Tesco is a leading superstore chain in the United Kingdom with its headquarters at Cheshunt, UK. Tesco is also the third largest retailer in the world, coming after Wal-Mart and Carrefour. As per the data of the year 2010, the superstore had around 4800 stores across the globe, with a strength of nearly 470000 employees and making £62.5 bn group sales. Some of the common product line in Tesco comprises of groceries, electrical goods, home and electrical appliances, furniture, clothing and jewellery, and insurance services. The company performs its highly appreciated business with the motto of “Every Little Helps” (Haerifar 2011).
A number of ethical issues have come up in the past pertaining to the functioning of the company. The supermarket chain is often found to be in headlines for having involvement in litigation, majorly from claims of unfair dismissal made by employees, claims of personal injury made by customers, as well other different commercial matters like treatment given to suppliers. The public perception is that the company behaves unethically in a number of instances. One major concern that has grabbed the attention of concerned authority is ethical issues of Information System. The approximate number of employees working for Tesco is around 472000, and they hold valuable financial and personal information. These data are to be protected following the Data Protection Act, strongly committed to having the information kept private and not sold to a third party (Benn, Dunphy and Griffiths 2014). According to Todnem and Burnes (2013), Tesco has a major impact on the environment due to their process of manufacturing their products and the raw materials that are used. The process by which the raw materials are acquired has gained attention for being inappropriate. The company is responsible for improving on what they are presently doing for achieving the aim of being answerable to the communities that are served.
Ferrell and Fraedrich (2015) point out that the identified ethical issues of Tesco have a deep impact on the majority of the stakeholders of the company, if not all. The customers, suppliers, employees, managers are all impacted to different extents by the ethical issues arising from the functioning of the company. Stockholders want to ensure that the managers are having a proper ethical conduct and are not risking the capital of the investors through engaging in actions that are unethical. Though the aim is to have maximised return on investments, any unethical approach would hamper the reputation. The managers are responsible for looking after the financial capital as well as human resources for increasing the performance. Multiple interests are often juggled by them, and in due course, they may resort to any unfair means. However, any unethical practice has a poor impression on them as well. They may loose on to their job positions or loose respect. The employee is the ones who are greater impacted by the unethical issues since the impact is directly on them. The domains where unethical approaches make a mark are payments, security and health and safety at workplaces. Safe and ethical practices promote employee engagement through the provision of a structure in the workplace that is equitable and fair. The suppliers and distributors expect that they would be paid in a fair and prompt manner for their contributions and inputs. Distributors expect that they would receive best quality products at prices that have been agreed upon. Weiss (2014) in this regard state that customers are the most critical stakeholders of the company. If the company does not work for increasing the effectiveness and efficiency of their work in an ethical manner, loyal customers would not be created, and new ones would not be attracted.
The aspects that are linked to impact on stakeholders due to the ethical issues encompass higher wages versus profits, pollution versus production, consumer prices versus supplier benefits and needs of the concerned stakeholders versus survival of the company. Customers, employees, shareholders and suppliers are the major stakeholder groups who have a major connection with the ethical issues of Tesco. All the ethical concerns have a direct impact on the customers as they are the ones who are affected at large. The company must pay attention to the satisfaction level of the customers as they hep in holistically establishing the identification and reputation of the company. It is necessary that the company realises the needs, of offering high quality products through an ethical process and attributing to the success of the company (Hoffman et al. 2014).
Normative theories of ethics are the moral theories that can guide the functioning of any company and help the company to analyse efficiently the environemt, internal and external, to conduct their business. Ideas can be synthesised with the help of such theories that aid in creating alternative responses for solving ethical dilemmas. Problems solving is made easy with the help of contemporary ethical principles. The dilemmas that organisations face, arising from external and internal environments, can be purposefully solved if such ethical theories are abided by (Strudler 2016).
The first ethical theory that can be applied to Tesco for improving the standard of adherence to ethical principles is the theory of consequentialism and non- consequentialism. Kalajtzidis (2013) highlights that normative ethics are aligned with the fact that morality is dependent upon actions. The consequentialism theory is based on the principle that morality of actions is to be judged by the results, that is, consequences, it creates. As per this theory, action can be judged from the understanding of whether the action brings a positive outcome or not. From this viewpoint, an immoral action is the one that has a negative impact. A common method of expressing this idea is that the end of the action is responsible for justifying the action to be ethical or not. If something beneficial is achieved, then the act is ethically and morally correct but if the outcome is not beneficial then on ethical unds it is unjustified. Non-consequentialism theory applies that the morality of an action is to be based on the adherence to rules that have been previously accepted. The outcome, in this case, does not really matter to the stakeholder. What is crucial in this regard is the intention with which it has been done. This means that the society needs to determine whether the act is moral or immoral. This assumes that the society is moral. However, this concept is under questions as a number of factors determine whether the society is moral or is at fault (Portmore 2016).
