International Management Ethics and Values

Question: Discuss the different emerging ethical issues of organization. Answer: In the competitive business environment, several companies engaged in different business operations. Different business has different requirements and may be survived with various operational problems. This assignment is all about discussing different emerging ethical issues of organization. With all the explanation, I will bring my thoughts or understanding regarding that topic or chosen journals. Here all the selected ethical issues have been raised different ethical backgrounds which need specific ethical consideration. Ethical issues includes unethical business practices by Coles, illegal corporate hospitality program of BHP Billiton, an accounting scam related issues and ethical consequences related to employee retention policies of Wesfarmers. Tom maintain all this issues the company should maintain core values of each business such as business code of conduct, transparency, communication, accounting disclosures and others. Private label groceries of Coles increase concern for smaller producers of Australia and raised ethical issues: The current trade of private labeling groceries produced by many Australian companies is a cause of concern for smaller producers and domestic food networks in Australia (Schlegelmilch 2016). Coles is one of the dominating retail grocery chain brands in the nation. Despite the company has successfully managed the profitability, the company engaged in the production of private label goods which are usually cheaper than the available branded product in the market. This strategy has made the company more profitable. The companies like Coles have recently practiced this strategy for increasing recognition for example, own brand label milk recently represents seventy one percent of the market. However, the company did not even realize that it hurts ethically smaller producers because brand companies even captured the smaller market. According to Keith (2012), this is an unethical practice where the private level products increases the market power of the chain, despite that of the produce rs who makes those generic items, and in this process Coles is not disclosing their brand name in the market. Coles did not disclosed the development of regional and producer identity even from employees like us in the year of 2011 when this factor generated significant media attention for the case of milk wars. In the year of 2010, the Senate Economics References Committee produced 92-page report titled Milking is for all its worth- competition and pricing in the Australian dairy industry. The main purpose of that report was to outline concerns over competition and pricing in the market of Australia. These tensions intensified when our company cut the price of milk, the private level product, to $1 per litre for all of a sudden. The number of Sixty million dollar refers to an insider estimate of the cost of this price reduction; however, Coles confirmed and denied that the product is loss-leading which is completely wrong facts shared to the market and even to us. The company was a nswerable to The Australian Dairy Farmers Association due to sudden price-cut. They have complained that Coles did not even discuss with the milk suppliers or even the subsidiaries of the company. Thus the company faced many unethical consequences due to this move. Till the recent times, there are hundred and sixty submissions have been made regarding the enquiry from the farmers of dairy and regional co-operatives, manufacturer of foods and related industry. Subordinate prices cited a major factor for the shift of the private product preferences over branded product in the market. According to Keith (2012), this tendering process has been overtly linked with crippling the dairy industry of Australia which favoring the interest of customers and shareholders at the expense of farmers and dairy industry. Therefore, the private grocery production can be a treated as unethical because it provides a stiff competition to the small grocery retailers across Australia. According to me, the p rivate grocery selling of Coles has been a monopolistic business process in terms of the milk supply. By this approach the company may remove the existence of the small retailers from the dairy industry in the nation. Furthermore, these may definitely impacts largely on the dairy processors and farmers because they definitely lose the per unit revenue of milk products due to this private selling option followed by the bigger retailer brands like Coles and Woolworths and many more (Bilinelli 2016). According to me, an ethical issues raised by the private selling, can be removed if the company reduce the aggressive pricing strategy and market control. This move can establish better relationship with the companys suppliers like Jersey Fresh from Barossa Valley in south side of Australia. By this, the company can increase their profitability under the ethical consideration and accountability. This has also been understood by that here the company needs to think about corporate social re sponsibility to do the business successfully. BHP Billiton fine a warning on corporate hospitality: issues regarding corruption allegation BHP Billiton was responsible for official sponsorship of 2008 Beijing Olympic. The US Securities and Exchange Commission slapped Australian mining company with a $25 million fine for companys unethical hospitality program (Adhariani, Sciulli and Clift 2014). Anti-corruption watchdog Transparency International