Business ethics ensure adherence of an organization with ethical principles towards marinating its long term sustainability. Fair workplace practice is also an important part of business ethics for ensuring sustainable business (Michaelson et al. 2014). Unethical business practices are engaged in unethical conducts, unfair treatment to employees, customers or public. This study will discuss the unethical business practices in terms of employee exploitation. Employee exploitation is the act of treating employees unfairly for the benefits of organization (Arnold, Goodpaster and Weaver 2015). This study will discuss the employee exploitation business practice of 7-Eleven in Australia. The impact of such business practice on the stakeholders will be concern for this study. The study will also highlight the main issues of business practice along with its effect on reputation of the organization. Furthermore, some legislation will also be highlighted in this study, which can prohibit such unethical business practice. Apart from that, the study will also demonstrate appropriate recommendation to be adopted by organization in their forward moving.
The business practice of 7-Eleven has mostly affected the migrant employees and students. Such employment practice is actually hampering the mental condition of the migrant students, who used to work in this organization for earning some money beyond their studies (Terry-Armstrong 2016). As per my opinion, the threat of Visa cancelation and forcing them to work beyond the working hours is affecting both the mental as well as physical condition of those students. Apart from that, the unethical business practice of the organization is also leading financial crisis for the employees (Sivaraman and Turner 2016). Moreover, the organization is exploiting the employees by underpaying them as per their working hours. Furthermore, I think that the cash back system of 7-Eleven is also leading to financial emergency for the employees. In such strategy, the employees are forced to giving back some amount of their salaries back to the employers.
Such business practice has also affected the managers, where they are being alleged legally and being answerable to the court and media. Apart from that, I think that shareholders are also affected by this business practice. Moreover, such strategy has destroyed the organizational reputation in the market, which has reduced the profit level of the organization. Therefore, the shareholders are not getting their adequate return on investment from this organization.
The main issue relies in the business practice of 7-Eleven Australian Franchises is employee exploitation. Moreover, the organization has been claimed with underpaying the employees, where it is also forcing the employees to work beyond their normal working hours. Moreover, the organization has also falsified the payrolls of the employees, where the managers has recorded just half the working hours in comparison to actual working hours of the employees (Ferguson and Danckert 2016). As per my viewpoint, the intension of the managers towards gaining instant profit has led them towards exploiting the employees unethically.
The organization also has cash back system, where it initially provides bonuses the employees, but later on, it forces the employees towards paying back some amount of salaries back to the management (Ferguson 2016). Such unethical employment practice is even leading to legal complication for the organization. 7-Eleven is also facing ethical issue for their practice of threatening the migrant students with the fear of Visa cancelation for breaching the contract of student Visa (Karp 2016). In this way, the organization is forcing those employees to work beyond their normal working hours. As per my opinion, the main issue of 7-Eleven is breaching the workplace ethics and laws.
The wage scandal of 7-Eleven has destroyed its market reputation. Moreover, the unethical business practice of the organization has quickly spread among various media channels. Fair Work Ombudsman has majorly investigated the unethical practice of the organization. From my viewpoint, the disclosure of such unethical business practice has created a highly negative impact on the organizational stakeholders. It has ultimately diminished the corporate image of the organization in the market. The court has also imposed penalties of 1 million on 7-Eleven operators for concealing the underpayment and falsifying the record. I think that the legal allegation against 7-Eleven has added to its diminishing corporate image. The shareholders are being unwilling to invest in such fraudulent organization, which is also diminishing the corporate image of the organization (Fraser 2016). Apart from that, the unethical business practice of 7-Eleven has also become viral on social media. It is spreading the unethical business practice of the organization across Australia, which is also destroying its global market share.
The Minimum Wage Act of Australia prohibits the unethical business practice of 7-Eleven. As per this act, the managers cannot undercut the minimum wage rate of the employees (Kemp 2014). However, 7-Eleven is paying on $10 an hour to the migrant employees. Such practice is actually breaching the Minimum Wage Act of Australia. However, proper implementation of this legislation can be effective for the preventing the unethical business practice of 7-Eleven. As per my opinion, Fair Work Act also prohibits the unethical business practice of 7-Eleven. Fair Work Act sets the standard working hours for the employees. As per this act, no employee should work more than 40 hours a week (Matthews et al. 2014). However, the organization is pressurizing the employees for working beyond 40 hours per week. In this scenario, 7-Eleven is violating the Fair Work Act.
