Ethical Business Practices

Topics: Business ethics, Ethics, Social responsibility Pages: 5 (1417 words) Published: June 20, 2013
Ethical business practices
A Cadbury Schweppes case study
Page 1: The importance of ethics in business
Ethics concern an individual's moral judgements about right and wrong. Decisions taken within an organisation may be made by individuals or groups, but whoever makes them will be influenced by the culture of the company. The decision to behave ethically is a moral one; employees must decide what they think is the right course of action. This may involve rejecting the route that would lead to the biggest short-term profit. Ethical behaviour and corporate social responsibility can bring significant benefits to a business. For example, they may: * attract customers to the firm's products, thereby boosting sales and profits * make employees want to stay with the business, reduce labour turnover and therefore increase productivity * attract more employees wanting to work for the business, reduce recruitment costs and enable the company to get the most talented employees * attract investors and keep the company's share price high, thereby protecting the business from takeover. Unethical behaviour or a lack of corporate social responsibility, by comparison, may damage a firm's reputation and make it less appealing to stakeholders. Profits could fall as a result. Along with good corporate governance, ethical behaviour is an integral part of everything that Cadbury Schweppes does. Treating stakeholders fairly is seen as an essential part of the company's success, as described here: 'A creative and well managed corporate and social responsibility programme is in the best interests of all our stakeholders - not just our consumers - but also our shareowners, employees, customers, suppliers and other business partners who work together with us. *' Ensuring that employees understand the company's corporate values is achieved by the statement of 'Our Business Principles' which makes clear the behaviour it seeks from employees. Cadbury Schweppes' good practice was recognised when it was voted one of the 'most admired companies for community and environmental responsibility' by Management Today magazine in 2003. It was also ranked second in the Food and Drink sector in the Business in the Community 'Per Cent Club' Index of corporate giving for 2003, with an investment in the community of around 3of its UK pre tax profits. * Cadbury Schweppes Corporate and Social Responsibility Report 2002

Page 2: Ethics at work
The supply chain and distribution process
This describes the way in which raw materials are sourced and transformed into final products and delivered to customers. Cadbury Schweppes has direct control over what happens in the transformation stage of its own process and can also influence the behaviour of suppliers and distributors. For example, it performs due diligence on potential suppliers by requesting them to complete a questionnaire prior to engagement. This enables Cadbury Schweppes to monitor a supplier and check they adhere to stringent standards in particular criteria. One criteria, for example, may be the environment and the questionnaire allows the supplier to express whether they carry out audits or have an environmental policy. a) Dealing with suppliers

Cadbury Schweppes deals with tens of thousands of suppliers around the world and aims to work closely with them to ensure they receive fair treatment. In the case of cocoa farmers for example, Cadbury Schweppes is a member of a global coalition, which is comprised of industry, governments, non-government organisations and special interest groups created to improve working practices on cocoa farms. The coalition has funded independent surveys into cocoa farming in West Africa that have contributed to the development of programmes to help local communities. In 2003, the coalition also established a foundation, the International Cocoa Initiative - Working Towards Responsible Standards for Cocoa Growing, which aims to support field projects and will...
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