Businesses must operate within a set of ethical provisions and principles if they are to appeal to varied stakeholders. In essence, most business decisions must involve an analysis of the expected behavior entrenched in the code of conduct. Following this realization, the top management and other employees should realize that a breach of ethical standards might lead to legal ramifications, which are not good for business. This would be the case especially if there are clear guidelines on how to or not to conduct business in the global arena. Of importance is the fact that business entities must base their business decisions on philosophical theories, which help establish the rightness or wrongness of business decisions.
Response to the International Labor Group
A case in point is this organization, which is not sure whether to buy the expensive fair trade cotton or buy cheaper cotton from brokers. Either way, the company stands to lose out either financially or legally. In the first case buying fair trade cotton would mean that the organization will require to incur more production costs as the price of fair trade cotton is relatively high. On the other hand, the company would risk legal ramifications if it buys the cheap cotton, as the campaign for fair-trade cotton is a global call. The conflicting options then call for the concerned party to adopt a philosophical theory that will both ethical and beneficial. In essence, a company at such a crossroad may choose to use consequentialism as a defense to its choices in relation to fair-trade cotton.
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The consequentialism ethical theory helps individuals to judge whether an action is right or wrong depending on the consequences of the actions. If the consequences are beneficial, then the action is right and if the consequences are disastrous then the actions are wrong (Mulgan, 2016). However, it is important to note that it is not always easy to know what the consequences of an action are. The consequentialism ethical theory is subdivided into two categories: utilitarianism and hedonism. Utilitarianism proposes that the consequences an action is right if it benefits the majority while hedonism proposes that the consequences of an action are right if it produces pleasure.
The company will choose to buy fair-trade cotton as opposed to the cheap cotton sold by the brokers. In making this decision, the company is aware that it will incur huge costs in sourcing the fair-trade cotton as it is sold at a relatively high price as compared to the usual cotton. The high price of the fair-trade will, in turn, have a ripple effect on the production costs, which may hurt the company’s profitability. However, the company realizes that it must endeavor to advance this proposal considering that it will benefit a majority of stakeholders who are the farmers. For a long time, cotton farmers have suffered at the hands of brokers who buy cotton at very low prices in spite of the rise in cotton production costs (Fairtrade Foundation, 2019). Consequently, most cotton farmers across Asia and Central and western Africa have incurred huge debts which have worsened their living standards (Krasnozhon, Simpson and Block, 2015)). This sad turn of events has been disastrous and some farmers have committed suicide to escape this misery.
The company realizes that sourcing fair-trade cotton will hurt the company’s profitability and the employees are not comfortable with such a turn of events. Moreover, the company stands to sever the long-standing relationship with the local middlemen who have access to cotton cheaply. Putting these aspects into consideration, the company realizes that it stands to miss the lucrative business deals by the middlemen. However, the company will not continue to jeopardize the lives of the farmers who have continually suffered to produce cotton. A time has come for the company to buy only fair-trade cotton, as it is better and will produce good quality cotton products while significantly improving the cotton farmer’s lives.
References
Fairtrade Foundation. (2019). About Cotton. Retrieved on 24 January 2019 from https://www.fairtrade.org.uk/en/farmers-and-workers/cotton/about-cotton
Krasnozhon, L. A., Simpson, D., & Block, W. E. (2015). Fairtrade: Its real impact on the working poor. The Review of Social and Economic Issues , 1(2), 6-28.
Mulgan, T. (2016). Ethical consequentialism. Oxford Bibliographies . Retrieved on 24 January 2019, from http://www.oxfordbibliographies.com/view/document/obo-9780195396577/obo-9780195396577-0026.xml
