Question

Although there has been an heightened awareness of the importance of ethical business decision, some companies still continue to exhibit unethical business decision-making behavior. Share recent examples of companies that have crossed ethical lines.

Answer 1

Making Ethical Business Decision is key success of Business. Sometimes Ethical Business Decision may lead to achieve the weaker short-term financial result than counterparts. Knowing how to make ethical business decisions can help you to set the standard throughout your organization, helping your company to garner a strong, positive reputation in the marketplace while securing a loyal customer base.

How to make the ethical Business Decision can be understood with following Points.

1. Create a code of ethics and consult it before making business decisions.
2. Consider the effects of your decisions on all stakeholders
3. Use industry regulations as a starting point when making decisions
4. Consult others when making decisions with widespread consequences
5. Review the results of your past business decisions and learn from your mistakes.

Ethical Business Decision is important for the Society & Environment where Business is operation. Following key importance of Ethical Business for any Entity

1. Attract customers to the firm’s products, which means boosting sales and profits
2. Make employees want to stay with the business, reduce labour turnover and therefore increase productivity
3. Attract more employees wanting to work for the business, reduce recruitment costs and enable the company to get the most talented employees
4. Attract investors and keep the company’s share price high, thereby protecting the business from takeover.

Referring the case of Trafigura Company who were dumping their toxic Waste in the unethical way causing serious disease to people who were coming into contact to the waste. Case was as follows

  Earlier in the year, there was media frenzy in the U.K. over celebrities getting court injunctions to silence the press from reporting on their various misdeeds and grubby encounters. This story actually stems from a far more serious beginning, in 2006.

Trafigura is a multinational formed in 1993, trading in base metals and energy, including oil. It makes almost 80 billion USD a year. In 2006, it caused a health crisis affecting 108,000 people, after a ship leased by the company was told that, due to toxicity levels higher than expected, the price of transferring the waste on board to the processing plant in the Netherlands had increased twenty-fold. To avoid the charge, Trafigura ordered the ship to dock at other seaports until they could find someone who would dump the waste. At Abidjan, Côte d’Ivoire, one of Africa’s largest seaports, the waste was handed over to a newly formed dumping company, Compagnie Tommy, which illegally dumped the waste, instead of processing it. Many people there became sick due to exposure to the waste, and investigations began to determine whether it was intentionally dumped by Trafigura. Trafigura said in a press statement that their tests showed the waste not to be as toxic as had been claimed.
This was proven false by a 2009 UN report posted by Wikileaks.

When newspapers came to publish their own findings, which proved that Trafigura was guilty of releasing toxic waste, they “lawyered up” and started firing legal notices to all news outlets which were saying there was a connection between the dumping and the injuries reported in the Ivory Coast. The Guardian newspaper had conclusive evidence that Trafigura knew of the dumping, and had a report they were ready to publish, however the libel firm hired by Trafigura, Carter Ruck, applied for a super-injunction so that the paper couldn’t publish the report until a court decision was made. This caused MP Evan Harris to question the freedom of the press in the country. However, after a twitter campaign that spread the story in a matter of hours, the libel firm responsible backed down and allowed the report to be published.

Carter Ruck are still pursuing a libel case against BBC Newsnight for allegations made on television (later proven true by an independent report).