Ethics in the Workplace and Social Responsibility in Organizations

Question 1

I feel that it is possible to develop a universal code of ethical standards for businesses in spite of the cultural differences that exist in the different regions around the world. This is because the ultimate aim for multinational corporations should be conducting business in a sustainable manner, something that would necessitate paying attention to the long-term social needs of the people impacted by the business, as well as the welfare of the environment (Donaldson, 1996). In spite of cultural differences that exist across different regions of the world, it is possible to govern one’s practices based on a universal set of standards. Evidence to the feasibility of universal set of ethical standards can be seen in the attempt by multinational corporations to engage in CSR practices designed to protect environmental sustainability, regardless of the corporation’s home country. As such, the code of conduct of The Coca-Cola Company of the United States is relatively similar to that of Saudi Basic Industries Corporation of Saudi Arabia (SABIC, 2019; The Coca-Cola Company, 2019).

Question 2

I believe that corporations have a right and responsibility to influence the ethics of the countries in which they operate. Corporations may find themselves operating in a region where the idea of ethics is non-existent. They might even be coerced to engage in corruption by being required to pay bribes in order to be allowed to operate. Rather than going with the flow and participating in corrupt actions, corporations have a duty to stand against corrupt. They should even report on the hurdles they experience in their attempt to enter or operate in a foreign nation. Other than reporting and refusing to engage in corruption, corporations have a right to influence the ethics in these countries. This could be done through corporate culture affecting employees recruited from the nation. Such an effort could also be realized by engaging in educative initiatives that foster ethics in entire the entirety of communities’ cultures.

Part B

Section 1: Introduction

The issue of importation of toys laced with lead came to the limelight in 2007. At this time, the U.S. Consumer Product Safety Commission (CPSC) brought to public attention the fact that Chinese-manufactured toys contained toxic amounts of lead and other poisonous metals. This led to a recall of 17 million contaminated toys. Following this revelation, the CPSC also assumed a more proactive role in the screening of products imported from overseas. It emerged that lead was contained in the paint used on toys. In following the CPSC’s lead, other regulatory agencies around the world enforced strict measures to regulate the products imported from China. Widespread recalls followed (Mattel recalled approximately 7 million toys) and there was seemingly increased scrutiny by Chinese manufacturers in order to improve the safety of toy products exported abroad.

In spite of the progress achieved in the late 2000s, there is a new range of evidence indicating the presence of lead in toys manufactured, sold in the country and exported abroad. In 2018, the CPSC recalled over 30,000 units of toys due to lead contamination. Unlike previous recalls, the lead contamination in the latter recall was found in rubber toys, rather than toy paint. This indicates that, despite stricter scrutiny by CPSC reducing lead-contaminated toy recalls by 97%, children are still being exposed to expensive metals. Shen et al.’s (2018) research offers comprehensive findings on the topic. Among other findings the authors observe that toys sold by unorganized sellers contained higher concentrations of the toxic metal; inexpensive toys were more likely to have high concentration of lead; and that the toys laced with lead were more likely to be targeted at infants and toddlers (Shen et al., 2018).

It is also worth noting that CPSC regulation does not apply to toys sold through unauthorized online sellers, the black market, and second-hand toy items still in circulation. Moreover, as with every other industry, regulation in the toy business does not stop businesses from finding ways of bypassing regulations and getting faulty products into the market. All this is facilitated by poor regulation in the East Asian country. According to Wayne Morrison (2009), the country’s health and safety authority for manufactured goods is fragmented and ineffective. The move by the country’s regime to prioritize profitability over the safety of consumer goods has led to the proliferation of fake goods and the existence of unlicensed producers. The country relies on weak and poorly implemented consumer protection laws and an almost inexistent system for inspecting consumer goods, both for the local market and for exportation. Extensive corruption in the government and lack of accountability further amplifies the problem, placing consumers of goods produced in the country at great risk,

Ideally, corporations like Mattel ought to have stopped importing toys from China in lieu of the discovery of lead in toys produced in the country. However, not only did these corporations continue importing toys from China but Mattel, the leading seller of toy products in the U.S., even apologized for damaging the reputation of the Chinese government following the 2007 recall. The company would publicly state that the recall was necessitated by design flaws from the company, rather than shortcomings in the quality and safety of the toys (Beamish & Bapuji, 2008).

Section 2: Rationale

The ethics of this issue can be assessed from multiple perspectives. Among these, the most relevant, in line with Lawrence and Weber’s (2014) recommendation are utilitarianism, justice, and rights. In this section, each of these three methods will be used to assess the issue in question – the feasibility of importing toys from China.  As it will be seen, each of the methods sufficiently argues against the idea of corporations importing toy products from Chinese manufacturers but some frameworks are more relevant to the issue than others.

