‘Ethics’ originally comes from the Greek word ethos, which means character or custom,
covering both the personal choice component with the presence of a social or cultural
inspiration. Socrates believed that people could learn to behave ethically (Lisa Matthewman,
2009); yet ethical behaviour is difficult to quantify since the field of ethics is constantly
evolving and changing. In HRM, ethics is defined with the words, representing all that is seen
as ‘good’ or ‘moral’. According to many writers, ethics and morality have been defined as
synonyms, such as morality worries traditions of belief about good and bad conduct, whether
by an individual, a group or a society (Maclagan, 1998). Morality is also defined as, ‘the
customary, social practices and activities that are considered importantly right and wrong;
the rules that govern those activities; and the values that are embedded, fostered, or pursued
by those conventional, sociological activities and practices (Joseph A. Petrick, 1997).
Ethics are a set of moral principles and values that influence the decisions and actions of
individuals within the organisation (Gold, 2012). These principles reflects the cultural values
and norms of a society or organisation. Ethical dilemmas arise when two or more values
conflict, for example China is the largest energy producer and consumer with a fast-growing
economy in the world but to keep the economic growth running involves burning more fossil
fuels every day, although is harmful for the environment. So, the growth of modern China is
not possible without compromising the environment, which is a widespread sign of unethical
behaviour by a country.
Business cannot be operated in isolation. It is constrained and moulded by external factors,
which rely on the environment to provide new materials and ecosystem services, society for
the provision of labour and the market for the economic activity. Nowadays business
sustainability is a real everyday business issue. According to the World Council of Economic
Development (WCED) sustainable development “meets the needs of the present without
compromising the ability of future generations to meet their own needs” (WCED, 1987, 2004).
So, to be sustainable a business must consider some important issues have no alternative,
such as economic efficiency (innovation, prosperity, and productivity) social equity (poverty,
community, health and wellness, human rights) and environmental accountability (resource
use, climate change, land use, biodiversity and pollution). These three elements often stand
against each other and a business should be aiming to optimise the outcome of all three.
The violation of moral principles often starts from the bottom of an organisation by damaging
‘Psychological Contract’. There are several definition of psychological contract, some of the
key definitions comes from Rousseau (1989) and Morrison (1997). They develop their concept
as ‘an individual’s belief regarding the terms and conditions of reciprocal exchange agreement
between the pivotal party (mostly employer) with another party (employee). However, the
concept of psychological contract was only concerned with an exchange agreement among
proprietor and worker. The psychological contract is also defined as “a set of individual
obligations or expectations unknown to the employer in respect of the exchange relations
between the parties involved”. (Dadi, 2012, p. 98)
The prime concern is the wide absent and sometimes abuses of that term ‘psychological
contract in the workplace. Surprisingly most of the renowned media like BBC, CNN, France24
and even Aljazeera are barely talk about the term (Dadi, 2012). Psychological contract
become popular mainly due to breakdown and amendment ancient deals according to the
necessity of modern society. Representatives of both employer and employee often focuses
on negotiation between them. The Trade Union, workers associations and also political
parties played a vital rule to protect the contractual right of an employee.
Another important factor come under consideration in modern business is ‘employment
relationship’. It was developed and replaced from the term ‘industrial relations’, but explain
pretty much same kinds of promise. As businesses are developing rapidly and the whole world
considered as a single market, the employee relations are at big stake. In 2004/5, huge
research was done about the moving nature of employee relations at work place in UK
organisations, by interviewing HR and Employee Relations managers to creat the shape of
current approach and practice. The Report also found the influence of trade union is decline
and the main focus are on individual relationships. (CIPD, 2014).
Recently, Labour leader Ed Miliband promised to tackle the ‘epidemic’ of zero hours contracts
if labour wins the next election. Zero-hours contracts allow organisations to hire staff without
any guarantee of work, employees only paid for whatever hours they work. “The government
own figures say they have increased three–fold since 2010 and some estimates suggest there
are one million people on the contracts across the UK (BBC, 2014). According to their
psychological contract, employers should look after those huge numbers of short-term
flexible workforces, but in reality the worst abuses of the system has left too many people
not knowing how they will make ends and meet from one week to the next with an uncertain
future plane. Mr Miliband also said, “The best employers know that the zero hour’s contract
are not the way forward for a productive motivated workforce” (BBC, 2014).
