Ethical Issues affect every kind of business, from the smallest to the largest multinational company, for this essay I shall limit my investigation to the ethical concerns surrounding the very lucrative sportswear industry, the sports wear supply chain, and how it impacts on the lives of people world wide. Sportswear marketing is now aimed at all sectors of society, irrespective of age, sex or social class, it has grown into a multi million dollar industry (Lancaster & Reynolds, 2005). Although sportswear is essential for athletes and sports players, millions of people the world over buy and wear branded sports clothes and shoes, and every year the market is increasing. Powerful Global brands in the west, such as Nike and Reebok, spend millions of dollars on advertising and promotions (Douglas, 2004). These global brands do not own their own factories but contract factories in third world counties to do the manufacturing keeping the cost down and maximising the profits. These factories are able to make cheap deals and quick deliveries unlike western factories (Douglas, 2004). If a less developed country does not have local regulations equal to the tough western standards, should the firm investing in a developing nation adhere to the local standard or to the western standard? An important ethical issue is whether an international firm should adhere to the same standards of product safety, work safety and environmental protection that are required in its home country (Hill, 2005). Western nation’s laws are amongst the toughest in the world, where product safety, worker safety and the environment are all regulated and enforced rigorously. These ethical issues have received plenty of media coverage in recent years following revelations that western enterprises have been using child labour or very poorly paid sweat shop labour in developing nations (Hill, 2005). Multi million dollar sports companies such as Nike and Adidas were criticised for using sweat shop labour. If using strict western standards were to make a foreign investment unprofitable, it could then deny much needed jobs in a developing nation. Is it better to have a low paying job in a “sweat shop” than to have no job at all? If a multinational company decided to manufacture in the west, would this benefit the workers who were previously employed in a third world factory? (Lantos, 2001). When consumers in the west boycott and protest on behalf of exploited victims in the third world most workers do not support these protests. Poor countries are afraid that tighter labour and environmental controls will reduce their competitiveness and deter foreign investors. This is an area where ethical decision making becomes complicated and ethical choices can be controversial.
Defining the word “ethic” is straight forward and easy to follow but combine it with the word business and it becomes much more complicated. The word ethics is derived from the Greek ethos, which refers specifically to the "character" and "sentiment of the community." Specific definitions include "the principle of conduct governing an individual or a profession" and "standards of behaviours" (Carroll, & Gannon 1997). Ethical means conforming to the standards of a given profession or group, (any group can set its own ethical standards and then live by them or not). Ethical standards, whether they are established by an individual, a corporation, a profession, or a nation, help to guide a person’s decisions and actions (Carroll, & Gannon 1997). International business ethics did not emerge until the late 1990s; many new practical issues arose out of the international context of business. Issues such as cultural relativity of ethical values receive more emphasis in this field. Other issues and subfields include; •
“Comparison of business ethical traditions in different countries. •
Comparison of business ethical traditions from various religious perspectives. •
Ethical issues arising out of...
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