Case Study of Ethical Issues in 7-Eleven Company †Free Samples

Question: Discuss about the Ethical Issues in 7-Eleven Company. Answer: Introduction An ethical practice in the business involves integration of fair behaviour and values as a responsibility to act in the interest of society (Brink, 2011). There are various branches that deal with the business ethic in business such as corporate governance and social responsibility concept, compliance and code of conducts that aids an organization in providing credibility and transparency in the business operations (Brink, 2011). Along with this, it enhances the organizational environment and culture that ensures the rights of stakeholders. Thus, in the present study, concept of ethics of business has been elaborated with the recent example of 7-Eleven company wage scandal. Moreover, recommendations have been illustrated to augment the situation in the near future and improving the social image of the company fairly. Lastly, the study elucidates the importance and role of ethics in business. Recent business ethical issue of wage scandal in 7-Eleven Company 7-Eleven company is a global retail chain operating convenience stores in the retail industry, founded in 1927 in Texas, U.S. The company is presently dealing in 18 and more countries and has around 56600 stores worldwide. Its stores was converted as Totem Stores in 1946 by renaming its franchise (7-Eleven, 2017). In august 2015, Fairfax Media and ABCs Four Corners program revealed that 7-Eleven company is involved in the wage theft of its employees in the Australian franchise. Furthermore, the company has hired most of the foreigner workers which can be illegally working in Australia. It has given 7-Eleven an advantage to exploit these workers for decades and also not let the complained by any of the worker in legal battle. In addition to this, the company was examined and facts were found that company was operating its Australian stores by given even minimum payroll rate and no or half of the minimum award rate in case of any overtime, overtime, weekends, nights and public occasion s and holidays (Tham, 2016). The recording of accounting was done in a very convenient way to wage theft of estimate two third of the Australian franchise in the company. It has also been found in the investigation by the independent panel of Deloitte and Allan Fels who was a former Australian competitor and consumer commission that the former workers was underpaid and they have been given half of the minimum legal rate of wages holidays (Tham, 2016). Besides that, the company has started to give their employees minimum wages after the case comes into the light initially but likewise, they stated to take back of their payroll in cash. After the case exposed in the media with full evidences jury had decided to take every single case for underpaid wage as an individual claim (Ferguson and Danckert, 2016). More to this, it has also been explored in the case that this case was in the insight of top level management of 7-Eleven company. This ethical issue was previously reported to the top management but efficiently ignored and no actions were taken back then. Similarly, no compensation was paid o any worker who was not treated fairly in this process holid ays (Tham, 2016). When people reported about theft management ignored the fact totally and fired the employees who spoke about it with no payroll settlement. In the end, top management comprising chairman and chief executive Russ Withers and Warren Wilmon resigned from their posts and replaces by Michael Smith and Bob Baily respectively (7-Eleven, 2017). Recommendation for ethical issue In this context, it has been found that the matter was concerned with top management misbehaved with employees, no ethical code and practices was followed in the organizational culture as well as poor corporate governance (Mihailovi?, et al., 2015). First of all ethical issues with corporate governance can be properly investigated and directed by the professional accountant to explore the relevant facts, fundamental principles, potential course of action and implementation of internal procedure. Code of conduct encourages an organizational culture with ethical behaviour in the top management (Crane and Matten, 2016). In this case management from top to bottom was not conducting the operations ethically even after knowing the whole situation and unfairness. Thus change of management is advised for establishing the organisational culture with effective values and behaviour. Moreover, the company should also change of the ownership so that more transparency and legal issues can be handled (Crane and Matten, 2016). This can be implicated from the above issue that the wage theft is problem arise due to lack of internal control. Furthermore, the financial accountants of the company were also involved in the scam because many of the assets were hidden on the records to deceive the workers (Ferguson and Toft, 2015). Thus, an ethical roadmap to motivate the internal stakeholders for the ethical and responsible behaviour is required. The process of disregarding of fair payroll practice was in operation for more than a decade that also emphasis on the regular changes of top management over a certain period of time is very necessary (Mihailovi?, et al., 2015). Importance and role of ethics in business Ethics and values are the major part of everyones life. Its significance in life is related with the quality of life that satisfies basic human needs (Kumar, et al. 2014). Fairness and honesty in business and workplace provides credibility and transparency that helps in effective corporate governance. Along with this, it helps in bringing up stakeholders and