Utilitarianism

The utilitarian framework is based on the logic that the justifiability of an action should be founded on net ethical benefits of choosing between two conflicting options (Lawrence & Weber, 2014). Utilitarianism is, therefore, beneficial in comparing the merits and demerits of an action, particularly if the outcome of this action will affect the general public (Lawrence & Weber, 2014). Utilitarianism is useful in the context of corporate behavior as it helps corporations to make decisions that benefit the general public instead of simply helping organizations to realize a profitable end. In an ideal situation, therefore, the utilitarian framework should help western toy companies to make a decision on importing toys from China.

The only advantage of sourcing toys from Chinese manufacturers is that the low cost of materials and labor in the country, which in turn reduces the cost of toys and other products imported from the country. The disadvantages, on the other hand, range wide. Firstly and most importantly, infants and toddlers, whose toys are observed to have the highest concentrations of lead, will be placed at risk of lead poisoning. Secondly, the continued purchase of products from a country with weak regulations encourages cartels to continue poisoning the world. This move also encourages corruption as unscrupulous dealers still manage to find a way into the western market. Thirdly, importing toys from China paves way for CPSC and other regulatory agencies to recall substandard products, which end up being deposited in the developing world where tough regulatory standards are almost inexistent and testing standards may not be good enough to identify lead in the toys. Thus, while corporations may argue that it is the mandate of regulatory agencies to test and assure that the products that enter their markets are free of lead and other poisonous metals, it is their duty to stop trading with unethical manufacturers.

With the welfare of the public in mind, this analysis proves that the net disadvantages of trading with Chinese manufacturers far outweigh the advantages. Corporations ought to show more willingness to rely on utilitarianism to guide their actions and decisions, especially if such decisions concern the welfare of the general public.

Justice

Based on Lawrence and Weber’s (2014) understanding, justice necessitates that burdens and benefits are equitably distributed based on an accepted norm guided by policy. Therefore, for justice to prevail, it is necessary to have laws and reporting mechanisms to make it easy for oppressed persons to seek fairness. Based on the justice framework, it is justifiable to claim that the actions of Chinese manufacturers, which manufacturer toys with toxic amounts of lead; the Chinese government which fails to regulate manufacturers; and western corporations, which import toys from the same manufacturers, constitute injustice. Some of the just sets of action following the CPSC revelation would be – the Chinese government showing commitment to shut down manufacturing plants that did not meet safety standards; manufacturers showing readiness to comply with these standards, conducting independent testing and publicly releasing test results of each toy product; and western corporations desisting from importing toys and other consumer goods until the desired level of regulation is attained in China.

Rights

The rights framework necessitates that corporations acknowledge and respect people’s entitlements (Lawrence & Weber, 2014). According to the World Health Organization, every person has the right to health. By selling toys with toxic levels of lead and other metals, corporations place the health of children at great risk, thus depriving them of the right to health. According to Moore, Shanghai and Hall (2011), children are not just poisonous to children when chewed but also when touched and inhaled. With some toys containing up to 1,200 times the permissible amount of lead and up to a third of the toys produced in the country having toxic metals, it goes without saying that purchasing toys from Chinese manufacturers deprives children of the right to health (Moore, Shanghai, & Hall, 2011). The ethical course of action for the Chinese government would be revoking the licenses of these manufacturers. Corporations should also protect the rights of their consumers by desisting conducting business with these manufacturers.

Based on this assessment, it is clear that the utilitarian framework is the most helpful in evaluating the ethics of the case in question. This is because the framework provides a breakdown of the costs and benefits of the issue in question and helps stakeholders to identify the most viable option.

Section 3:  Significance to my family

As with every other family, mine has at different points, purchased multiple toys for their children. Growing up, children tend to develop a longing for action figures, toy cars, and dolls and those born into my family have been no different. Parents have, in turn, bought toys from some of the most trust toy brands, Hot Wheels being among them. Hot Wheels is a subsidiary of Mattel, the American company that recalled 7 million toys in 2007 for having toxic levels of lead in paint and coloring pigment. Without prior knowledge of the potential dangers of buying toys from Mattel, my family placed its children at risk while trying to keep them happy. Without advanced knowledge and proper testing mechanisms, my family is not at a position to test the toys that it purchases. This leaves us with the dilemma on whether to purchase toys and keep our children happy or to deprive them of the joy of owning toys while keeping them safe. This situation is unacceptable. Parents should not have to make difficult choices because regulatory agencies are not doing enough and corporations are only motivated by profits. It would mean a lot to my family if corporations stopped collaborating with unethical manufacturers. As it stands, my family will always remain skeptical of any consumer labeled ‘made in China’.