Tesco to follow consequentialism and non consequentialism ethical theory is a topic of concern and has been widely researched onto for many years. While one source of evidence indicate that consequentialism theory would be best applied to the company, another source of evidence highlight that non- consequentialism theory would be better applied to the company (Hiller, Ilea and Kahn 2013). Abiding by the principles of consequentialism would benefit Tesco since the focus would be on the results of the actions taken by the company. It has been found that the customers of the company are at a loss due to the unethical approaches and this indicates that consequentialism is the best suited approach for the company to take. At the end, it is the results that everyone is concerned about and if the results are not good then the actions can at no cost be stated to be justified. Arguably, consequentialism is inherent in the conception of morality, that many traditions and cultures share. These cultures hold the moral perfection implying that morality and ethics is to support all. Baines, Fill and Rosengren (2016) contradict that the spirit of consequentialism aims to consider goodness from an impersonal and impartial point of view. Consequentialism has a major conflict with common sense. Against this backdrop Tesco may need to assess the validity of the results and consequences of the actions that are under the scrutiny for ethical concerns before deciding on whether to take the consequentialism approach. According to the author it is to be the believed that a consequential approach may be beneficial for illustrating the impact of different types and amounts of consumption on remote animals for the company.
The second ethical theory that may be applied to Tesco is Virtue Ethics. Virtue ethics is an ethical approach that has the focus on the characteristics of an individual as the prime element of ethical thinking instead of the consequences or the acts themselves. The virtue is the agreed upon the character or positive trait that makes the possessor an ethical and good individual. It is, therefore, different from single feelings or actions. It can be attributed to generosity or honesty, and it is morally valuable. It is also referred to as a disposition that is normally well entrenched in the possessor (Annas 2017).
Arnold, Goodpaster and Weaver (2016) opine that virtue ethics can be positively applicable for all companies that need to come out of the banding for being unethical. The authors suggest that virtu ethics can be used as a flexible frame work for considering cases like child labour that are highly exploitive. The questions would then come to the types of virtues the stakeholders need to reflect on, like generosity and compassion. A persistent danger in this form of ethics is that there is a chance of assuming that one culture possess certain virtues than the other. Virtue ethics can be suitably applied to Tesco for bringing in developments in relation to ethical principles followed. There would be a number of advantages of using the framework of virtue ethics in the company. The first would be to motivate the employees to work on a moral ground. Moral reasoning would be mapped on to in all cases, unlike other theories where a rule is to be followed in case of ethical dilemmas. Individuals are often biased in making decisions. Virtue ethics would be acknowledging this and support that it is good to have partial view points at times. Self improvement would be the underlying principle. This would foster building up morality in individuals and lay provision for moral reasoning. However, there would be difficulty in identifying the motives of the employees and understand whether someone really wants to develop their moral values. It is also difficult to predict whether the morals would take the company to and what would be the ultimate outcomes of the approach (Schlegelmilch 2016).
Conclusion
Having good ethical practices is vital for all companies, big or small, as ethical practices help to maintain the brand image of the company and reputation of the company. Therefore, as Tesco has developed a bad reputation for itself due to unethical practices, it is desirable that the company takes up appropriate measures for preventing customer loss and community loyalty and trust. Taking up ethical measures to combat the challenging ethical issues is required for preventing the market shares to drop and gaining it back. In order to be in the good books, Tesco must act ethically and gain back the trust of the community and the confidence level in their products and practices. Acting by oral and ethical principles would enable the company to continue maintaining its position as one of the leading supermarkets in the world. This would be highly beneficial for the company in order to hold it position in the highly competitive globalised market. The ethical principles of consequentialism would be best suited for the company as the focus would be on the end results. Virtue ethics would be advantageous on the grounds that the employees of the company would be motivated to build within themselves the essence of generosity and reliability. Though virtue ethics attempts to make the employees of the organisation, at all levels, a better individual, instilling qualities may be difficult. Tesco needs to act ethically in all aspects they have to deal with for benefiting the community at large. Simultaneously, for penetrating into more countries and maximising the shareholder’s value it is required that ethics are maintained. This would bring more profits to the company and help in achieving sustainable growth every year.
References
Annas, J., 2017. Which Variety of Virtue Ethics?. In Varieties of Virtue Ethics (pp. 35-51). Palgrave Macmillan UK.
Arnold, D.G., Goodpaster, K.E. and Weaver, G.R., 2016. Past trends and future directions in business ethics and corporate responsibility scholarship. Business Ethics Quarterly, 25(4), p.1.
Baines, P., Fill, C. and Rosengren, S. (2016). Marketing. 1st ed.
Benn, S., Dunphy, D. and Griffiths, A., 2014. Organizational change for corporate sustainability. Routledge.
Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases. Nelson Education.
Haerifar, P. (2011). Performance Management in Tesco. 1st ed. Germany.
Hiller, A., Ilea, R. and Kahn, L., 2013. Consequentialism and environmental ethics (Vol. 25). Routledge.
Hoffman, W.M., Frederick, R.E. and Schwartz, M.S. eds., 2014. Business ethics: Readings and cases in corporate morality. John Wiley & Sons.
Kalajtzidis, J., 2013. Ethics of social consequences as a contemporary consequentialist theory.
Portmore, D.W., 2016. The Dimensions of Consequentialism: Ethics, Equality and Risk, written by M. Peterson. Journal of Moral Philosophy, 13(6), pp.747-750.
Schlegelmilch, B.B., 2016. Global Marketing Ethics and CSR. In Global Marketing Strategy (pp. 195-220). Springer International Publishing.
Strudler, A., 2016. Guest editor’s introduction:: Normative business ethics in a global economy: New directions on donaldsonian themes. Business Ethics Quarterly, 25(4), p.15.
Todnem, R. and Burnes, B. eds., 2013. Organizational change, leadership and ethics: Leading organizations towards sustainability. Routledge.
Weiss, J.W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-Koehler Publishers.
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