Zero-hours Contract is the harsh reality of capitalism, which is continually damaging the
relationship between the employers and shareholder. It drives a generally contented work
force from all round level of happiness to crisis in every aspect because affording basic
necessities become impossible. For example, Cineworld employs 80% of 4300 staff on zero
hour’s contract, most of the other cinema theatres across the UK have same story except 500
staff of Odeon cinema have regular working hours contract (Gurdian, 2013). As a result, a
large number among those employee join trade union to get protection. Several Protester
came out in the street of London for living wages and grunted working contract (Gurdian,
2014).
Corporate Social Responsibilities (CSR) of an organisation always impacts on its decisions and
activities to the society and the environment. It is generally agreed that, CSR is about
organisations ‘doing right things’ and going an extra mile beyond legal requirement to reduce
negative impacts. In 2001, the European Commission defined CSR as ‘a concept whereby
companies integrations with their stakeholders on a voluntary basis’ (Koleva et al; 2010,
p274). The concept of CSR is tricky, as it is the managers not the organisation who are
engaged in unethical behaviour and actions, which compromises minimum compliance based
regulations. For example, ‘in Bhopal, India, a comical plant owned by the US global company
Union Carbide operated under conditions considered illegal in the USA. On 3rd December
1984, the plant experienced a major leak. Within hours, 3000 people were dead, with 15,000
more dying in the aftermath; 200,000wre seriously injured and 500,000 still carry special
health cards’ (Gold, 2012, p. 45). Eventually, Union Carbide paid out just $470 million in
compensation (Saul, 2005).
A company always needs to be aware of the difficulties of ethical practice. The existence of
ethical practices and principles need to be developed with the support and adaptation
throughout the business as well as to work under partnership with many industries and
international bodies, which will also ensure the rights of employees. When an organisation
operates in a responsible way, for example, throughout regular audits and working in cooperation with its supply chain to solve problems in a diplomatic way, which also build
confidence in brand. The reputation of the business grows; stakeholders are pleased to be
associated with them, as a result the risk to the business from poor publicity on ethical issues
starts to reduce. Good business practice involves being sustainable for a long period of time.
A business is ideal and sustainable when it makes profit for shareholders, after good
employment opportunities for its staff, pay taxes to state wherever in the world it operates
and at the same time fulfil the needs of its consumers. An ideal business that makes profit is
able to make a significant contribution to society and also look after all of its stakeholders.
The employment relationship within an organisation permeates via existence and practices
of ethical behaviour. There is a debate on whether Human Resource (HR) practitioners, who
are probably the moral authority, discussing on the mounting interest in ‘ethical stewardship’
in decision making and the role of the HR professional as a ‘guardian of ethics’ (Gold, 2012).
However, Human Resource Management is a business function always apprehensive with
supervising relations among the groups of people in their capacity as workers, proprietors
and leaders. Inevitably, this process may raise questions about what the respective
responsibilities and rights of each party are in this relationship, and about what constitutes
fair treatment. These questions are ethical in nature, and make huge impact on the
employment relationship when organisations try to maximise shareholder return. In 21 st
century, every organisation has a policy called, Corporate Social Responsibility, but in reality,
examples of unethical organisation abound.
In 2005, Primark was voted the most unethical retailer in the UK, research was taken by Ethical
Consumer magazine (Whitehead, 2005). While Primark’s popularity is not in doubt, the
retailer has been subject to criticism about its suppliers’ use of cheap factory labour. After all,
critics argue, selling a T-shirt costing £1.96 is not possible without cutting corners somewhere.
Primark has been targeted by so many human right forum and review sites, blogs, and also
on YouTube where there are many videos with comments threads, and much discussion
around their ethical stances and claims. The BBC programme Panorama (June 2008)
denounced some of Primark’s business practices, the report shows, the treatment received
by labourers working for Primark’s suppliers including the employment of illegal child labour.
The Panorama programme “triggered a barrage of negative publicity, with footage of child
refugees in India making low-cost garments for Primark” (Panorama, 2008). In 2011, after
three years of lengthy investigation by Primark and a full review by the BBC confirmed that,
some of the footages had been faked (Primark, 2011). But the worst were yet to come, in
2013, a seven storied garments factory called ‘Fantom Factory’, was one of the suppliers of
Primark, collapsed near Dhaka in Bangladesh causing the death of over 2000 people (Burke,
2013). On the other hand Primark has enjoyed a ‘magnificent year’ where profits were
mounting by 30 %( 662m) with the sales of close to £5bn (Jennifer Rankin, 2014).
