AWB Company: Ethical Value and Practices

Introduction

A WB is a leading Australian company involved in the international marketing of Australian wheat. The company was listed in the Australian stock exchange in 2001 long after taking over from the Australian wheat board. Its responsibilities entailed seeking an international market for Australia Wheat a factor that saw it trade with Iraq since 1945. The popularity of the company intensified in 2005 when it made headlines in the press over its involvement in the food for fuel program in Iraq.At this time the united nations had put sanctions on Iraq in an effort to see the Saddam administration trade the country’s oil for exchange and obtain food and medicine for the people of Iraq.AWB is reported to have involved itself with Iraq under circumstances that had not been approved by the united nations and at the same time paid heavily on it’s part in order to cover up for its wrong deals behind the united nations.

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When the Iraq government changed the responsibility of paying for the cost of transporting the wheat into Iraq to AWB, the company not only took responsibility but also agreed to pay large sums of money into Jordanian accounts in order to use the services of another company called Alia as recommended by the Iraq Grains Board IGB. This was done without the approval of the united nations and the large sums paid by AWB were later falsely claimed from the united nations hence the company lost none of its own funds in the trade. Even with the coming of new management in AWB, the deal with the IGB was never made known to the united nations but instead, the company reduced the farmers’ own pay in order to keep up making its payment into the Jordanian accounts. The Saddam administration is said to have made a fortune from its deal with AWB and invested heavily in weapons contrary to feeding Iraqis. A report from the commission of inquiry in the offense established that the deal with AWB was the highest contributor to Saddam’s administration.

The unethical practices cited in AWB involvement with IGB

With reference to AWB company’s ethical practices that may surround the nature of its production, the types of products with regard to quality, the policy of employment under which the employee’s treatment lies, and the policy employed in the marketing of its products, a lot can be cited as unethical especially with reference to its involvement with the enrichment of the crude Saddam administration. AWB is empowered by the Australian government to market its leading farm produce; wheat.

The company management has the responsibility to ensure that ethical aspects are integrated into all of its aspects. All these aspects are covered in the business plan and it’s thus the role of the management to determine whether they meet the ethical regulation or not (Hartman, 2004). If a company ends up violating the standard regulations with regard to the nature of its products, it’s considered as a failure of its planning.

The involvement of AWB’s management with the Saddam administration at the time when a lot of scrutinies was ongoing on Iraq’s involvement in crude weaponry and terrorist activities was unethical especially with regards that the trade was geared not at expanding the Australian wheat market but to get enormous amounts of cash behind the united nations knowledge. The Saddam administration on the other hand was enriching itself from the large sums paid in exchange. The use of false measures to meet the expected goal is such a failure on the part of management (Jackson, 2004).

The involvement of AWB in the food for fuel exchange was not only unethical with regard that the world had put sanctions on deals with Iraq but in the essence that AWB took advantage of the readily available market in Iraq a position that very competitive among other major wheat producers the US included. AWB is reported to have failed further as far as the code of ethics is concerned in its fraud. With the sanctions on the supply of food to Iraq, the company management had to strategize and pay large sums of money to see its product gets its way into the Iraq market a factor that saw farmers in Australia suffer from low incentives. It’s contrary to the code of ethics for any company’s management to involve itself or the company’s name in deals with the political framework for the purpose of getting a larger command on the market.AWB’s trade with the Iraq administration at the time of sanctions was facilitated by top political allies who were reported to have been monitoring and influencing the sale of AWB’s wheat in Iraq.

Other than not sticking to the rule of fair competition, AWB is reported to have ignored warnings from the UN on its trade with Iraq. The unethical practices of the company were very questionable with failure attributed to its management that at some point tried to deny the allegations that it did not know of the deals. This is one company in which very many Australian farmers and natives have invested and the fraudulent involvement with Iraq was feared to risk the confidence of many Australians and ruining the country’s position in international trade.

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Expected ethical practices that the planning and organization of a company can be enhanced. The management of any company can strategize in its plan such that any setback that may hinder the realization of the expected goal is established and ideal mechanisms put in place. For example with regard to capital, the plan is to give an estimate of the expected amount of money for the proper and smooth running of affairs in the firm and any deficits that may feature can be ideally dealt with through correct ways of obtaining business funding such as borrowing from financial institutions.

With regard to obtaining funds to run the company, the company’s planning mechanism should also have a laid-out strategy on how the money will be paid back. The failure of a company to pay back its loans or meet its financial obligations is a failure of the management with regard to its planning and organization and it’s unethical. The financial position of a company if well planned for determines its ability to meet the cost of production with regard to the purchase of raw materials and the manpower to meet the production. Any financial crisis may imply that the company is incapable of meeting its production costs especially with reference to the purchase of manpower where it’s considered unethical to terminate employment or underpay employees’ wages as a result of a deficit in the company’s finances (Gomez, 2008)

The planning of the company covers its intention to expand the scope of production and perhaps broaden the marketability. The marketing strategies are covered in the business plan. It’s unethical for accompany to use false measures to attain any of their goals. For example in the event that a company wishes to widen its market and scope of production and perhaps extend into another country, the management with regard to planning and organization should restrict itself to the expected code of ethics such that there is no discrimination with regard to race or quality of life in the quality of its production in the other country. No human race is superior to another and quality should be given to all. With reference to consumer satisfaction and the competitive business market, the management in an effort to meet its objective should not exploit the consumer with high pricing of its products. A good business plan should ensure that the goals and objectives of the company are not met through crude consumer exploitation but be geared towards consumer satisfaction (Baylor University).