said that some of the officials mainly from the countries like Asia and Australia who were treated to tickets, luxury hotels and other facilities were close to the shady regimes and made negotiation with the BHP Billiton. However, despite this unethical hospitality program, the company failed to provide sufficient internal control over a global hospitality program that the company hosted in connection with its sponsorship of the Olympic Games. These issues later intensified when this has been found that 176 government officials and employees of state-owned corporations attended the Olympics at the companys expense (Dodds 2015). The SEC suggested that the company failed to provi de employees with particular training on how to evaluate the risk of corruption of an invitation or to provide specified guideline to accomplish a hospitality application form for foreign officials invited to the Olympics. This has been notified by the director of the Transparency International that the company has followed an unethical, unsystematic process for preparation, review and approval of the requests and thus the company was caused for violation of the provisions of the internal controls of the U.S. Foreign Corrupt Practices Act. However, the official authority of the company neither admitted nor declined those unethical audit practices because the company has made an independent compliance group. In this context the shares of the company are traded on the NSX had not found anything relating to the practice of corrupt or bribery intent (Richards 2013). The company further clarified that the company had already taken the remedial action and developed a global compliance pro gram (Ingerman et al. 2015). According to me, as it is being recognized by the government official that inviting government officials to the Olympic at the companys expense to make the stakeholders relationship more stronger cam definitely considered a substandard oversight requirements. In that context, the SEC clarified that BHP Billiton repeatedly extended those invitations to the foreign government officials for establishing the pending contract negotiations or dealings with regulation such as the efforts of the company to obtain access right. As per the final decision made by the US Securities and Exchange Commission, BHP Billiton was accused for violating anti-bribery and corruption laws. By this case study, I firmly believe that the company should not participate in such kind of hospitality program which was completely designed by the internal management of the company. As per my interpretation, being the official sponsor of Beijing Olympic 2008, it was completely unethical t o give extra privilege for the certain foreign government official, which was against the Olympics terms and conditions. Satyam scam: biggest international accounting fraud and unethical business practices Satyam scam was all about the fraudulent auditing practices and corporate governance allegedly in participation with chartered accountants and auditors (DeZoort and Harrison 2016). The company has misrepresented its accounts both to its stock exchanges, board, regulators, investors and all other stakeholders. This Indian company was established in1987 and gradually the company was placed as the 4th fastest growing IT Company in India. As per the background suggests the company was acquired 9 percent market share at the time the scam happened. Apart from the Indian stock exchange the company is the first Indian company to be listed in three international exchanges: Dow, NYSE, and EURONEXT. The chairman of the company, Ramalinga Raju, being the founder of this software development company was found guilty as disclosed Rs 7000 crore accounting fraud in the balance sheets (Bhasin 2016). By the tampering the accounts of the company, the balance sheet was falsely boosted revenue by $1.5 bi llion in the market. This was the biggest accounting fraud in the international circuit. Furthermore, the company falsified their revenues, margin and cash balances which was near about 50 billion rupees (Alexander 2016). Since 1999, the company involved in the unethical practices when land purchased by Raju by the fund which were earned from Satyam. Moreover, the company financed their purchases through pledging and selling all of his shares included shares of their family members. It was completely unethical issue as per the laws of land which did not permit the natives to acquire more than 54 acres of land. Additionally the company began purchasing land through his privately held companies. When it was proven unethical, the company has managed to set up 325 companies owned by his immediate denizen. Due to having no rental income, the company was majorly bought lands which are agriculture-driven. This company involved in such unethical practices intentionally however, in 2008, Raj u was forced to commit this fraud in front of their board members due recessionary pressure happened in the year of 2008. All options were being closed by his side and this mammoth accounting fraud was confessed such financial irregularities. During the year, Satyam announces a board meeting to consider buy back to keep investors trust in order to buy stake in Maytas infrastructure. However, all the unpaid files has gone against the company and promoters were claimed INR 55 Billion. All these accounting issues made promoters guilty although it is almost impossible to misrepresent such accounting and financial irregularities which the connivance of the auditors and several executive board members (Pandey, Rishi and Aadil 2016). This