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The main goal of a business is profit. However, there is more to a company’s success than making as much money as possible. Important aspects of succeeding in the market are good reputation and customers’ trust. If a company does something that is considered unacceptable by the public, although it may not be illegal, it undermines its image, which can cause decreased sales and even a shutdown. This is the area of business ethics, which is about what is good and what is bad for a business to do. Ethics does not have universal rules or offer absolutely right decisions for every dilemma. But there are general principles for how to make ethical decisions. A way to explore these principles is to look at examples of alleged poor ethics from world-famous companies, such as McDonald’s, Nestle, Walmart, and Mattel.
For over seventy years of its history, McDonald’s has faced numerous lawsuits. It has been accused of exploiting child labor, selling unhealthy food, treating animals cruelly, destroying valuable natural resources, and promoting poverty in developing countries. All those cases are obviously regarded as ethical violations. One example from the 1970s shows several ethical violations at once. In 1972, the founder of McDonald’s Corporation, Ray Kroc, donated 250,000 USD to President Nixon’s reelection campaign, although previously he had never participated in electoral politics. The Nixon administration later supported a bill that allowed MacDonald’s to pay their sixteen-year-old and seventeen-year-old employees 20 percent less than the minimum wage at the time (Schlosser 37). The company was widely criticized for using influence peddling and for neglecting their employees, particularly minors. Generally, McDonald’s is notorious for alleged mistreatment of employees, which is considered highly unethical, and negatively affects the company’s image.
Another food giant, Nestle, also received massive criticism in the 1970s, but for different activities. The company was promoting formula milk products, but their marketing was described as “aggressive” (“A Generation On” par. 1). According to accusations, the effect was that many women in developing countries refused to breastfeed, which in turn caused increased infant mortality. One of the reasons was that mothers who could not afford formula gave only small amounts of it to their children, causing malnutrition. Another reason was that formula needs to be mixed with water, and access to clean water was problematic in many countries where this formula was sold. After these accusations, Nestle was boycotted by various groups and individuals. Ethically speaking, the company was blamed for the harm that its marketing caused in some countries. It is very important for a business to show that it cares about its customers, and not only about profit.
Walmart, a multinational retail corporation, also faced ethical accusations. As in the case of McDonald’s, many of these claims were associated with the mistreatment of employees. Walmart employs over two million people (Blodget par. 6), including one percent of the United States’ working population. However, employees constantly complain about Walmart’s unethical policies and practices. Numerous lawsuits from employees state that the corporation pays its workers inadequately, forces them to work overtime without benefits, dismisses them unlawfully, refuses to provide health insurance, allows poor working conditions, and opposes labor unions. However, these are not the main ethical accusations Walmart receives. The heaviest criticism comes from smaller businesses, for driving them out of the market. As a very large corporation, Walmart can afford to establish pricing that allows it to gain almost a monopoly in particular regions. The ethical concern here is that a business should exist in competition, and promote competition by offering better quality, thus securing development, its own, and that of the entire sector or market. The business strategy of minimizing competition is thus seen as unethical.
In 2007, Mattel, the world’s largest toy company, had to recall 19 million of its toys manufactured in China (Story and Barboza par. 3). The toys had been covered with toxic lead paint and were proven to be hazardous. About half of them had been distributed in the United States. Unlike Nestle, which was criticized for its allegedly harmful marketing, Mattel was blamed for the direct harm it caused to children and their parents. The choice of low-cost production and poor-quality products over the health and safety of customers is, of course, a major ethics violation. However, Mattel managed to partially recover its reputation by the recall. Sean McGowan, managing director and toy analyst at Wedbush Morgan Securities, said that the issue of hazardous components in toys was a daunting problem across companies and countries. He called the absence of massive recalls “a case of denial” (Story and Barboza par. 8). Nonetheless, there was wide public indignation against Mattel, emotionally intensified by the fact that children had been involved.
These four large multinational companies, McDonald’s, Nestle, Walmart, and Mattel, have been challenged with many accusations of unethical actions over decades of their histories. The main issues were improper treatment of workers, aggressive marketing, monopolistic practices, and hazardous products. These examples show that ethical behavior for a business is to prioritize its customers’ safety, as well as the quality of its employees’ working conditions. If a business prioritizes its profit instead, it is more inclined to act unethically, like jeopardizing the health of its customers. This is why business ethics is important. In order to make businesses follow it, the public should openly condemn any company’s unethical policies and practices.
References
A Generation On: Baby Milk Marketing Still Putting Children’s Lives at Risk, 2007. Web.
Blodget, Henry. “Walmart Employs 1% Of America. Should It Be Forced To Pay Its Employees More?” Business Insider. 2010. Web.
Schlosser, Eric. Fast Food Nation: The Dark Side of the All-American Meal. Houghton Mifflin Harcourt, 2012. Print
Story, Louise, and David Barboza. “Mattel Recalls 19 Million Toys Sent From China.” The New York Times. 2007. Web.
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