Explain the ethical issues a business needs to consider in its operational activities In this assignment I will be looking at how a business needs to consider ethical issues that may arise in their operational activities. The business have chosen to look at will be Lush. Lush originally opened in 1995 in Poole, Dorset by Mark and Mo Constantine. There are over 800 stores and they sell a variety of cosmetics and bath soaps. Lush are predominately known for their anti-animal testing and the organic products they use.
Operational activities A business’s operational activities are what the business actually does. Lull’s operational activities would be the manufacturing or production of cosmetics and bath soaps. Some of Lull’s most popular products include their bath bombs and moisturizer. Business ethics This is where an organization works to achieve corporate aims. Issues connected to ethics in business arise because some businesses make poor decisions. These can hurt local people, staff or the business’s customers.
Business ethics is the application of ethical values to business behavior. It applies to any and all aspects of business conduct – from boardroom traceries and how companies treat their suppliers to sales techniques and accounting practices. Ethics are not obligatory, but a matter of choice for the business. Business ethics applies both to the conduct of individuals and the organization as a whole. It’s about how an organization does its business and how its activities affects all of its stakeholders. Lush are a company with very globally accepted ethics.
Despite founders Mo and Mark Constantine saying they are not an ethical company, and believing that all business should trade fairly and be ethical, they have a number of policies in place that another session on a variety of topics. They describe themselves as a business that strives to meet the expectations of their stakeholders as well as the needs of the planet. Corporate social responsibility (CARS) CARS refers to what the business does to contribute to the wider world. It is when an organization establishes policies in regards to their behavior and beliefs and also its relationship with their stakeholders.
Lush have a variety of policies set in place which shows how ethical they are as a business. One of Lull’s most successful endeavourer to help contribute to the wider world is inked to one of the newest products, Charity Pot. Any money earned is donated to a variety of projects to help the wider world and the people in it. (Lush) Environment This can be emissions coming from airlines, cars etc. These are believed to have a bad effect on the Earth’s atmosphere, leading to global warming which affects us all. Global warming has led to habitats being destroyed and the ice caps melting.
UK businesses must comply with a range of legislative regulations such as those relating to health and safety, employment, planning and environment and pollution. Lush promote themselves for using 90% cycled packaging for their products. They also strive to use organic ingredients which means that their products only have a 12 month long shelf life which differ greatly to other cosmetic business’s products which can last up to 36 months. Lush also hire people to product their products by hand rather than machine which can be more environmentally friendly of them. Lush) Sustain inability The evidence is strong that our planet cannot sustain (keep up) for too long increasing levels of industrial development, particularly development that uses carbon dioxide-producing technology. As mentioned above Lush hand make their product to red Lice the CA emissions they produce. They use little machinery to make their products and they also use 100% vegetarian and organic ingredients and use very little preservatives in their products. Human Rights This is where a business looks at their actions and decide if they are good or bad.
Some human rights revolve around discrimination e. G. In the UK it’s illegal to treat people differently on the basis of race, gender, religion, sexual orientation or disability. These are basic human rights. Other human rights re also built into Our legal system. Employees are entitled to a contract Of employment, to work part time, to be able to join a union and to have a hearing against wrongful dismissal. Lush have recently released a new product called the Charity Pot where all the money spent on the product (excluding VAT) is donated to a variety of charities across the I-J.
They have contributed to groups such as the Stop & Search Legal Project which aims to educate people on the rights they have when being stopped and searched in areas such as London, and also they have contributed to the Fasten Peace Camp which encourages people to oppose weapons of mass destruction. Corruption This can be a major concern for the public. It can arise in many forms. A person or a business corporation is ‘corrupt’ if they use influence or unfair means to gain business or personal advantage. Competition should be based on price, quality, and the ability to do the job and so on.
However, sometimes business get contracts for jobs such as construction as they know someone who will give them an unfair advantage over their competitors. Lush is a family run business who is very fair when it comes to trading and buying from appliers. They also contribute to exceeding the expectations of an employer and granting their staff ‘wishes’ to make them a happier workforce. This was seen in the TV show ‘Peter Jones meets: Mark and Mo Constantine and Chris Jones’. They use their own money to pay for their staffs wishes and the founder also take an active role in the production and marketing process.
Trading fairly Fair trade is where: Business is carried on in an open manner Competition takes place on grounds that are equal for all parties Consumers can feel secure that the goods and services they are buying are going to be of distractions quality. Trading fairly also means abiding by consumer law. Consumer law is when a consumer makes a decision to buy something and there’s an element of trust and of risk involved. An unethical trader could potentially give a false description of something or overcharge for a product. Businesses are therefore subject to the law.
