Do you feel that it is possible to develop a universal set of ethical standards for business

Do you feel that it is possible to develop a universal set of ethical standards for business, or do you believe that cultural differences make universal standards impractical and/or impossible?

Ethical values and standards are the basic tenets that guide businesses in offering quality services and profitability. Establishing ethical standards is subject to the cultural settings of the business. Each cultural setting offers a different set of values and norms, defining the interactions among the members. Therefore, ethical standards meant for a specific cultural setting differs from another. When a business entity comes up with ethical standards for business, applying the same principles in another cultural setting may offer certain difficulties. Each country has definite cultural practices that determine business practices that may conflict with practices from other countries. Ethics define what is morally acceptable or not (Lawrence & Weber, 2014). The same ethical principles define how people relate within a given cultural setting. Research studies indicate that ethical absolutism is an impossibility, especially in a world with varied cultural differences, economic growth stages and religious beliefs (Donaldson, 1996). The differences in norms make standardization of ethics an uphill task. The above reasons point to the impossibilities of developing a universal set of ethical standards for business.

Some moral etiquettes are shared among different cultural communities. As much as each cultural setting has its moral standards on what is good or not, most communities hold onto the same ethical standards. Honesty, respect for each other, and the ability to keep promises are some of the norms that are shared amongst different communities (Lawrence & Weber, 2014). Besides, many communities abhor certain vices like stealing, harming others, and disrespect. With such common values shared amongst communities, someone could argue of possible common ethical values for businesses. However, this idea remains theoretically correct, rather than practical for various reasons. Practically, having the same ethical values differs from having the same standards. For instance, the standard that defines respect for each other in one country may differ from another. It becomes difficult to have a common ethical standard across different cultures, even on shared values. Agreeing upon certain norms may never translate to having universal ethical standards for business across many cultures.

Do corporations have a right and/or a responsibility to influence ethics in the countries in which they operate? Defend your position.

Corporations conduct businesses on a large scale, especially across different countries. Establishing a successful business across many countries requires definite ethics that define business operations. Values and codes of ethics help corporations to maintain high standards irrespective of the country of operations. Without the influence, the quality of the products and services may be compromised in other countries of operation where the standards may be low. The local ethics may never be good for the business of the corporation that seeks to maintain the global standards of doing business. In many countries, the local codes of ethics may be lower than or contradict the corporations’ ethics (PAIB Committee, 2007). The corporation is responsible for the influence of ethics to maintain its reputation in the global market. However, the influence should be made in a way that does not outrightly conflict with local government ethics, especially during implementation.

Ethical standards in the current world of business are universally accepted in many countries. Therefore, business ethics and values developed by corporations are universally recognized in many countries. For instance, respect for human rights is a common aspect accepted and recognized by many countries. A corporation is responsible for the protection of human rights in the countries of operation, whether the host country acknowledges the same or not. According to Halbert & Ingulli (2006), lack of implementation of an aspect as important as respect for human rights may lead to damage to the corporation’s image and reputation on the global market. Therefore, ethical influence in the countries of operation is important for the survival of the corporations and self-image. The influence could be gradual to make the country see sense in adopting certain ethics as part of business practice.

Challenges arise in a bid to influence business ethics in countries of operation. As a corporate seeks to maintain its standard of doing business, it may encounter hurdles that limit its ability to enforce standards for growth. Different countries of operation are in different stages of economic growth. Economic differences may form the basis of varied ethical standards for business operations. For instance, business ethics and codes of operations made for a developed economy may not work for a developing one. The standard may be too high for the local businesses to adopt and maintain, thus pushing them away from doing business with the corporation. Driscoll & Hoffman (2000) advice that a corporation should not impose certain ethics that render local businesses redundant; however, it should continue working using acceptable terms while influencing the locals with the right ethics. The gradual implementation of ethics helps challenge local businesses to some of the best practices in the market. Corporate support is an important tool that ensures that a corporate influences the locals through educational support, fighting for human rights, and protection against child labor.

Part B:

Corporate Social Responsibility and Related Ethical Issues

Associated with KGHM International’s Proposed Ajax Mine Project

In Kamloops, BC

Part B

Section 1: Introduction

In this case, the City of Kamloops, BC. was an agricultural town that had community ownership of the land. The beauty of the landscape attracted thousands of tourists in the city each year, earning revenue. However, there were deposits of copper and gold the required mining. The proposal was presented to establish an open-pit mining site with an annual production of 109 million pounds of copper and another 100,000 ounces of gold every year for the entire production period (KGHM Ajax Mining Inc., 2012). During construction, the project was to employ 580 people, while 380 were to be employed for the operations and production processes. According to the timeline, the project was to last for 23 years, after which the mining sites were to be closed. The lucrative project promised decent income for the investors, part of which was to help improve the infrastructure of the city and its environs. To produce one pound of copper from raw materials, the company will spend US $4.00. From the projections, it comes that the company expected to make handsome profits from the activities (KGHM Ajax Mining Inc., 2012). It was obvious that the project was viable in terms of financial returns for the investors and the City of Kamloops.

Several issues were raised concerning the project, despite the economic changes it promised to bring. Various stakeholders raised issues with the social corporate ethical aspect of the project. The ethical concerns raised doubts on the viability and long-term effects of the project on the environment and economy of the city. Concerns were raised on the project’s impact on the local people, the workers, and the general environment of the city. The risk from the open-pit mines and the destruction of the ecosystem were some of the concerns that the company needed to address.