workers together with effective and strong leadership skills. It improves decision making of the management on the basis of vale and fairness which helps the organisation in establishment of monopoly in the market and competing against its opponents (Kumar, et al. 2014). Business ethics gives the confidence to the clients, stakeholders and consumers to invest their money in the organisation. Moreover, it helps in ensuring the protection of stakeholders right and establishing prominent relationship between public and the organisation (Ferrell, et al. 2012). In addition to this, it provides convenience to the company to carry on its business practices and ethics. It establishes goodwill for the company in the market for fair and valuable practice that ultimately affects the sale and profit of the company positively (Ferrell, et al. 2012). It improves organisational culture which gives motivation to the employees and increases productivity and performance of the organisation. Basically, the role of ethics in the business is associated with the creation of culture based on values and moral in the workplace (Mehrotra, 2012). Ethical practices from the top level management aids the organisation in encouraging the rest of the organisation to work with more commitment with equality and precisely. On the other hand, it facilitates common language of integrity and honesty at the time of critical situation or difficulty. Responsibility of ethical practices is to provide a healthy and safe environment for the stakeholders of the company for the future of organisation (Mehrotra, 2012). Ethics in business also provides moral support to achieve the goals and objectives by good decision making of strategy followed in internal organisational operations. The ethics in business is also very important for the control of market conditions of the organisations. It helps in negotiating in the market system where labour union and government plays an important role in the economy (Ekuma and Akobo, 2015). It empowers the company condition and dealing position in negotiation which often ends up in favourable terms and satisfactory win to other party too. Additionally, ethical practices make easy changes in the policy and standards imposed by government and labour unions. Due to liberalisation and internationalisation, it is now noticed that employee policy and practices with standards integrated in any organisation is a subject of debate for trade unions and various other employee unions in an international level. Therefore, it also facilitates strategic and policy establishment for labours of the organisation with effective tools that helps in increasing profits and augmenting goodwill in front of international trade unions (Ekuma and Akobo, 2015). It stimulates the rules and regulations such as compensation related payroll policies, labour and union law, discrimination, involve diverse culture and health and safety are some common issues that are effectively handled by HR. Conclusion From the above discussion it can be measured that ethical practices in the business is very essential part for the survival of the company. Companies which do not follow the ethics in business are caught after a certain period of time. It has also been depicted that the ethical issues are mostly because of unfair practices executed or made in the sight of top level management. In the present scenario, 7-Eleven wage theft case has been explored to examine the concept of ethical behaviour in the organisation. Minimising the payroll of workers in the 7-Eleven stores in Australian franchise less than the legal pay was the major concern in this case study. In addition to this, opinion for solving the ethical issues by change of management and ownership of the business has also been described in the study. Besides that, role and significance of the organisation entails improving organisational culture and increasing reputation of the company. References 7-Eleven. 2017. About Us. Financial [Online].Available at: https://corp.7-eleven.com/corp/about [Accessed on: 05 May 2017]. Brink, A. 2011. Corporate Governance and Business Ethics. Springer Science Business Media. Crane, A., and Matten, D. 2016. Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization. Oxford University Press. Ekuma, K. J., and Akobo, L. A. 2015. Human Resource Management Ethics and Professionals Dilemmas: A Review and Research Agenda. Human Resource Management Research 5(3), pp. 47-57. Ferguson A., and Toft, K. 2015. [Online].Available at: https://www.abc.net.au/news/2015-08-31/exploitation-part-of-7-eleven-business-model-insider-says/6733682 [Accessed on: 05 May 2017]. Ferguson, A., and Danckert, S. 2016. An inconvenient year for 7-Eleven. [Online].Available at: https://www.smh.com.au/business/retail/an-inconvenient-year-for-7eleven-20160826-gr1xff.html [Accessed on: 05 May 2017]. Ferrell, O. C., et al. 2012. Business Ethics: Ethical Decision Making Cases. 9th ed. Cengage Learning. Kumar, K. S., et al. 2014. The Importance of Business Ethics in Globalisation -A Study. International Journal of Advancements in Research Technology 3(4), pp. 285- 298. Mehrotra, C. 2012. Ethics: ?Its Importance, Role and Code in Information Technology. International Journal of Advanced Research in Computer Science and Software Engineering 7(2), pp. 417-421. Mihailovi?, B., et al. 2015. Role of business ethics in management of human resources. 61(1), pp. 85-96. Tham, J. C. 2016. 7-Eleven is the tip of the iceberg in worker exploitation. So who's turning a blind eye? [Online].Available at: https://www.theguardian.com/commentisfree/2016/may/12/7-eleven-is-the-tip-of-the-iceberg-in-worker-exploitation-so-whos-turning-a-blind-eye [Accessed on: 05 May 2017].