Utilitarian Ethical Theories: An Analysis Of The Hershey’s Child Labor Ethical Scandal

The Case: Hershey’s Child Labor Ethical Scandal

Discuss about the Business Ethics for Ethics or Moral Philosophy.

Ethics or moral philosophy is that branch of philosophy which is concerned with defending, systematizing and recommending concepts of right and wrong actions (Murithi, 2009). Organisations today are not only expected to meet the demand of their consumers but also ensure that their business processes and functions are carried out in an ethical manner safeguarding the well-being and rights of all stakeholders involved. Over the past few decades there has been an increase in number of unethical practices most of them involving big trusted brands. One such big ethical scandal that was widespread in the media and became the headlines of almost all news channels was the reports of Hershey’s being involved in the use of child labor in its West African cocoa fields (Bloxham, 2012). This report aims at applying utilitarian ethical theories to analyse the Hershey’s child labor ethical scandal

The Hershey Company commonly known as Hershey’s is North America’s largest chocolate manufacturer (Hershey’s, 2015). The company sells its products in over 60 countries across the globe and its products are recognised worldwide for their taste and quality. Hershey’s is one of the leaders in chocolate industry and enjoys huge customer loyalty however lately the reports of it being involved in the use of child labor in its cocoa fields in West Africa brought huge negative publicity for the company (Baird, Guevara, & Karpechenko, 2012). A lawsuit was filed against Hershey’s by the law firm Grant and Eisenhofer accusing Hershey’s was using suppliers that are involved in serious unethical acts of child labor and human trafficking. As per the lawsuit the company was sued by one of its largest shareholders accusing the company’s Board of Directors for having supported the company in use of unlawful child labor and also integrating this illegal conducts in its business model (Bloxham, 2012). On one side under the name of its Corporate Social Responsibilities (CSR) the company owns the Milton Hershey School for male Caucasian boys in Pennsylvania which is one of the world’ wealthiest school with a worth of $ 7.8 billion and a student population of 2000. On the other side Hershey’s is involved in the unethical act of sourcing cocoa from West African suppliers who use child labor at their Cocoa fields. Inspite of tens of millions of dollars being spent by big chocolate makers in an effort to eradicate child labor in the chocolate industry, reports reveal that more than 2.1 million children in West Africa are still made to indulge in a highly dangerous and physically taxing process of harvesting cocoa (Fortune, 2016). Use of child labor not only has severe adverse affects on the overall health of these children but also keep them away from education which in turn hampering the economical growth and development of the region. Such an unethical conduct is not expected from one of the world’s largest and profitable food conglomerates. Hershey’s must take required steps to eradicate child labor from its supply chain to gain back the trust of its consumers.

Utilitarianism

Utilitarianism is one of the normative ethical theories which place the locus of right and wrong conducts completely on the consequences of selecting on action over other actions (Marques, 2015). As per this moral theory the action that maximises the sum of individual utilities is considered the right action and the one that minimises the sun of individual utilities is considered the wrong action. Utilitarianism is the preferred ethical theory of economists as it has a rational appeal that is caused from its means-end approach and brings it in close proximity with economical thinking (Marques, 2015). Being a form of consequentialism, utilitarianism emphasizes on the fact that end result plays a very vital role in deciding which act is right and must be chosen. Thus as per the utility ethics theory the act that produces the greatest good for maximum number of people involved is considered the morally right course of action. Based on the utilitarian ethical theories an organisation should ensure that all the activities they perform should be in interest of all their stakeholders and not just their shareholders (Trevin˜o & Brown, 2004). Apart from earning profit and maximising shareholders return on investment, organisations must ensure the well-being of their stakeholders which include their employees, customers, government, creditors, community, society and the environment in which they operate. An analysis of Hershey’s ethical issue shows that the company was focusing only achieving its own financial goals and was not concerned about the well being of children who were used as child labor in its West African cocoa fields (Bloxham, 2012). The children as Hershey’s employees still they were made to perform life dangerous and sometimes life threatening tasks while performing different tasks involved in cocoa production.

Robertsonab, Morris, Walter (2007) presents a more economic-oriented definition for utilitarianism as “a measure of the relative satisfaction or happiness of a group, usually considered in questions of the allocation of limited resources to a population. As per this definition of utilitarianism, the action that delivers maximum economic benefit is the morally right course of action. An analysis of the Hershey’s ethical issue based on this definition of utilitarianism proves the company’s act of using child labor at its cocoa field was morally correct from the point of its shareholders. Cocoa produced in West Africa is available to chocolate manufacturers at comparatively cheaper rates, specially the cocoa suppliers that use child labor offer much less price (Bloxham, 2012). Low cost of raw materials enable chocolate manufacturing such as Hershey’s keep their manufacturing costs low which in turn enable them offer competitive prices to their customers and earn good profit. This unethical act is morally correct from this view as it delivers maximum economical benefits. However from the point of children who are forced to work in cocoa field this act is morally wrong as this is keep them away from achieving economical growth in the future.

