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Comparative Business Ethics, Holmes Institute, Australia

HC2121 Comparative Business Ethics And Social Responsibility


Purpose of the assessment: 1. Distinguish the difference between personal and business ethics in organisation

2. Ability to identify stakeholders role in business ethics, define social responsibility, explore the role of corporate governance in structuring ethics and social responsibility in business

3. Compare and contrast diverse approaches to ethical decision making.

Introduction: On March 14, 2019 a news report was surfacing online that the popular food company was conducting unethical practices in a much proliferated rate (Molloy, 2019). There was an investigation that was being carried out and it led to the understanding that one of Australia's biggest retail food companies was being slammed for the incompetent treatment of their franchises. Retail Food Group is one of the most reputed companies in Australia. Often abbreviated as RFG they are also an ASX listed company and an Australian Franchisor at the same time. Essentially, two of its companies have been slammed for having an unethical business model. This discussion is mainly entitled towards the identification of certain issues that have prompted such behaviour from their side to make sure that the essence of personal ethics and the idea of proper decision making process is being considered throughout the course of assignment. The discussion would also shed light on the essence of ethical moral philosophies that are essential for every organisation to follow.

Question: Choose a recent news/media article that has been published within the last 3 months that concerns a business ethics issue/s within Australia only and answer the following questions.

Answer: Outline and Summary: According to the report published by Molloy (2019), it was being established that RFG was constantly mistreating its franchises and it reached to that particular point where it was being recommended to people to not buy franchises of this company or from any of the companies that have been operating under RFG. The main concern was mainly associated with the kind of sustainability their business model provided and with the help of an appropriate investigation it was being identified that the businesses lacked this essential course. It eventually led to the situation where the reputation of Franchising in Australia has been severely damaged and people are stepping off from their decisions. RFG has exposed almost every business to substantial amount of strategic risk and this being the reason why everything was considered to be impactful. There were even allegations that the company was avoiding legal compliances and even refused inquiry requests. They even failed to provide proper documentation, which might have consisted event more valid information on the kind of situation that has been created around and that it would eventually degrade the position of the company even further. The inquiry eventually found out that the company was involved in churning (failed sites being sold to new operators repeatedly) and burning (launching new outlets despite not being commercially viable) of more than 200 of their outlets (Molloy, 2019). Also, the amount of controversies and lawsuits they had involved themselves were being extremely suspicious.

This has eventually created a fear among various business personnel and operators that they might incur losses if they extend their association with RFG. With more than 200 outlets being already subjected to situation it is essential to consider that the company is no way considerate towards using ethical practices which would ensure long term benefits for them and for the operators as well. Even though the process of churning and burning is mainly entitled to yield substantial amount of benefits for the franchisors but the foundation is completely build upon a lie, however there would extreme amount of profits from site sales and from the franchise fees. It has also been identified from relevant amount of investigation that the company's executives were indulged in substantial amount of legal breaches, insider trading, short selling, market disclosure, tax avoidance and many other practices that should have been avoided constantly (Molloy, 2019). It is essential to understand that an organisation must be capable enough to understand the kind of position it holds in the market and have the kind of suitability to deal with every situation in an effective manner and by not doing something illegal (Rozuel, 2016).


Decision Making/Judgement Process to the Ethical Issue: Value and ethical culture plays an extremely incremental role in influencing the decision making process of any individual. This is one of the reasons why the individualistic decisions continue to vary in an orderly manner. Thus, it must be considered that the foundation of an organisation must begin with proper organisational values and certain amount of ethical principles that permits the people and the key officials to take responsibility of their actions and work accordingly. According to McMurrian and Matulich (2016), the idea of ethical decision making or the judgements that are being formed also completely depends on the idea that the individual has the understanding of the differences that exists between right or wrong and is able to establish a balance between choice and morale. This balance is eventually a guide towards making decisions which would eventually permit the idea of discarding any illegal or unethical business practices. When an individual is able to question themselves, ‘what a reasonable would consider doing in this situation?', eventually they have separated themselves from any sort of ethical dilemma that would eventually turn their decisions around. The person has to find proper excuses and logic to reason with their behaviour as ethically corrupted ventures are never appreciated in business (Alonso-Almeida et al., 2015). There have been various examples of such occurrences around the global market, which eventually shows that people are even more aware now and are extremely considerate towards the idea of establishing a business that would ensue long term benefits to them.

Manifestation of the core values is every time essential in almost every contextual happening. Though these are mainly fostered during childhood or the initial working days of the people at a completely new organisation, it is mandatory to understand that the people must have worked hard extremely hard to build the foundation of their organisation on something they have utmost belief on and by abiding to them constantly (Greenwoodand Freeman, 2018). One of the essential aspects that needs to be highlighted here is the idea that an organisation like RFG that have taken years to establish their empire, would only be considerate towards undertaking unethical behaviour when their encore has been corrupted with extreme range of profitability and their passion takes over the outlandish thoughts of greed (Brusoni and Vaccaro, 2017). An organisation whose foundation is the three legged integration of ethical values, qualitative work and good work principles would never opt for something that crashes their base of mindfulness in the matter of days.
Ethical Moral Philosophies

In the light of recent events, where it has been considered extremely normal for organisation committing crimes and considering abiding by unethical virtues, there exists examples of numerous organisations that still abide by their consideration of ethical values and ideologies. When companies like RFG make sure that they can encourage their profit driven agendas, there are many more of the organisation who make sure that they earn enough profit to establish themselves in the heart and soul of every individual they conduct business with (Luetgeet al., 2016). An organisation must be able to induce the idea that the consideration of certain ethical philosophies is essential for making sure that the organisation is able to understand the values for the validation of people and for their business to stay intact for years to come. Majority of the ethical moral philosophies of a business is associated with honesty, integrity and loyalty (Reineckeet al., 2016). These three form an ensemble in the truest from in the minds of the people. Once the customers have gained the satisfaction that the companies would be glued to these ideologies then they develop a sense of satisfaction and trust over them (Wang and Calvano, 2015). Also, with the kind of relationship that exists between them is over considered by many other business ventures that eventually results in partnerships, franchises and many other successful business collaborations.

Thus, it is extremely incremental for an organisation to ensure that they have established a sense of ethical and moral values of fairness and Law abiding nature as well for their added performance in the situation of their success throughout the years (Hummel et al., 2018). If RFG had maintained that standards like they did in their previous years then they would have still been considered as one of the prominent franchisors in Australia. They have attracted numerous range of investments due to their reputation and their ability to assure profit to everyone who have been associated with them. This eventually leads to the remark that the company right now is not just failing people but the law as well. They are in no position to maintain a sense of morality anymore. 


Conclusion: The discussion provided above led to the understanding of varied range of ideas that are associated with the concept of business ethics. It is mandatory that an organisation is able to understand the value of this concepts and is able to avoid any such practices that makes the people and the law makers lose faith on their values. The discussion also led to the understanding of an organisation named Retail Food Group (RFG), that had been considered as one of the most popular companies in Australia and how they have succeeded onto doing preservative and beneficial only for them but extremely disheartening and criminal in terms of the morality that is being maintained by the lawmakers. It was being identified that the organisation failed to have any essence that would assure them regaining the trust that they have lost.

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