case even suggests that independent directors were kept in the dark by not disclosing the actual book of accounts. According to me, this was completely unethical corporate governance of the company, practiced by the members of the organizations and the ex ternal bodies like chartered accountant and auditors. The company, Price Water Cooper was involved as the external third party auditors of Satyam. This audit company was found guilty due to gross negligence and possible involvement in that fraud. Additionally the license of the auditing of two auditors was cancelled by the Institute of Chartered Accountants (ICAI) and imposed a maximum fine of RS 500000 on each auditor. Furthermore, PwC was penalized for this large audit fraud. As per my point of view the stakeholders have immense trust and faith in the statutory auditors and hence given that amount of respect. However, the confidence of such users was shaken up due to financial irregularities hindered by the auditing process of the company. In case of reporting financial information, the statutory auditors shall maintain the fundamental responsibilities such as sharing all informational details and represent them in true and fair manner. However, both the executives of Satyam Techn ologies and auditors made involves in delivering unethical practices. The company was found guilty in all wrong treatments as far as the managing financial dealings. On the other hand, PwC, as being the statutory auditor, disclosed during the processing of audits over the period of time. This has been further observed by me that nearly 7500 fictitious invoices were discovered as unchecked (Pandey, Rishi and Aadil 2016). Nearly 45000 employees were working at the time of came to light this scam in January 2009. Those were not being even conscious about that large business conspiracy and decisive by the management of the company. By this case study, I understood that the company was involved in all wrong doings because thousands of acre lands were acquired by the company just because of booming the realty market of the company. However, the company would not afford to lose the shareholders confidence and thus all such financial irregularities had been camouflaged by keeping healthy pr ofits in front of them. If the company had maintained records and relevant financial information as per the rules prescribed by the different accounting standards following ethical consideration, then the company would not face this financial debacle. Employee retention raised ethical issues in Wesfarmers Employee retention is all about the ability of an organization to retain its employee (Erickson 2016). However the Wesfarmers, one of the powerful diversified companies in Australia, failed to maintained this retention policy which have raised many ethical issues related to the employees engagement of the company (Lindebaum, Geddes and Gabriel 2016). As per my point of view, if the company has a higher employee retention rate, then such organization bound to bear total cost: of losing an employee such as: Costs involved in hiring a new employee On boarding costs of a new employee Lost productivity Lost engagement Error in customer service Impacts of culture Costs of training There are several complains have been recorded against Wesfarmers because the company does not disclosed several inherent clauses at the time of employment. As per my belief, companies that work to build and maintain ethical workplace culture should accomplish the desire of the motivated and productive employees. Here many of the employees faced problem due to handle ranges of services by a single efforts. Furthermore, the company retention policy not included the training process seriously and even does not updated the training procedures over the times (Ahammad et al. 2016). Due to this, employees of the company do not expose their optimum potentiality during serving for that company. These raised several ethical issues and make the morale of employees down. Last year 41 percent of employees of Wesfarmers noticed that they observed unethical and non-transparent employee practices which made due to getting more tax benefits. There many people felt that the company does not much thin k about maintaining ethical workplace cultures which are definitely one of the prime considerations for diversified companies like Wesfarmers (Erickson 2016). In this company, many cultures are working together, which are coming from different backgrounds and have different thought process, believe, understanding and work priorities. There are many issues raised because the company has not been considered such cultural factors too seriously during the recruitment process and even in the companys employee retention policies. For all these gap of practices, the company has recorded many ethical complaints in order to maintain the employee retention process. In this context, the company needs to take a serious ethical consideration to resolve such issues. To consider cultural backgrounds and maintaining transparency by disclosing all clauses related to the employee retention policies at the time of the recruitment process shall be maintained. Furthermore any sudden changes made by the company related to this matter shall be notified by each employee. By following this process, the company will surely ensure more employee satisfaction. References: Adhariani, D., Sciulli, N. and Clift, R., 2014. An Analysis on Corporate Governance Practices Using the Feminist Ethics of Care Framework: A Study of BHP Billiton. 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