It’s illegal to give a false description of something, or to mislead consumers. This body of the law is known as ‘consumer protection’ law. Consumers have rights and businesses must respect these. These Acts include – The Consumer Protection Act 1 987 The sale of Goods Act 1979 The Trade Description Act 1968. A study undertaken by the Institute of British Ethics showed clearly that in the years 1997-2001, those with an explicit commitment to doing business ethically produced profit/turnover ratios that were 18% higher than those without a similar commitment.
The conclusion was made that businesses that had set up their own codes of ethics were adding significant value to their business. Lush pride themselves on their ethical buying from suppliers with good morals and who provide their workers with a safe environment, free from any threat violence. Also, Lush have supported and help back new sustainable projects, some of which grow organic ingredients for Lush. They also offer financial support to less economically developed countries via the SLush fund. Lush) Employee protection The government has taken steps to ensure that employees are protected, known as employment law. Businesses are required by law to treat employees fairly and without discrimination. The Sex Discrimination Act (1975), the Equal Pay Act (1970) and the Employment Protection Act (1975) all place businesses under an obligation to deal with staff in a fair and open way. Employees are also offered protection under health and safety laws and regulations. Employers have a duty of care to monitor the health and Safes of their staff.
This is to ensure that they don’t carry out jobs that have too much risk or danger. As mentioned above, Lush only purchase from ethical suppliers who protect their employees in their place of work and they also use the SLush fund to enable farmers to trade fairly and independently within the community. Stakeholders influence and pressure groups Many businesses cause damage to the planet. The stakeholders in this issue are the entire population. Environmental issues are the focus of several well- known pressure groups such as Greenback. These groups are formed not elected by anyone.
They are formed to raise awareness of an issue, or several issues. Lush work with and support a variety of pressure groups including the Blue Fox Group who organism anti-hunting events and also the Freak Free Dee who are active campaigners against the unconventional extraction of gases. (Lush) Bibliography Lush. (n. D. ). Lush Charity Pot. Retrieved 03 26, 201 5, from Lush Cosmetics: HTTPS://www. Lush. Co. UK/article/bit-about-our-charity-pot Lush. (n. D. . Lush Ethical Policy. Retrieved 03 26, 201 5, from Lush Cosmetics: HTTPS:// www. Lush. Co. UK/article/ethical-buying-policy Lush. N. D. ). Lush Freak Free . Retrieved 03 26, 201 5, from Lush Cosmetics: HTTPS://www. Lush. Co. UK/article/ freak-free-south-Yorkshire Lush. (n. D. ). Lush Naked Packaging. Retrieved 03 26, 201 5, from Lush Cosmetics: HTTPS://I. Www. Lush. Co. UK/content/naked- packaging MI – Assess how a selected business could improve the ethics of their operations. In this assignment I will look at what areas Lush could improve on in regards to the ethics of their operations. As lush are relatively ethical already there will be very few improvements that I will suggest. 00% recycled packaging As Lush use 90% recycled packaging I feel that they could improve on this by using 100% recycled packaging. Lush have already started to introduce the reusing of packaging, however they could be more environmentally friendly by recycling all of their packaging and if It is not 1 00%, then making them considering introducing packaging that is. This benefits Lush as it can be more cost effective. Also, using recycled packaging gives the company a good petition with the customers who are interested in being environmentally friendly.
Vegan products Lush pride themselves on providing vegetarian friendly products, however I feel that they could appeal to a wider consumer audience by introducing products that are vegan friendly. Paganism is becoming more and more popular in modern society as people are becoming more aware of the circumstances surrounding the collection meat and animal products. Appealing to vegans will benefit Lush as they will most likely be one of the only cosmetic businesses who do. For example they use a lot of organic reduces in their cosmetics; they could create more fruit and vegetables in their products.
Paganism is becoming more popular and it may be beneficial both financially and reputation wise for the business. However, a drawback to doing this could be the cost when looking for vegan friendly safe synthetics to use in their products. Supporting charities outside the I-J As Lush support a variety of charities in the UK, I feel that they could improve on this by supporting charities outside the UK such as the Doctors Without Borders project or Africa who are currently battling the Bola outbreak in West Africa.
This could show their customers that they care about the wider world and want to help the more recent crises. Solar panels to power machinery Lush hire staff to hand make their products, however they do use some machinery to mix and dispense their products. Lush could be more environmentally friendly by investing in solar panels for their factors to sustainability power their machinery. This could benefit Lush financially as it is renewable energy and will allow them to power their machinery and electrical items without them harming the environment.
Solar powers are a Eng-term beneficial investment for Lush and being greener will also build their reputation and justify their support for the variety of organizations they help. However, a drawback to doing this could be the cost for solar panels as they are expensive and Lush will have to decide whether or not they will only use solar panels in their factories or in their stores as well. Also the disruption it may cause to the factory could prevent their staff working efficiently. Lush may have to go to the local council and undertake a lot of research to see if they need planning permission which could be time consuming and disruptive.