Ethical Business Behavior

Ethical Business Behavior

Large enterprises have high potential and numerous opportunities for succeeding in the global market. However, managing a multinational company is rather challenging because such firms are bound by diverse responsibilities. According to Frederickson (2005), a company must find a strategy of accommodating interests and concerns raised by all its stakeholders. Particularly, multinational companies should have high knowledge of the concept of ethical business behavior. Primark and Anglo-American are reputable companies that have successfully conquered international market. Evaluating the practices assumed by these companies could review important information about the idea of ethical business behavior. The script defines the concept of ethical business behavior, and explores the cost and benefits to a company that assumes an ethical behavior. Furthermore, the paper selects one component of Svennson & Woods model and discusses its relevance to the Anglo-American Company.

According to Great Britain & Dismore (2009), ethical business behavior may be viewed as both normative ethics and values that guide an organization. Ethical business behavior is also a habit that coincides with the society’s expectations. The society expects companies to operate in an ethical manner that develops the welfare of the entire community. Ferrell, Fraedrich, & Ferrell (2010), argues that ethical business practices entail acknowledging that the ultimate legal and moral standards are realized in company’s relationships with the stakeholders in its business community. Particularly, ethical behavior includes making good corporate decisions based on the existing “code of ethics.” Ethical corporate behavior evaluates ethical concerns that business decision-makers face while describes moral principles that can be utilized to help resolve these issues. This is essential because decisions or practices with ethical dimensions can develop company’s reputation considerably (Frederickson, 2005).

Anglo American is an international mining company of great relevance to the global economy. The company has widespread activities in Africa, where more than 70% of its employees live. Furthermore, the company has a main employer in Europe and it has employed more than 8 000 people in UK (Great Britain & Dismore, 2009). Anglo American understands that the nature of their business and the larger number of people they serve demand them to conduct their activities in an ethical manner. Consequently, the company has embraced the idea of corporate social responsibility (CSR) that it strives to develop by emphasizing two main strategies. Initially, the company has prioritized the need of developing communities in which they operate. Anglo American’s ethical statement acknowledges that the company can only prosper if its actions account for the needs of stakeholders such as employees, customers, governments, suppliers and communities (Cory, 2005). Secondly, the company is committed to establishing a safe environment for its employees. The company understands that mining activities predispose workers to severe dangers. This means that the organization has a crucial responsibility of ensuring its workers are provided with safe working environment. Furthermore, Anglo American upholds the Voluntary Principles on Security and Human Rights (VPSHR) that highlights principles and procedures for ensuring that company are operating on strategies, which promote safety for their employees. The company is also sensitive to environmental issues and is committed to combating corruption and enhancing integrity in the management of its revenue (Cory, 2005).

Primark is a multinational company with stores in various countries including UK, Netherlands, Ireland, Belgium, Portugal and Germany (Frederickson, 2005). The global fraternity commends the company for selling clothes at sustainable prices. The company’s success is attributable to its strategic procedures for sourcing raw materials, producing clothes with simple designs that targets young fashion-sensitive clients and offering them stylish yet quality clothes (Great Britain & Dismore, 2009). Primark’s major ethical procedure values the need of supplying their customers with quality products at a reduced cost. Consequently, the company has formulated strategies for reducing its operation and production costs in order to pass the benefit to its customers. For example, the company obtains most of its clothing materials from countries like India, China and Turkey. This is because these countries have comparatively lower material and labor costs. Moreover, the company is dedicated to being socially responsible when executing operations in host countries (Great Britain & Dismore, 2009). The company has strong code of conduct that it published in all areas in which it operates. The code of conduct provides guidelines on how the organization is supposed to handle its employees, care for the environment and observe all regulations stipulated by the host nation. The code emphasizes aspects such as fair and unbiased employees’ recruitment procedures, encouraging freedom of association, ensuring safe working conditions, promoting sustainable exploitation of resources, discouraging discriminations and eliminating any kind of inhuman activity among others (Cory, 2005). Furthermore, the company values its suppliers and manufactures; however, it demands them to embrace ethical practices (Great Britain & Dismore, 2009).

The idea of embracing an ethical behavior is of great significance and invites various benefits to an organization. Initially, observing ethical standards is cost effective because the practice provides the company with a strategy of saving resources that could be wasted in loss or damage compensation plans (Frederickson, 2005). This includes the cost for re-building the company’s reputation that may be dented by unethical practices. Furthermore, the practice provides the company with the opportunity of competing with others successfully without engaging in fraud. An effective ethical plan also enhances a strong public image that is essential in the contemporary business environment. Cory (2005) argues that strong ethical standards provide a vital platform for establishing commercially and socially successful enterprises.

Svennson & Woods’s international business with integrity scheme applies in the activities of Anglo American because of the nature of the mining procedures in foreign companies and the environmental concerns surrounding the practice. Svennoson & Wood’s model highlights that individuals in the first world communities expect their businesses to present integrity in their global corporate activities (Ferrell, Fraedrich & Ferrell, 2010). The model also argues that major international firms should act ethically because it is right, and it lies within their authority to act in such manner. A prominent Anglo American goal entails exploiting resources in a sustainable manner. This is essential considering the fact that the global community is entirely concerned about environment. Consequently, the company faces a challenge of producing the products that sustain demand, while remaining sensitive to the environment (Ferrell, Fraedrich, & Ferrell, 2010). Countries have instituted various laws for protecting the environment. Interestingly, Anglo American must adopt strategies that are in harmony with such regulations.

Conclusively, ethical behavior entails adopting practices that value company’s customers, suppliers, employees and the community. These values need to guide all procedures adopted by an organization. An ethical behavior is essential because it attracts various benefits to the company and its stakeholders. Anglo American and Primark provide strategic examples of the businesses that have embraced the principles of ethical conduct successfully. These companies have been able to satisfy their shareholder’s expectations while maintaining an ethical behavior. Major international corporations should utilize the example set by these companies in developing their ethical standards in order to reap the benefits associated with the practice.


Cory, J. (2005). Activist business ethics. Boston: Kluwer Academic Publishers.

Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2010). Business ethics: Ethical decision making and cases : 2009 update. Mason, OH: South-Western Cengage Learning.

Frederickson, H. G. (2005). Ethics in public management. Armonk, N.Y. [u.a.: Sharpe.

Great Britain., & Dismore, A. (2009). Any of our business?: Human rights and the UK private sector : first report of session 2009-10. London: Stationery Office.

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