Various ethical issues arise in both global and domestic business environment. Business ethics are acceptable principles that examine ethical or moral problems that arise in a business environment (Deresky, 2017) . Ethical issues may vary from one country to another. Common ethical issues involve employment practices, corruption, moral obligation, human rights, pollution and environmental regulations. This business ethics paper addresses the challenge posed by Nestle attempt to privatize water. The study highlight the ethical issues involved in the case of Nestle and these issues arise in many other domestic and global business environments. Water is one of the most important raw materials and therefore the question on whether to privatize its supply to the population or not should consider human rights. Regulation of water use is very important but should as well be considered a public right.
Ferrell & Fraedrich, (2015) assert that it is unacceptable for h uman rights such as freedom to access certain commodities, freedom of movement, freedom of speech among others to be take for granted. Using nestle company attempt to privatize water supply as our case study show how large corporations may infringe the rights of individuals. Such instances may force communities to sell or lease important resources because of hardship. Privating water leads to a form of monopoly where the company can set its own rates and prices that may humiliate the consumers. The human right to water does not only protect the consumers but also help conserve the water sources. Everyone should have access to water since it is a basic human need but its profitability should not be trampled upon by the corporate world.
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Every corporations have moral obligations. These obligations are their social responsibility to serve or give back to the societies that give the m the opportunity to grow (Deresky, 2017) . The Nestle Company has neglected their moral obligation by upping their water production at the expense of the people. They extract water from several areas this leads to increase in the amount of wild fires and droughts. Instead of pushing their own agenda organizations should work together to change and meet the needs of the society. I am inclined to agree with the CEO of Nestle, Brabeck, who says that all players in the society need to become effective in order to overcome the problem of water scarcity.
Despite the fact that corruption is bad and it may harm the economic development of a country, it is a vice that affects almost every society (Wang & Calvano, 2015). Corporations may bribe governments to remove bureaucratic barriers to their business. The Nestle Company resorted to changing its tactics from the locals when they refused the stationing of a company in their community. They decide to do underground dealings with the city government which does not involve the locals. The city council the sells the water to Nestle through corruption and hence the locals decide to vote to send the company out. Activists also accuse Nestle of being more interested in lining its own pockets by privatization of countries water supply through backdoor and hence corruption is seen with the company rather than the urge to save the planet from shortage in water supply. Nestle also extracted ground water for its bottled brand at the expense of the communities in poor countries.
Ethical dilemma may also be referred to as ethical paradoxes. Deresky, (2017) point out that in international business perspective, ethical dilemma are situations where available alternative seem to be ethically right, that is, any course of action taken has a subsequent collateral damage. Organizations and employees always try to make the right decision but certain situations are so challenging that they call for one to choose between moral and immoral act. Pressure to perform and help the business succeed often land employees on ethical paradoxes. By emphasizing on profits and results the management may often turn a blind eye on ethical breaches of employees who perform well. Moreover, financial pressure and hunger for recognition may make some employees so desperate that they are ready to do anything even if unethical so as to meet their desires (Deresky, 2017). A typical example of ethical dilemma in the case of Nestle is privatizing water supply or not privatizing it or considering water a human right. While the company may wish to achieve its objective of profit maximization by privatization of water, the decision may adversely affect the society who they have a moral obligation to give back to. Similarly, by making water a human right individuals may take advantage of the freedom and misuse water through pollution and being wasteful. On the other hand water is a basic natural resources and if the society is denied right to its access, they will suffer.
According to Deresky, (2017) provision of training and information by the company enables the employees to face various ethical dilemma. Grappling with the dilemmas if employees do not know the official guidelines of the organization and so the organization should make effort to give tools to comply as well as the ethical training that enables them identify unethical behavior. Moreover, the management should lead by examples and punish those that violate ethics according to the policies of the organization (Ferrell & Fraedrich, 2015) . While we may not refute the fact that water is basic and should be considered a right the goal of every company that intends to invest on it should not only be to make profit but also conserve it for future use as they make it accessible to the consumers. Nestle’s Peter Breback asserts in a video response to water being a human right that, good management of water and valuing it creates an incentive to invest on it and therefore the society should also avoid being wasteful on how they use water. .
Ferrell & Fraedrich, (2015) note that c omplexities of ethical issues in business always become more complicated during its operation. Questions may arise that look to ensure the success of the business. Some questions may be raised to ensure that both the internal and external business stakeholders are kept in check, like should your company avoid operating in areas accused of violating human rights? Is really ethical to outsource production efforts in areas that do not follow environmental legislation? Should you avoid working with parties that employ underage labor? What if these children who provide underage labor are kept fed? If it’s the custom of business people to exchange gifts, can that be considered as bribe?
When constructing corporate ethic guidelines, the legal counsel and the company’s key executives need to determine the ethical issues that are not negotiable (Ferrell & Fraedrich, 2015) . This will help to clearly define the business policy. Corporate guidelines should be acted upon consistently by the staff. This may help to combat corruption since the senior level management help in creating an honest and transparent culture. A business should also evaluate a candidate for hire and factor in their ethical behaviors, similarly when considering promotions the same should be considered this help to hire the appropriate staff for the company. Regular training of a company’s staff should be offered. Educational program that incorporates role playing into the training will help to better equip the staff when they face ethical challenges (Deresky, 2017) .
In summary, understanding and adopting ethical standards for each market and country is important to accomplish a high level of organization, efficiency and effectiveness in the host area also having competitive advantage over rivals in the same industry as well as constituting a long lasting position in a host market, by acquiring a sense of belonging. Whether choosing to employ universal ethics guidelines or pursuing a more complex, region-based strategy, your business needs to remain consistent in enforcing policy. Being too flexible can result in sliding standards and open your firm up to potential legal and financial vulnerability
Reference
Deresky, H. (2017). International management: Managing across borders and cultures . Pearson
Education India.
Ferrell, O. C., & Fraedrich, J. (2015). Business ethics: Ethical decision making & cases . Nelson
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Wang, L. C., & Calvano, L. (2015). Is business ethics education effective? An analysis of
gender, personal ethical perspectives, and moral judgment. Journal of Business Ethics , 126 (4), 591-602.
https://www.snopes.com/fact-check/nestle-ceo-water-not-human-right/
http://www.collective-evolution.com/2016/08/28/nestles-attempt-to-completely-privatize-steal-water-in-oregon-put-to-a-stop-our-water-our-future/
https://www.theguardian.com/sustainable-business/nestle-peter-brabeck-attitude-water-change-stewardship