On the other hand, I also think that Student Visa Legislations of Australia also prohibits the unethical business practices of 7-Eleven. As per this legislation, no foreign students are permitted to work beyond 20 hours a week during their school session (Kemp 2014). However, 7-Eleven is pressurizing the foreign students to work more than 40 hours. Therefore, such business practice is actually breaching the legislation of Student Visa Rules. However, in my opinion, regular vigilance of the statutory bodies can be effective for preventing such unethical exploitation of migrant students.
I recommend that 7-Elevn should make a compliance partnership with Fair Work Ombudsman for ensuring effective business practices within workplace. Moreover, compliance and corporation with this legal and regulatory agency will ensure secure and fair working environment for the employees of the organization. It would help the organization in better complying with employment relation legislation in future.
As per my opinion, 7-Eleven should initiate effective governance arrangement in future. Such governance arrangement will facilitate the organization in complying with all federal workplace laws. Therefore, the organization will be able to ensure that the employees are getting their right benefits. In this way, the organization can move forward for ensuring fair and ethical workplace for the employees.
I recommend that 7-Elven should have proper staff consultative forum to minimize the gaps between the employees and employers. Such consultative forum will raise the issues of the employees to the employers for mitigating them in an urgent basis. In this way, the organization can ensure a better business practice for its sustainable business.
Conclusion
While concluding the study, it can be said that 7-Eleven is practicing an unethical business practice. Moreover, the issue of the business practice is that the organization is exploiting the employees by underpaying them. As per my opinion, the organization is practicing such unethical and fraudulent business practice of earning instant profit. At the starting of the course, I used to believe that all reputed business organizations maintain business ethics for ensuring ethical business practice. However, my opinion has been changed from the beginning of the course with the unethical business practice evidence of 7-Eleven. Such business practice is actually hampering the mental and physical condition of the migrant employees. Moreover, I like to recommend the organization to ensure proper workplace arrangement for fair and ethical organizational practice.
Reference List
Arnold, D.G., Goodpaster, K.E. and Weaver, G.R., 2015. Past trends and future directions in business ethics and corporate responsibility scholarship. Business Ethics Quarterly, 25(4), pp.v-xv.
Ferguson, A. 2016. Revealed: How 7 Eleven is ripping off its workers. [online] Smh.com.au. Available at: https://www.smh.com.au/interactive/2015/7-eleven-revealed/
Ferguson, A. and Danckert, S. 2016. 7-Eleven’s wage fraud sparks $170 billion blow back. [online] The Sydney Morning Herald. Available at: https://www.smh.com.au/business/retail/7elevens-wage-fraud-sparks-170-billion-blow-back-20160826-gr264h.html
Fraser, M., 2016. Investigating 7-Eleven: Who are the real bad guys?. Griffith Journal of Law & Human Dignity, 4(2).
Karp, P. 2016. 7-Eleven workers beaten and forced to pay back wages, Senate inquiry hears. [online] the Guardian. Available at: https://www.theguardian.com/australia-news/2016/feb/05/7-eleven-workers-beaten-and-forced-to-pay-back-wages-senate-inquiry-hears
Kemp, V., 2014. Antecedents, consequences and interventions for workplace bullying. Current opinion in psychiatry, 27(5), pp.364-368.
Matthews, L.R., Fitzpatrick, S.J., Bohle, P. and Quinlan, M., 2014. Investigation and prosecution following workplace fatalities: Responding to the needs of families. The Economic and Labour Relations Review, 25(2), pp.253-270.
Michaelson, C., Pratt, M.G., Grant, A.M. and Dunn, C.P., 2014. Meaningful work: Connecting business ethics and organization studies. Journal of Business Ethics, 121(1), pp.77-90.
Sivaraman, G. and Turner, P., 2016. The 7-Eleven wages scandal: The need for law reform. Precedent (Sydney, NSW), (135), p.53.
Terry-Armstrong, N., 2016. 7-Eleven: A case study of a flawed franchise model. Busidate, 24(2), p.8.
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