Ethical Trading Initiative (ETI) Director Peter Mcallister gave his reaction to the disaster, he
said, Primark is not alone – a lot of companies for too many years have been through a
complacency model, sourcing from Bangladesh but not taking the issues and conditions
seriously, they have a significant responsibility to make it clear that they will only source from
factories that meet international standards. (Anon., 2013). As the death tolls mounted,
international operators Bangladesh distance themselves from the accident. ‘Benetton Group’
and Spanish retailer ‘MANGO’ denied that, the collapsed factory was not their official supplier
and went further, it refused to pay any compensation to the workers to the ‘Fantom Factory’.
But in reality, thousands of pages of order documents and samples were found in the rubble,
some of them show 25 thousands of garments were due to be delivered by mid June 2014
(Youtube, 2013) .
After all those tragic consciences, fashion companies of western country get away with any
significant panties. The most surprising mater of all, is the healthy existence of those unethical
organisations, who are continually maximising the profit of their share holder. There are
several reason to blame such as, poor economy, lacing of appropriate law to protect the
workers, corrupted political agenda and so on. So there still plenty of workers looking for jobs
in those Far East countries like China, Bangladesh, India, Indonesia etc. those vulnerable
continually fall on a victim of those cunning organisation and their middleman suppliers.
Another example were recently discovered by BBC panorama about unethical activates done
by one of the words most renowned company called ‘Apple’. As a company it worth more
than half a trillion dollars. In 2014, it sold 169 million iPhone, 68 million iPad that makes them
$39 billion profit with $155billion in the bank. Apple always promote an ethical production
model, but in reality things were not done as promised. In 2010, 14 workers killed themselves
at Apple’s biggest supplier a company called ‘Foxconn’. Long hours, harsh discipline and poor
living conditions are all set to be factors, instead of improving the working environment the
company put nets to make it harder for the workers to take their own lives. It also found,
children in Indonesia were working in the dangerous mine for ‘Tin’ the industry need and
some of them were supplied to Apple (Panorama, 2014).
However, companies around the world has significant pressure to develop ethical
understanding, some of them were brought to justice for their unethical activities. In a survey
conducted in 2010 among U.K and some continental Europe companies; it was revealed that
the most significant ethical issues to organisations are bribery, corruption and facilitation
payments; whistle blowing/speaking up and discrimination, harassment or bullying (Simon
webley, 2011) . For instance, company called Texaco in 1996 had to pay $176 million penalty
payment for ethnic discrimination; in 1998, Mitsubishi Motor Corporation’s had the
consequence of $34 million after a government enquiry proved the pervasive sexual nuisance
and Louisiana - Pacific Corporation were fined $37 million in 1998 customer and
environmental fraud had been proved among other unethical practices.
Ethical conduct in business practice and HR are now obligatory for the European companies.
In 2000, ‘the European Union included a requirement for social and environmental reporting
in its fourth company law directive. The EU also voted in May 200 to develop a label to
endorse products made by companies that can demonstrate commitment and respect for
human and trade union rights. ‘The Global Compact’ launched by the United Nations in July
2000, encourages companies to incorporate nine human rights in to their strategies and
business dealing, and to consider a broad range of stakeholders in setting strategy.
Ethics must certainly initiate at the top. Leaders cannot shrink from their duties to set an
ethical example for their supporters; official ethical codes and ethic training have a very poor
expectancy of success unless the ethical actions and behaviour of highest management are
consistent with what they clarify.
There is no doubt about the importance of ethical issues around the word. It is describes as a
phenomenon to corporate organisation and corporate leaders. A broad ethical awareness and
concern for all stakeholder including employer and employee. Therefore, leaders have to
create more friendly work environment for all workers as well as all the shareholder must
have the knowledge of ethical behaviour. Instead of maximising the profit, organisation
should act as a role model and put mechanism in practice for the enlargement of responsible
employees. Indeed, every employees want to work for a moral and responsible employer and
as such, corporate leaders has to fulfil their commitments on ethical issues and their
expectation need to be risen up.
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