Ethics is a wide field of inquiry that addresses the way people should live their lives, in regard to their internal and external environment. Ethics in business, therefore, is like a set of guidelines on how society expects the business to operate. Since society allows the said businesses to be in existence, it expects them to be socially responsible. Corporations should, therefore, relate to their employees in accordance with the desired moral standards and codes of conduct (Trevino, 143). This is because there lies no trade-offs between ethical corporate behavior and the profits realized. In fact, the most economically efficient corporations are the ones that observe ethical responsibilities in detail. It is, therefore, sad that the business world perceives ethical responsibilities as an expense to profitability. Ethical standards need to be created and communicated equitably to every employee within an organization.
Levi Strauss Company, for instance, is morally obligated to provide adequate wages, benefits, and working conditions to their employees in whatever country they operate in. “Adequate”, in this case, means more than the minimum that might attract workers who might be desperate for employment: at least enough for a worker to live comfortably, provide for basic needs such as food, clothing, shelter, and health care. They should also be able to save for the future and perhaps raise a family. While the theory of ethical relativism views morality as being relative to the cultural norm and moral practices in a specific society, the moral principles underlying the acts do not. Levi Strauss’ decision to hire overseas contractors, for instance, could be viewed as an opportunity for the contractors. In the American culture, however, it would be considered morally wrong because the idea was to spend less on wages, health insurance, and workers’ compensation.
The decision to close the plant in San Antonio causing the largest corporate lay-off in history was purely unethical. For a company that records annual revenue of more than $6.5 billion, sending home 1,115 workers in search of cheap uninsured labor in the middle east is an act of greed. The top executives’ decisions on wages, benefits, and working conditions did not consider the well-being of employees and society. The vice president of community affairs and corporate communications in the corporation, Bob Dunn, defended the move as a convenient means of cutting costs. He described the company as the best socially responsible in the textile industry and among the most active in the American industry. That view is ironic in regard to the decision to remove a plant benefiting thousands of motherland employees in pursuit of further profits based on cheap labor. However, Levi Strauss’ CEO until 1999, Robert Haas, presented the company in a good light by establishing a management system that was values-centered. He advocated for the rights of employees as well as a sense of corporate responsibility.
The libertarian theory advocates for voluntary cooperation and the free will of individuals regardless of their cultural background. It considers it immoral to deprive people of their natural rights. As people lose control over their livelihood to the government or a monopoly employer, their dignity is undermined. This is because their self-reliance is reduced, making them more vulnerable to the entities. That is the kind of pressure that forced the women in Shenzhen, China, to work for twelve hours a day with no health care, less than twelve cents per hour, and just two days off in a month. Regardless of the fact that the Chinese legislation requires workers to be compensated for injury and other work-related complications, the company overlooked this law having been motivated by higher profits. The company also violated the voluntary cooperation advocated by the libertarian theory. It was the first multinational to come up with a set of guidelines monitoring the operation of overseas workers. Levi Strauss would adopt the policy of the free will of individuals regardless of their cultural background and liaise with the labor unions in the various overseas societies on the best ways to satisfy its employees.
The top management made decisions and policies that were dictated by bottom-line profitability. They had no regard for the well-being of the employees or the external environment. The company’s shareholders would have controlled the crazy pursuit of profit-making by demanding less. After having made so much money over the years, it would have been ethical to give back to society. They could have done this by providing better working conditions to the employees and getting involved in some form of corporate social responsibility to benefit the community at large. The company was instead keener on having its guidelines followed rather than on creating a suitable working environment. That is why the company’s team of inspectors was always monitoring the activities of its contractors, ready to get them fired upon the violation of the company’s guidelines (Shaw, 200). In as much as some of the acts done by the contractors and employees may be considered morally wrong from an American perspective, a company doing business overseas should always try to embrace the local culture.
Considering the utilitarian moral theory, the actions by Levi Strauss were morally wrong because they produced pain and discomfort to employees. The utility is considered to be the providence of pleasure and less pain. The theory measures the morality level of an act by adding up all the pleasure-producing aspects and comparing them to the pain caused. If the act causes more pleasure than pain, then it is considered good. The term “pleasure”, in this sense, refers to the social and intellectual benefit, because they are of more intrinsic value in comparison to sensual pleasures. In this regard, the Levi Strauss Company put more value in the pleasure of its shareholders at the expense of the pain caused to its workers. An international company like Levi Strauss should act in a way that creates pleasure for the employees and the community because they are the ones who create the benefits for the shareholders.
According to Adam Smith’s Free Market Economics model, the efficiency of a free market system is dependent on a company’s policy to satisfy a public need ethically. The need is satisfied through the provision of a public good in an honest and objective manner. When self-interests are pursued and the others excluded, the market system fails to allocate resources satisfactorily (Evans, 234). While moral practices and ethical behaviors cannot be put into legislation, every corporation ought to overlook its self-interests and put those of the society ahead. The world would then be a better place to live in and do business.
Evans, William A. Management ethics: an intercultural perspective. Michigan: M. Nijhoff Publications, 1981. 234. Print.
Shaw, William H. Business Ethics: A Textbook with Cases. Boston: Thomson Wadsworth. 2011. 200. Print.
Trevino, Linda K. Managing Business Ethics 3rd Edition with Business Ethics. Sydney: John Wiley & Sons Australia. 2005. 143. Print.