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Ethical Business Management and Fair Pay

Paper Type: Free Assignment Study Level: University / Undergraduate
Wordcount: 2314 words Published: 26th Feb 2020

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Morrisons Employment Tribunal

Morrisons consider many different individuals and groups as stakeholders. Included in these are their colleagues, investors, and consumers (Morrisons Corporate Responsibility Report 2018).  These stakeholders can be affected by many different ethical conflicts and issues which may arise within the business. These ethical issues can be described within business ethics. Business ethics is “the study of business situations, activities and decisions where issues of right and wrong are addressed” (Crane and Matten 2016 p.5). Morrisons are currently under scrutiny regarding the ethical issue of paying unfair wages to their employees. This essay will explore the different stakeholders affected by this issue and how it may have an impact on them. The colleagues of Morrisons face an ethical conflict over fair wages with the owners. “The basis for determining fair wages is commonly the expectations placed on the employee and their performance towards goals” (Crane and Matten 2010 p.316). Employees of Morrisons feel as though their work is being undervalued and underpaid by the owners (Monaghan 2018). This issue is of great concern to the employees as the feeling of being undervalued can lead to a decrease in motivation, resulting in reduced productivity. Employees believe they deserve equal pay and are willing to take legal action to pursue this.  The owners of Morrisons aim to maximise their profits and their shareholders returns by reducing costs. A spokesperson on behalf of Morrisons said “Our aim is to pay our colleagues fairly and equally for the job that they do”(Monaghan 2018). The owners don’t feel as though employees working on the shop floor deserve the same wage as those in the warehouses as their jobs are not of equal value. therefore, they feel that it is okay to pay them a lesser wage than their counterparts working in the warehouses. The investors must deal with the law firm “Leigh Day” who are filing a legal claim on behalf of the employees. “Leigh Day said it would lodge a claim with the employment tribunal service” (Monaghan 2018). Leigh Day aim to gain equal pay for the employees of Morrisons and to claim any back pay they are entitled to. “Back pay is the amount of salary and other benefits that an employee claims that he or she is owed after a wrongful termination” (David Siegel. Investopedia 2018). Leigh day aim to claim back pay that the employees are due based on the unfair wages they have been receiving for several years. Leigh Day are currently only acting on behalf of eight employees, mainly women but stated that if claims are successful eighty thousand employees could claim back pay costing Morrisons up to one billion pounds (Martin Day. Leigh Day 2018). The Investors of Morrisons are aiming to reduce their gender pay gap lower than it already is at 14.9% (Morrisons Corporate Responsibility Report 2018).   The owners accept that there are improvements to be done on reducing the gender pay gap, but they still disagree that floor workers should receive the same pay as employees in the warehouses. The ethical issue of fair pay may cause a conflict between consumers and the investors of Morrisons. Consumers may not shop at Morrisons if they believe they are not being ethically responsible. An article by Joyner and Payne (2002 p.298) states that “70% of the consumers answered that they would not do business with a firm that was not socially responsible, regardless of price.” This shows that a business being unethical can result in a loss of sales and customers which is unwanted by the investors of morrisons.  The investors of Morrisons scrutinise Morrisons activity on a range of environmental and social measures as well as financial performance, to ensure investment risks are limited (Morrisons Corporate Responsibility Report 2018).  The possibility of losing customers would have a massive effect on potential investors choosing to invest their money into the business. Overall the issue of fair pay for the employees is of high importance to all stakeholders discussed above. The employees hold themselves in high regard for the work they are carrying out and believe it is wrong for the owners to be paying them less than other workers. Leigh Day back up the employees by agreeing and are taking legal action to push for their equal wage. The owners still argue that the shop floor workers do not work to the same standard as their warehouse employees and believe they are already receiving a fair wage for their work carried out. As for the investors it is in their best interest for Morrisons to be making a profit by cutting down on all expenses such as their wages.