Research indicates that a ruined business reputation takes forever to rebuild and business managers are warned from indulging themselves with cases of dishonesty. Studies indicate that the malpractices at AWB have sent many farmers and natives questioning the management of a situation that risks its pride and reputation. A good company reputation lasts long and helps in the smooth running of a company’s affairs as far as meeting the market expectations is concerned. It’s the role of the management to adhere to a strict framework of ethical regulations to ensure that none of its aspects violates ethics. Good ethical practices should be manifested in all its dealings and integrated among all the employees whose outside reputation may be associated with the company. The management of a company has authority over its employees who should commit themselves to meet the company’s interests in the most ethical manner and its thus justified for the management to punish employees who happen to work contrary to the code of ethics.

Adhering to ethics is not only demanding on the management but very rewarding to the company and the environment around it. Various management strategies have been implicated in wrong deals. Good company planning and organization should cater for the respect of basic human rights, and ensure that all individuals are bound to be handled with the dignity and integrity they deserve, management that plans towards the attainment of its goals through the use of any of these; wage exploitation, forced labor and use of cheap labor through laboring children is termed unethical. The market is competitive and the plan of any company should not target the discrimination of other stakeholders including rival companies as the case implicated in AWB’s effort to close out other wheat marketers like the US that was in wrangles with Iraq at the time of Saddam‘s rule. Fair competition is ethical and it implies that the company operates under the stipulated laws

It is ethical for the company management to advocate for transparency and accountability, a good form of organization is one that is responsible for both its successes and failures the management at AWB on subjection to inquiry tried denying the fact that they knew of the company’s deal with Iraq. It’s unethical for the management not to disclose its financial policies as required by the law or try to cover up its financial weaknesses through fraud. The management of a good company is not justified to involve itself in political matters and emphasis should be laid on the fact that it’s unethical for the management of a company to allow its facilities to be used in political setups. AWB’s management failed by having top political officials oversee the proper marketing of its products in Iraq and facilitating false exportation deals.

So much value is attached to a business plan whose contents cover among others, a description of the venture with emphasis to the position of the company either at the start or along with the progress of the company. Planning covers what the company intends to do with the business citing reasons like selling it off, expanding, or merging into some other related line of business. A failure to meet the employee’s needs is blamed on the company’s management since a good company plan should cover its staffing and identify the type of enterprise needed. A plan outlines how the financial obligations will be met and gives direction on where to seek help in case of a deficit. A plan covers the organization and the entire coordination of the company hence holding more command in the well-being of a company. It’s advisable for a company to conduct research on the various factors that can lead to unethical practices and layout strategies in its plan to deal with them in order that ethics may be upheld (Kotter et al, 2008).

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A relationship exists between the expected company’s code of ethics and the manner in which it conducts its practices. For some companies it’s a tradition or rather a culture to operate within or outside the code of ethics and the management can determine that in its plan. For the best achievement of the management in an effort to uphold ethical practices research indicates that the best can be achieved only when the management fully supports ethics. For the entire facility to uphold ethics, it’s been recommended that the expected ethical practices be outlined both in a written and oral and frequent evaluation done. The ethical practices outlined should be such that the employees can understand and uphold with ease. The management is obligated to strictly monitor the adherence to the laid-out ethics among its staff. This is best incorporated when there are laid out repercussions for noncompliance.

Good company practices are meant to ensure a good company reputation. Some companies have a strong reputation for good practice while some are known to indulge in various malpractices in order to effectively compete or maintain a particular production regime. Ethical practices not only protect the company’s image and hence help in the reframing of the market available for its products but also help in establishing consumer confidence. The position and role of the company’s management are to ensure and oversee the perfect survival of the company’s public image in the competitive business world.

Conclusion

The management bears responsibility for the well-being of the company which should not be ego-centered and selfish in the sense that the means do not justify the outcome. Safe practice should thus be advocated by the law and any malpractice heavily punished. Consumers have on some occasions been exploited through substandard goods that they have heavily paid for with cases of product overpricing cited in some cases. There companies whose management ignore the employee’s needs especially in the event that there lacks a proper employees’ union to address issues affecting the employees, cases of underpayment, forced and crude labor have been cited with some companies opting for cheap labor that is readily offered by children and illegal immigrants. At the moment the US government restricts any company to employ illegal immigrants as this does not only amount to exploitation but also increases cases of illegal immigration. The case implicated in AWB is unethical and the management is liable for lawful punishment.

References

Baylor University’s Hankamer School of Business, Annual Business Ethics Forum.

Gomez, M., Luis, R., David, B. and Robert C. (2008). Management: People, Performance, Change, 3rd edition. New York.

Hartman, Laura (2004). Perspectives in Business Ethics Burr Ridge IL, McGraw-Hill. Jackson, Kevin (2004). Building Reputational Capital. New York, NY, Oxford University Press.

Kotter, John P. and Dan S. Cohen. (2008). The Heart of Change. Boston: Harvard Business School Publishing Company.

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