Primary (Market) Stakeholders

Shareholders of KGHM International: KGHM International is the parent company that should be launching the project. The shareholders of the company have high hopes of getting a return of their money from the project. The major shareholder is KGHM Polska Miedz S. A., with 80% of the total shares (Quadra FNX Mining Ltd., 2011). This means that it almost owns the operations of the company in various parts of the world.

The employees of KGHM International: Employees during the construction and operations are a major stakeholder because they will directly be affected by the mining activities. Their help and earnings will affect their family members and the economy of the city.

The suppliers of the project: suppliers will determine the availability of the materials for construction operations. Inadequate supplies will lead to the underperformance of the project.

Residents of Kamloops: the area residents will be affected positively or negatively by the project. They will be affected positively by the money generated from the mining project to build roads and other public utilities. On the other side, residents will be exposed to problems like pollution and environmental degradation.

Section 2: Rationale

The issues presented by the stakeholders point out the need for the Ajax mining company to look into its corporate responsibility before going ahead with the project. The issues of concern can be analyzed by the three ethical reasoning methods, which are the utility, rights, and justice methods. On the ethical utility reasoning aspect, the stakeholders should consider the people and the environment instead of concentrating on the cost and the return from the project (Bhattacharya, Sen, & Korschun, 2011). According to the analysis performed, the dangers of the project may outweigh the gains over the project’s lifespan. According to the Kamloops Area Preservation Association (KAPA), mining activities will lead to the degradation of the environment and long-term health complications for the workers in the mines. The money from the project may not help to improve the infrastructure because of the high maintenance cost for utilities like roads. The tourist attraction sites will be likely destroyed, leading to the loss of income from the tourism industry within the city and its environs.

On the rights of the people, the local people within the construction site claim that the project displaces them from their rightful ownership of their land. They have the right to enjoy the clean water that will likely be polluted by the mining activities. The fishermen are concerned about the environmental degradation from water pollution that will deprive them of their livelihood from fishing (Wei, 2011). Therefore, the project will deny the local people their rights to their balanced environment.

According to the Justice Method, the city residents believe that much of the revenue from mining activities will be sent to the multinational headquarters situated in Poland. Therefore, the gain from the money for the locals will be limited than what is mentioned by the proponents.

Section 3: Impacts (What does this mean to my family?)

For my family, we will likely be relocated to pave the way for the mining activities. Relocation means looking for a new place for settlement. Our children will have to change schools because the nearest school is also marked for demolition due to its proximity to the project site. On the same note, the general changes in the environment will lead to a lack of clean water for the family use, arising from the chemical contamination of the ground and surface water (Duska, 2007). The value of family properties around the mining sites will eventually go down, leading to financial losses. No buyers will want to buy properties near the project sites, and the family will likely dispose them off at very low prices. To my family, the beautiful scenarios we visit every weekend will be destroyed by the open-pit mines, leading to a lower quality of family life.

Section 4: Impacts (What does this mean to my community?)

My community is likely to receive positive and negative impacts of the project. However, the long-term negative effects will outweigh the positive ones. According to Bansal & Roth (2000), an increased taxation is good for the country because it leads to an increase of revenue that can be used to improve public infrastructure and related services. As it stands, Kamloops city is not an industrial zone but a place that prides itself on the environmental beauty and agricultural activities. The open-pit mining places will destroy the beauty of the community land, making out people leas their source of livelihood. Destruction of our heritage sites will lead to lose of jobs and income for families who act as tour guides for the visitors.

Section 5: Impacts (What does this mean to my country?)

Attracting direct foreign investment is good for my country, Canada. It means more money flows into the country to build the economy in various ways. New employment opportunities for the people and better business for the local suppliers. The problem arises from the social responsibility concerns by the local stakeholders. Environmental concerns are at the center of all corporate activities. My country risks having negative scores on environmental issues if the mining activities have adverse effects on the city’s landscape. Without proper environmental impact assessment by the relevant authorities, the decision to allow mining activities may not be rational. Therefore, the decision whether to allow the company or not will still impact on my country and its reputation on the outside world.

The decision to allow the company to start operations in the city will have certain benefits for my country. During the construction, workers will have opportunity to earn a living from the work. Many suppliers will also have an opportunity to do business during the construction. After the construction process, the operational stage will see employment of thousands of citizens. My country works towards reducing the rate of unemployment. Therefore, mining activities in Kamloops City presents employment opportunities for my country. Employment of more people in city means that more citizens have money to spend on their families and leisure. My country is likely to get a boost of other business activities because more people will have higher purchasing power. Disallowing the operations of the company will lead to the negative image of my country in the world. The mining company is an internationally reputable company that operates in many parts of the world. Cancellation of their in Kamloops City is likely to lead to most of the international corporates withdrawing their activities from my country. My country could lose more than it could have gained from the cancellation. The mining company could opt for other neighboring countries like the U.S. More multinational corporates are likely to establish business activities in my country if laws are favorable for them.

The increased awareness of the environmental issues in the world could expose my country wrongly if mining activities lead to the degradation. The concerns by the various stakeholders have already points to the long-term negative effects on people’s health and the environment. Establishing the mining activities in Kamloops disregarding the environmental issues is likely to lead to more problems for the country. For instance, families will spend more money on healthcare, rather than on economically viable activities.

 

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