Section 4: Significance to my Community 

The access of production and sale of lead-poisoned toys has wide-ranging implications on my community. It is important to note that, although a family may decide against purchasing toys made in China, they can hardly protect their children who attend community schools and play with toys owned by other children or by public institutions. All it takes is one toy with high lead concentration to release the toxic fumes which are in turn inhaled by a large group of children. The risk factor increases for toddlers and infants who likely direct the toys to the mouth, effectively introducing large doses of the toxic metal into their bodies.

It is worth noting that, even in the event of recalls like those ordered by CPSC over the years, all that happens is that new toys cease entering the market. The old, poisonous ones continue being used in homes and circulating in thrift stores (Purdy, 2015). It is only in rare cases that toy sellers ask consumers to return the toys for a refund. Even then, such calls are not done with the same aggressiveness with which the toys are marketed in the first place for obvious business reasons. It is thus highly likely that parents miss out on reports suggesting that particular toys have the poisonous metal. Also worth noting is that the recalls that happen occasionally apply to those toys that are purchased through registered offline and online sellers. Highly toxic toys still find a way into the community through the black market, leaving children at the risk of encountering at least one such toy somewhere.

These issues have serious and far-reaching implications on my community. The community would greatly benefit from efforts by the government to further restrict the entry of toys from China. One important approach would be restricting companies from collaborating with Chinese manufacturers until the Chinese government commits to standardizing the quality of the consumer goods manufactured in the country.

Section 5: Significance to my Country

The fact that faulty and poisonous consumer goods are finding their way into the Canadian market not only suggests that there is a gap in regulation but that the nation is falling short of upholding ethical standards for the sake of its people. Following the revelation that Chinese manufacturers are exporting toys with high concentrations of lead and other toxic metals, the country should have stood firm in rebuking these actions. It should have engaged in public efforts to have parents bringing their children toys forward for testing. It should have also called for Canadian companies to halt the importation of Chinese products until the Chinese government pursued measures to regulate the quality of export goods. The Canadian government should also have revoked the licenses of multinational corporations which continued to sell toys manufactured in China following the revelation.

Going forward, the Canadian policymakers ought to rethink the grounds upon which laws for protecting the welfare of the public are grounded. While pursuing economic growth by permitting companies to trade free of regulatory standards, the government should be able to determine where a line needs to be drawn for the sake of public welfare (Wilk, 2000). Toys are meant to be used by children and if their welfare is undermined by irresponsible corporate behavior, then the country is doing little to protect the future of this country. Thus, individuals in positions of governance ought to stand firm against irresponsible corporate behavior by designing laws and policies that will stop corporations from selling toys manufactured in regions without sound regulatory frameworks.

 

References

Beamish, P. W., & Bapuji, H. (2008). Toy recalls and China: Emotion vs. evidence. Management and Organization Review, 4(2), 197-209.

Donaldson, T. (1996, September). Values in tension: Ethics away from home. Harvard Business Review, 74(5), 48–62.

Lawrence, A. T., & Weber, J. (2014). Business and Society: Stakeholders, Ethics, Public Policy (Fifteenth ed.). New York, NY: McGraw‐Hill Education.

Moore, M., Shanghai, & Hall, J. (2011). ‘One Third of Chinese Toys Contain Heavy Metals’. Telegraph. Available at: https://www.telegraph.co.uk/news/worldnews/asia/china/8944028/One-third-of-Chinese-toys-contain-heavy-metals.html

Morrison, W. (2009). Health and Safety Concerns over U.S. Imports of Chinese Products: An Overview. Congressional Research Service. Available at: https://fas.org/sgp/crs/row/RS22713.pdf

Purdy, K. (2015). Poisonous Playthings and Toxic Toys: America’s Fascination with Manufactured Toxicity. Dirty Words, 53.

SABIC. (2019). Sustainability. https://www.sabic.com/en/sustainability

Shen, Z., Hou, D., Zhang, P., Wang, Y., Zhang, Y., Shi, P., & O’Connor, D. (2018). Lead-based paint in children’s toys sold on China’s major online shopping platforms. Environmental pollution241, 311-318.

The Coca-Cola Company. (2019). 2018 Business & Sustainability Report. Available at:    https://www.coca-            colacompany.com/content/dam/journey/us/en/private/fileassets/pdf/2019/Coca-Cola-         Business-and-Sustainability-Report.pdf

Wilk, R. (2000). Consumer goods as dialogue about development. Development: Identities, representations, alternatives5, 177.