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Ethics and Corporate Responsibility in the Workplace

Introducing ethics into the corporate framework is an essential step towards promoting a further evolution of the organization (Cremer & Tenbrunsel, 2012). However, the stiff competition rates of the global economy environment dictate that companies should resort to all methods available to improve their performance and remain on top. Although the idea of allocating the firm’s financial assets reasonably is quite legitimate, the fact that PharmaCARE deprived its staff of the opportunities that its managers enjoyed and left the employees fully unaware of the shows that the organization’s ethical standards are beyond despicable and need an urgent change.

The organization’s employees, its managers, leaders, customers, and partners can be viewed as the key stakeholders. The company’s staff needs to be considered closer than the rest of the stakeholders, as the case indicates that the rights of the specified stakeholders have been infringed to an extensive degree, as opposed to the rights of the rest of the participants involved in the case. In order to improve the current state of affairs, the organization should introduce the principles of virtue ethics, CSR and transformative leadership into its framework.

From the perspective of the human rights, the company’s violation of the basic tenets of ethics is obvious. Particularly, the workers’ rights need to be mentioned in the specified scenario. According to the U.S. Federal Law (Occupational Safety and Health Act (OSHA)), a company must “assure safe and healthful working conditions for working men and women” (Occupational Safety and Health Administration, 2014, p. 2). Seeing that the staff of PharmaCARE works in unsanitary conditions, and that the environment, in which the staff members work, cannot possibly live up to the OSHA standards defined as “safe and healthful” (Occupational Safety and Health Administration, 2014, p. 2), it is evident that PharmaCARE infringes the rights of its staff. The fact that the company uses people’s lack of awareness concerning their rights makes the organization’s actions all the more despicable.

The specified phenomenon can be explained by a complete absence of any corporate social responsibility (CSR) in the firm’s framework. Defined as “the responsibility of enterprises for their impacts on society” (Droppert & Bennett, 2015, p. 16), the above-mentioned phenomenon helps introduce managers to the idea of responsible use of the company’s resources (Brejning, 2012). In addition, CSR will help eliminate the instances of power abuse among the company managers. Last, but not least, CSR will help the organization’s leaders reconsider the very fabric of the firm’s ethics. Therefore, the processes of decision-making will be based on an entirely different set of principles that will allow meeting the needs of all stakeholders involved, including the workers.

When reconsidering the way, in which decisions are made in PharmaCARE, one must admit that the firm lacks CSR completely. Indeed, its managers are guided by personal needs when making the choices that affect the operations of the organization, as the case study in question shows rather clearly. Since the provision of luxurious facilities to PharmaCARE managers were not required in the aforementioned setting and the financial resources spent on these facilities could be used to provide the local working force with decent conditions, the allocation of resources was conducted in an irresponsible manner.

The organization’s efforts at establishing itself as an environmentally-friendly company can also be viewed as rather dubious. The company’s endeavors at environmentalism look as a cheap ploy for attention in the light of the fact that the company has created a lobby for attacking the recent environmental regulations, such as Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and the Superfund tax (United States Environmental Protection Agency, 2011). The company’s intent to address the environmental issues is laudable, yet it does not align with its recent decisions.

The current actions of the organization can be evaluated from the tenets of a variety of ethical theories; however, no matter what teaching is used for assessing PhramaCARE’s strategy in Cambodia, the fact that the firm violates the workers’ basic human rights is doubtless. As the analysis of the key ethical theories provided above shows, PharmaCARE’s choices cannot possibly be justified from the position of any ethical theory.

According to the principles of Utilitarianism, the consequences of a specific action define its ethical value (Nelson, 2013). As a result, the “little value that is attached to the individual” (Rajko, 2012, p. 13) is the basic problem of the theory in question. Applying the specified principle to the current HRM strategy adopted by the organization in Cambodia, one must admit that PharmaCARE’s actions do not contradict the key premises of the specified theory. Although the company’s managers cared very little about the Cambodian workers when they designed the designed the tools for reducing costs related to providing staff with the required amenities, it could be argued that they were acting on behalf of the firm and in its best interests. However, seeing that the managers preferred to splurge on themselves instead of using the saved money for production purposes, even utilitarianism cannot possibly justify PharmaCARE’s choices.

Deontology, in its turn, states that one must act based on the existing standards for “what is right” (Trevino & Nelson, 2010, p. 42). Therefore, by the standards of deontology, PharmaCARE failed to do what was right at the moment; particularly, the managers put their personal needs in front of the needs of the employees and the company.

Based on the assumption that people’s actions should be guided by their virtues and assuming that the development of these virtues should be encouraged by leaders (Russell, 2013), the ethical theory in question points at the obvious lack of virtue standards in PharmaCARE. The managers of the organization were inspired by the idea of self-enrichment, which goes against the foundations of virtue ethics, such as altruism (Chakraborty & Chatterjee, 2012).

