not put candidates up for election, but seeks to influence government policy or legislation. The aim of all pressure groups is to influence the people who actually have the power to make decisions. Tesco has attracted recent criticism for its activities. Tesco is a massive business ,which now takes £1 in every £8 made in UK shops. The organisation has become very dominating and is always expanding. But this success has apparently come at a price and chief executive Terry Leahy is careful to monitor opposition to the business. The company puts it success down to the ability to meet customer demand. It is important that Tesco make sure that fears over their marketing power does not affect their business or reputation. A pressure group called friends of the earth point to Tesco’s policies of buying up large amounts of landing order to build new stores, fighting battles with local communities over planning, and bringing the company’s brand to the high street through its purchase of small convenience stores. The opposition voiced by FOE is well summarised in its report ‘calling the shots: How supermarkets get their way in planning decisions’
‘The key questions here are not about illegal activity, but about an erosion of democracy, with the inability of local authorities to make a decision against supermarkets. Many councillors express strong concern about the potential impact of major supermarkets on their community, but they are often unable to convert these concerns into decisions because the planning system and the strength of the supermarkets act against them’.
Tesco also face opposition from less mainstream pressure groups for example a group called Tescopoly, this is an online group which aims to expose and limit what they see as the market- distorting power of the business. The group points out to people when Tesco have overstepped their permission to build retail outlets or where they have admitted to breaking the planning regulations. Is it ethical that Tesco are not listening to what they have been told because they believe they are so powerful that they do not need to listen.
Trade Unions – A trade union is an organisation of workers that have banded together to achieve common goals such as better working conditions. The trade union through its leadership, bargains with the employer on behalf of the union members. I have found an article which shows a trade union standing forward for employees about an issue they are un happy article. The article named Tesco and Trade union at logger heads over strike taken from road transport.com reads:
Tesco and the TGWU section of the Unite trade union were both claiming a success this week following three days of strike action at the supermarket’s depot in Scotland over drivers’ pay and conditions. The union claims picket lines reduced supplies coming out of the Livingston depot by 75% and the public were behind the drivers’ stand against Tesco. It is now considering a national ballot for strike action.
Is it ethical that Tesco employees are claiming poor working conditions for drivers? It is important to always look at two sides of every argument on the Tesco website they claim that they offer good pay to all their workers and that they always comply with health and safety regulations so working conditions are good.
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Topic: Social Implications of Business Ethics
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