Does it Pay to be Unethical?
Introduction
A review of business history in the world and in economically developed nations such as the UK reveals that ethics has never been a popular concept among operating businesses and their leadership. As a result, there are countless instances of unethical business practices among firms that have operated within the United Kingdom, were such business practices actually gave these firms a competitive advantage over their competitors. It is important to note that there is a distinct difference between unethical and illegal business behaviour. In particular, there are a wide variety of business practices that would be considered highly unethical but are not in fact considered illegal. It is this distinction between unethical and illegal that underpins the continued use of unethical business practices within modern firms operating in the United Kingdom and abroad. It is difficult to understand, however, why many firms chose to maintain highly ethical business practices when their competitors engage in habitual unethical behaviour to achieve a continued competitive advantage over them. It is this phenomenon that will be explored in the following pages as a deeper understanding is sought regarding how unethical businesses in the UK are able to achieve greater success than competitors that employ only ethical corporate practices.
Workforce Exploitation
Although most developed nations have comprehensive regulatory and legislative frameworks in place to ensure their workforce is not exploited, workforce exploitation remains a major issue among UK businesses. In particular, prevailing research indicates that there are a large portion of UK firms that engage in workforce exploitation that generally occurs in one of two forms. In particular, the most prominent unethical practices involving workforce exploitation presented amid available literature include the use of sweatshop labour and endangered labour. Certainly the most recognized of the two types of workforce exploitation is that of sweatshop labour, which has gained increasing media coverage and public attention in recent years. Although a majority of the most prominent public criticism regarding sweatshop labour has involved major firms and brands in the United States, there have also been a number of cases where firms in the UK have engaged in similar activities by using sweatshop labour to facilitate the production process.
Although it is the contracted or offshored firm that directly engaged in the unethical workforce exploitation, the UK firms that profited from the use of such offshoring are also considered participants in the same unethical behaviour. In addition, many prominent UK firms, such as Primark and BHS, have taken a hard stand against workforce exploitation as a part of their corporate social responsibility. Inevitably, these socially responsible firms will suffer a disadvantage when they are unable to secure labour at the same or lower cost than the firms that employ sweatshop labour. Certainly recent years have placed additional pressures on all UK firms, including those that have previously utilized sweatshop labour, to act more socially responsible by no longer engaging in such types of workforce exploitation.
Another prominent example of workforce exploitation that is covered in prevailing literature is that of the case of De Beers Diamonds. As a firm that operates in the United Kingdom, the De Beers case represents a particularly compelling example of the devastating impact of unbridled unethical behaviour that ultimately enabled the firm to achieve extraordinary business success. In recent years, a great deal of attention has been turned toward the tactics that De Beers Diamonds utilized to procure their diamonds from suppliers in Antwerp and a number of incredibly poor African countries. The news media actually dubbed the diamonds hailing from these poor African countries as blood diamonds in order to describe the extreme danger that diamond miners face as they mine for and find diamonds. First and foremost, the pay that these poor miners receive for the diamonds they find is less than ½% of retail value. In addition, many of these diamond miners face incredible dangers from bandits that will kill them to steal the diamonds they have found or their daily earnings. Ultimately, De Beers boasts a long and illustrious history of success as the world’s largest diamond retailer and supplier. Importantly, incredible public pressure has been placed on De Beers to desist from using its traditional tactics to obtain diamonds, which has resulted in significant reforms throughout the diamond industry. The fact that De Beers was able to engage in such behaviour for the better part of a century unchecked while reaping tremendous business success is still difficult to comprehend.
Despite the fact that such strong evidence supports the contention that unethical businesses are able to achieve great success, there are also prominent examples of highly ethical firms that have also achieved fiscal success and enviable profits. An example of one such organization is Kellogg’s Company, which is a prominent producer of consumer products that include breakfast cereal and the like. Although Kellogg’s Company is headquartered in the United States, the firm has its largest factory located in Manchester UK. In recent decades, Kellogg’s Company has taken a proactive stance towards corporate social responsibility and ethics by establishing a company-wide code of ethics and developing and implementing a comprehensive corporate social responsibility program. As a result of these significant efforts, Kellogg’s Company has developed a sterling reputation as a highly ethical brand among industry professionals and the general public as a whole. What is perhaps most compelling is that Kellogg’s Company has also enjoyed financial and organisational success in the past and continues to do so to this day, even though they place such significant importance on acting ethically.
Based on the examples provided above, there is little doubt that firms in the UK and abroad can and do employ unethical business practices to gain an advantage over competitors while reaping business success. Today’s consumers do not look favorable upon firms that employ unethical practices, particularly practices involving workforce exploitation. As such, firms that are caught engaging in such practices will often suffer substantial brand damage and losses to income and profits. As a result, the era of unethical behaviour in business is coming to an end because the benefits are simply no longer worth the risks and associated costs.
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