Act and Rule Utilitarianism

Utilitarianism can be further classified into two different categories namely, act utilitarianism and rule utilitarianism. Both these utilitarianism theories emphasize on the fact that morality of actions should be evaluated on the basis of the outcomes they produce, however the two theories differ over how to do that (Lewina, 2014). Act utilitarianism while deciding the morally correct course of action, the action that produces greatest net utility should be selected. As per this theory it is important to apply the principle of utility of selecting the action based on its consequences should be applied on a case by case basis (Robertsonab, Morrisc, & Walterde, 2007). Hershey’s decision to support the use of illegal child labor at its cocoa field was morally correct when the interest of shareholders were considered as it enabled the company earn more profit and deliver high return on investment. However when the interest of its other shareholders such as its employees, the children involved, the society, environment and its customers were considered its act to use children as slaves at its cocoa fields was highly unethical.

Rule utilitarianism contrary to act utilitarianism adopts a two part view that emphasizes on the significance of moral rules (Ho, 2015). As per the rule utilitarian theory, firstly an action that conforms to a justified moral rule is considered to be morally correct action, secondly a moral rule could be justified as a moral code if the outcome it produces is of greater utility when compared to already existing moral rules. Thus, an action is considered ethically right when it adheres with already existing moral rules and a moral rule can be used as a moral code if it produces greater utility. Analysis of Hershey’s ethical issues based on rule utilitarian theory shows that the company’s act of using child labor was not in conformity with justified moral rules and thus cannot be considered morally correct. Child labor is a serious crime in the court of law and is liable for allegations (Fortune, 2016). Also as this action is just in interest of company’s shareholders and is doing more harm than good to other stakeholders it cannot be accepted as a moral code. The key difference between the two utilitarian theories is that the act utilitarian theory applies the principle of utilitarianism directly to evaluate the morality of actions while rule utilitarian uses principle of utilitarianism to evaluate the moral rules and then evaluate selected actions by verifying whether or not they adhere with the moral rules.

Act utilitarianism as compared to rule utilitarianism is a natural interpretation of utilitarian philosophies as it applies the principle of utility direct to the action to be evaluated (Fisher & Lovell, 2006). Act utilitarianism yields maximum utility as every action that is performed delivers more utility than the other actions thus the sum total of utilities delivered by all actions will be the highest level of utility that can be achieved. Act utility ethics theory enforces the performer with the power of increasing the utility delivered by each action. Thus, as per the act utilitarianism Hershey’s has complete control over the activities it performs and possesses the power to enhance the utility delivered by its actions to do good for all its stakeholders (Ferrell, Fraedrich, & Ferrell, 2012). It was Hershey’s Board of Directors who made the choice of supporting illegal use of child labor at their cocoa fields without being concerned for the health and well-being of these children and hiding the dark truth from their customers. Act utilitarianism is better than rule-based moralities which expect individuals to follow moral codes irrespectively of the situation (Homann, Koslowski, & Luetge, 2007). For example rule-based moralities informs the performer not to kill anyone, however it does not inform the performer that killing is unethical, except when used for self defence. Act utilitarianism when applied to Hershey’s ethical issues informs the company that earning profit is good, however it should not occur at the cost of small children who are being forced to work under dangerous and sometimes life threatening work environments on cocoa fields. Act utilitarianism works against the traditional belief that morality is subjective and depends greatly on individual desires; instead it works on the belief that moral questions can be answered in objective manner also showing clear the difference between right and wrong moral beliefs (Waluchow, 2003). Hershey’s case as per this belief of act utilitarianism is morally wrong as it against the interests of all its stakeholders and brought negative publicity for the whole company, reducing its stock prices, ROI and profitability. The company has to face lawsuits and was forced by media and court of law to immediately eradicate the use of child labor from its supply chain. However like any other ethical theories, act utilitarianism is criticised on points such as giving wrong answers to moral questions and permits certain actions which is considered wrong by all (Ho, 2015). For example if it is possible to save three people using organs of a healthy person than as per act utilitarianism this act of killing the healthy person is considered morally right. Act utilitarianism is criticised for being against the moral rules as these moral rules are basis for trust between people within the society. Moral rules help guiding individuals towards the right actions and prevent them from choosing unethical actions under all circumstances (Lewina, 2014). For example, if a man is informed to kill for self-defence most of the killers will start killing under name of self-defence. Act utilitarianism is also criticised for impartiality and equal consideration of interests as there are actions which is delivering high utility to ten people but is doing bad to two people still the act will be considered morally wrong.

Conclusion

An analysis of Hershey’s ethical issue of being involved in use of child labor at its cocoa fields is considered unethical and morally wrong using both the act and rule utilitarianism theories. Act utilitarianism was considered more effective in analysing the case it is gives an opportunity to find objective answers for moral questions. It proves that hershey’s act of using child labor did not deliver high utility for any of its stakeholders and brought high negative publicity for the company.

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