Part A - Reference List

Personal attributes and ethical decision making

Ethical decision making is concerned with the judgement of right and wrong (Crane and Matten 2010). Managers own personalities can influence their ability to make these decisions. Decision making has always been a main priority of managers within businesses, the ability to make and carry out decisions is key for running a successful business.  This essay will explore how managers personal attributes such as gender, age and religion can affect their ethical decision making within business. One personal attribute managers have is their gender, which can have a massive influence on their perceptions of ethical decisions. There are barely any differences discovered between males and females, although when differences do arise it shows females are more ethical than their male counterparts (O’Fallon and Butterfield 2005). Suggesting that females, although not all of the time, are more ethical than males. “Similar to many prior studies, the present study confirms other findings that females had higher ethical scores (reflecting less tolerance) than males in all ethical domains” (Okleshen and Hoyt p554.) Advantages of having female representatives are that they are most likely to interpret the problems that may arise when making decisions and can help prevent ethical conflicts in the business.A disadvantage is that females are still underrepresented within business and therefore are not being used to the best of their ability, “Women hold 29% of boardroom positions at FTSE 100 companies”  (Neate 2018).  On the other hand, having men on the board can benefit the business as they are more likely to focus their decisions on what will be of benefit financially to the business, but they will identify ethical issues less frequently. These surveys indicate that females are more ethical than males when faced with making decisions, demonstrating that females are better at identifying an ethical issue and are more likely to stop ethical conflicts arising within their business. Another personal trait managers have which can impact someone’s view on ethics is their age. According to Ruegger and King (1992), people in the age bracket of 31 and above were more ethical than those in the age bracket of 30 and below.  This portrays that the older generation are more equipped at tackling ethical issues than the younger generation. However, a study conducted by Browning and Zabriskie (1983) showed that older managers were less likely to identify an ethical issue than the younger managers. The young managers believed accepting favours from companies who were not current suppliers was a form of bribery whereas the older managers saw no problem with this. The advantages of having older managers may be that they will identify more ethical issues which could take effect on the business although it could also result in the business failing to keep up with new methods of managing and making decision as the older generation may be old fashioned with the way they run things. An advantage of having younger managers may be that they will learn and develop over time and become more aware of the ethical issues within business.  These surveys reveal that age does play a part in ethical decision making affecting both the old and young personnel of business. Religious values are also a personal trait of managers which can affect their influence whilst carrying out decisions. “The survey results indicate that a highly religious marketer will tend to adhere more to moral absolutes when making moral judgments than their counterparts” (Singhapakdi 2000 P.311). This implies that having a religious background and upbringing can make people more vigilant when identifying ethical issues. Religious people have a higher tendency to identify and consider the affects that could follow upon making an ethical decision.  According to McNichols and Zimmerer (1985) there is a clear connection between the strength of religious beliefs and the affect it has on an individual’s view of what is ethical and unethical. Having a religious manager can be of benefit to the business as they will take great care when carrying out decisions to ensure they are not unethical. A religious manager may be biased when making decisions based on what religion they study. Non-religious managers may focus more on making profit for the business and therefore may be beneficial to the business as well. The journals demonstrate that religion can play a key factor in what someone considers to be ethical and can impact their thought process when planning to decide on a decision. To conclude there is a connection between managers personal attributes and their ability to carry out an ethical decision. As mentioned above gender, age and religion all play a part in a manager’s ability to make decisions. Having a wide variety of managers, with different traits, would best benefit businesses. It would provide a wide perspective of different views and methods on dealing with the different challenges associated with decision making, and in turn would lead to better decisions being made.

Part B - Reference List

  • Browning, J and Zabriskie, N.B., 1983. How Ethical Are Industrial Buyers?. Industrial Marketing Management, 23(5), pp. 219-224.
  • Crane, A and Matten, D., 2010. Business ethics: managing corporate citizenship and sustainability in the age of globalization. 3rd ed. Oxford: Oxford university press.
  • McNichols, C and Zimmerer, T., 1985. Situational ethics: An empirical study of differentiators of student attitudes. Journal of Business Ethics, 4(3), pp.175-180.
  • O’Fallon, M and Butterfield, K., 2005. A Review of The Empirical Ethical Decision-Making Literature:1996-2003. Journal of business ethics, 59(4), pp. 375-413.
  • Okleshen, M and Hoyt, R., 2006. A cross cultural comparison of ethical perspectives and decision approaches of business students: United States of America versus New Zealand. Journal of business ethics, 15(5), pp. 537-549.
  • Ruegger, D and King, E., 1992. A study of the effect of age and gender upon student business ethics. Journal of business ethics, 11(3), pp. 179-186.
  • Singhapakdi, A. et al., 2000. Toward an Understanding of Religiousness and Marketing Ethics: An Empirical Study. Journal of Business Ethics, 27(4), pp.305-319.
  • 2018. FTSE 350 firms falling short of female board member targets. [Online]. London: Guardian. Available from: https://www.theguardian.com/business/2018/jun/27/ftse-350-firms-falling-short-of-female-board-member-targets [Accessed from 23rd October 2018].


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