According to the existing definition the ethics of care is the philosophy that is supposed to “cultivate that sense of responsiveness in recognition of the many sorts of relationships that sustain us socially, economically, politically, and environmentally” (Hamington & Sander-Staudt, 2011, p. 121). Although PharmaCARE should be credited for the leaders’ endeavors at improving the environmental impact of the organization and eliminate the hazardous and possibly toxic waste production, the company still clearly fails to act on behalf of ethics of care.

Personally, I believe that PharmaCARE has overstepped the boundaries of reasonable resources usage. Whereas making an efficient use of the existing saving options is a legitimate action to be expected from an organization working on a global scale, exploiting the work of others and wallowing in extravagant environment is the epitome of unethical behavior (Crane, 2012). Therefore, I believe that the company’s current HR practices must be reconsidered as soon as possible.

It would be wrong to assume that the scenario described above is unique; quite on the contrary, similar breaches of ethics based on exploiting the work of others based on the latter’s unawareness of the benefits that they should be provided with is unfortunately common. Particularly, the case of H&M deserves to be mentioned. The H&M Company, which has become a household name for elegant and stylish clothes, has recently revealed that it uses sweatshops to produce clothes in a fast and cost-efficient manner (Winn, 2015).

Running sweatshops in a variety of third-world countries, including Pakistan and Cambodia, the organization abuses the rights of its employees on a global scale just like PharmaCARE does. The company clearly has opportunities to provide its workers with the conditions required by the state standards, yet H&M disregards the U.S. standards in an attempt to use cheap human labor. Much like PharmaCARE, H&M is not proud of its way of saving money by using cheap labor and tricking workers into taking the workload that they should be paid much more handsomely, as both organizations tried to sweep this fact under the rug.

In contrast to PharmaCARE, H&M does not rub its wealth in the staff’s faces. The employees are also aware of the fact that the firm underpays them, yet are forced to agree to the specified conditions due to the lack of employment opportunities in their country (Winn, 2015). The specified differences, however, do not make the actions of H&M any less atrocious than those of PharmaCARE.

In addition, unlike PharmaCARE, the H&M Company claims that it incorporates the principles of CSR into its framework. To be more exact, the company stresses the significance of sustainability as the basis for its use of resources: “All we do must be economically, socially and environmentally sustainable. It is all highly connected and equally important for our future growth” (H&M conscious actions: Sustainability report 2014, 2015). On the one hand, the specified difference in the companies’ design makes H&M more reliable than PharmaCARE. On the other hand, the fact that even sustainable development does not help the organization avoid the use of sweatshops shows that H&M needs to redesign the very foundation of its operations.

Although surviving in the increasingly competitive environment of global economy is a challenging task, a company must comply with the basic tenets of ethics as well as develop an adequate set of ethical principles, which the firm’s further choices will be based on. Although PharmaCARE can be described as a global leader in pharmacy, its treatment of its staff in developing countries defies every ethical standard ever set. Wallowing in luxury, the local representatives of the organization’s management make little to no effort in improving the conditions, which the local workers are in.

It can be suggested that the organization should alter its ethical standards and integrate the principles of CSR into its framework. The latter will allow for enhancing the staff’s readiness to alter their organizational behavior patterns. The latter, in their turn, will be shaped and altered gradually with the help of new ethical standards that the company will introduce into its framework. A present, it is highly desirable that the company should incorporate the standards of virtue ethics into its framework, as the specified concepts will help managers make the decisions that will satisfy all stakeholders involved.

Reference List

Brejning, J. (2012). Corporate social responsibility and the welfare state: The Historical and contemporary role of CSR in the mixed economy of welfare. Burlington, Vermont: Ashgate Publishing, Ltd.

Chakraborty, S. K., & Chatterjee, S. R. (2012). Applied ethics in management: Towards new perspectives. Berlin: Springer Science & Business Media.

Crane, A. (2012). Modern slavery as a management practice: Exploring the conditions and capabilities for human exploitation. Academy of Management Review, 38(1), 49-69.

Cremer, D. D., & Tenbrunsel, A. E. (2012). Behavioral business ethics: Shaping an emerging field. New York City, New York: Routledge.

Droppert, H., & Bennett, S. (2015). Corporate social responsibility in global health: an exploratory study of multinational pharmaceutical firms. Globalization and Health 11(1), 15–22.

Hamington, M., & Sander-Staudt, M. (2011). Applying care ethics to business. Berlin: Springer Science & Business Media.

H&M conscious actions: Sustainability report 2014. (2015). Web.

Nelson, B. (2013). Law and ethics in global business: How to integrate law and ethics into corporate governance around the world. New York City, New York: Routledge.

Occupational Safety and Health Administration. (2014). Workers’ rights. Washington, DC: OSHA.

Rajko, A. (2012). Behavioural economics and business ethics: Interrelations and applications. London, UK: Routledge.

Russell, D. E. (2013). The Cambridge companion to virtue ethics. Cambridge, UK: Cambridge University Press.

Trevino, L. K., & Nelson, K. A. (2010). Managing business ethics. New York City, New York: John Wiley & Sons.

United States Environmental Protection Agency. (2011). CERCLA overview. Web.

Winn, P. (2015). The slave labor behind your favorite clothing brands: Gap, H&M and more exposed. Salon. Web.

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