Doing the right thing actually pays. Ethical companies keep their employees longer, their customers buy more, and their revenues increase. (Seidman, 2002) Organizations have the responsibility of ensuring that they are operating in an ethical way, and not just trying to adhere to the “bare minimum” standards. This entails that organizations operate to ensure that their products are safe, their workers are receiving their fair rights, that they are being accountable to the environment, and that they are operating with the utmost integrity.
In the 1970’s Ford Motor Company offered the Pinto to car consumers. Prior to offering the car onto the auto market, Ford performed their regular safety tests. The results of these tests showed that the car was prone to fuel tank fires in rear-end collisions at speeds as low as 21 mph. Ford also knew that the cost to correct this problem was $10-15 per vehicle. However, they went ahead and offered the vehicle on the auto market. As a result, Ford recalled 1.4 million Pintos, at least 59 people burned to death in rear-end collisions, and over 100 lawsuits forced Ford to pay out millions of dollars in damages. All of these costs, in addition to the loss of trust in their brand name, add up to more than the $10-15 per vehicle it would have cost Ford to just correct the problem in the first place. (Disasters, n.d.)
Organizations must ensure that they are testing their products prior to putting their products on the market. Further, the results of these tests should be made public when the product is put on the market. If any tests fail, especially tests which could/would result in bodily harm or death to the consumers, then they must make sure these discrepancies are corrected prior to offering the product for sale or use.
The National Labor Committee (NLC) has alleged that Toyota has been operating sweat shops, working with dictators, and having a part in human trafficking. In addition, the NLC alleges that Toyota is guilty of offering low wages for workers and long hours without overtime pay. These allegations also include examples of a few workers who committed suicide allegedly because they were put under too much pressure to perform. (The Toyota, 2008) This could be detrimental to the squeaky-clean image which Toyota has had for so long.
Organizations have a social responsibility to the rights of workers and the rights of all human beings. If the laws, standards, and regulations in a host country in which organizations operate are more lax than those in the United States, the organizations have the responsibility to set the higher standard. Businesses should follow in the footsteps of Ford Motors and adopt the Code of Basic Working Conditions, which address issues such as child and forced labor, health and safety, pay, freedom to associate, discrimination, and work hours. (Ford, 2006) This Code should apply to all of organizations’ global operations, including the operations of their suppliers. They should put pressure on their suppliers to enforce this Code or else they will seek other suppliers. Organizations need to keep the trust in their brand with regards to workers’ rights.
General Motors (GM) has made significant improvements since 1994 in reducing its factory emissions, publishing annual reports on its progress, and engaging non-corporate stakeholders in its environmental performance. This has all been done in accordance with GM’s partnership with CERES, which promotes protecting human health, natural resources, and the global environment. More specifically, GM has increased the recycled content used in its vehicles, increased the recyclability of its vehicles, and has increased vehicle fuel economy model by model. (General Motors, 2002)
Although other countries have more lenient guidelines regarding the environment, organizations have an ethical responsibility to adhere to guidelines and set goals like those set forth in the partnership between CERES and GM. Organizations should consider becoming one of the nearly 60 companies endorsing Ceres. (General Motors, 2002) By raising their standards, organizations can set the trend for future companies which operate in other countries, and safeguard their brand name when it comes to environmental protection.
GM has a guideline of “winning with integrity,” which demonstrates their commitment to integrity, and covers the subjects of personal integrity, integrity in the workplace, integrity in the marketplace, and integrity in society and its communities. More specifically, its hits on anti-bribery; conflicts of interest; export controls; gifts, entertainment, and gratuities; intellectual property rights; and, as mentioned, personal and workplace integrity. (GSP, 2005)
Organizations should adopt this “winning with integrity” guideline to its own operations and insist that its suppliers adopt it as well. They shall adhere to these guidelines with the strictest standards in place. Further, they can also maintain their integrity by always operating with honesty, addressing complaints rather than trying to bury them, and working to correct problems instead of cover them up. (Reay, 2008) If businesses make a mistake or one of their branches fails in adhering to their ethics code, they should acknowledge there was an ethical breach publicly and work to correct the problem. This will serve them better in the consumer world rather than trying to pay millions of dollars in trying to cover the problem up, and risking the possibility of getting caught and tarnishing the brand name.
Organizations worldwide can and will be faced with a plethora of ethical decisions. As the Hon. Justice Potter Stewart wrote, “There is a big difference between what we have the right to do and what is right.” Organizations needs to operate with integrity and ensure that they are adhering to high standards with regards to product safety, workers’ rights, and the environment. Their employees, customers, and shareholders are all counting on it.
Disasters of the Ford pinto. (n.d.). Retrieved December 27, 2008, from http://www.fordpinto.com/blowup3.htm
Ford leads industry in workers’ rights, sustainable community initiatives. (2006, July 21). Ford Motor Company. Retrieved December 27, 2008, from http://www.prdomain.com/companies/F/FordMotor/newsreleases/200672234300.htm
General Motors environmental performance measured. (2002, January 30). Corporate Social Responsibility News. Retrieved December 27, 2008, from http://www.csrwire.com/News/899.html
GSP in action: General Motors. (2005). Leon H. Sullivan Foundation. Retrieved December 27, 2008, from http://www.thesullivanfoundation.org/gsp/inAction/inAction%20-%20GM/default.asp
Reay, J. (2008, February 27). Unethical Business Practices. Retrieved December 27, 2008, from http://ezinearticles.com/?Unethical-Business-Practices&id=1013362
Seidman, D. (2002, June 14). Do the right thing: UCLA commencement. UCLA Commencement, Keynote Address. Retrieved December 27, 2008, from http://www.lrn.com/ceo-insights/do-the-right-thing.html
The Toyota you don’t know: The race to the bottom in the auto industry. (2008, June). The National Labor Committee. Retrieved December 27, 2008, from http://www.nlcnet.org/article.php?id=562