Tesco Company Business Ethics: Deontology and Teleology

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Table of Contents

Introduction
Deontology and Ethics
Teleological theory approach
Comparing and contrast absolute and relative ethics
Conclusion
References

Introduction

Decisions made by organizations have an effect on the environment the organization operates in; according to action-based theories of morality, an action is considered ethical or unethical after considering its outcomes. Deontological, teleological, and virtue ethics are three classifications of normative ethical theories where actions are judged morally right or wrong based on their consequences; generally, normative ethical systems assume that morally right actions should conform to some ethical standings.

When organizations are following deontological and teleological theories of morality, their focus is on what they should do and the outcomes of the decisions made. Tesco is an international retail outlet with large discount stores and warehouses in different towns in the United Kingdom; the nature of the company’s business calls for adherence to high moral actions (Crane, Matten, and Spence, 2008). This paper discusses the deontological and teleological theories with reference to philosophical antecedents using Tesco as a case study company.

Deontology and Ethics

When Tesco is making decisions on the kind of products to stock and the companies to procure products and services from, it considers the moral position of stocking such commodities. In the event that the commodities will harm customers, the company finds it morally right not to have the goods in-store. In the current globalizing world, there are high chances of getting substandard goods sold at relatively lower prices; such substandard goods are likely to have a high-profit margin to the company. However, it is the policy of the company to consider the effect that the product will have on the people or customers rather than considering the financial gain that the company will derive from such a transaction (Jones, Parker and Bos, 2005).

In 1997, when Terry Leahy took the overall leadership of the chain of stores he made the slogan “The Tesco Way,” to be used when marketing the company’s goods, the slogan was aimed at creating the framework of operation where the company aims at following its independent moral rules or duties. Some of the independent moral rules that the company has enacted include ensuring that the prices set for the commodities are competitive and portrays value for money.

When it comes to the greengrocery, the company is sensitive to offer fresh produce, and those are produced in a way that cannot harm their customers. For example, when shopping for grocery, the company has banners that indicate whether the products that are displayed are either nationally produce or is genetically produced foods. Such moves assist the buyer make a rational decision on whether to buy a certain product (Moon, 2001).

Tesco has moral duties and responsibilities towards its customer’s people and the environments it operates in; it is the policy of the company to assist when disasters occur and have a robust and active corporate social responsibility team. In 2006, the company had an expense of 1.87% of its pre-tax profits to charities/local community organizations; the moves has been one of the highest in the United Kingdom triggered by the need to conduct their businesses morally and with high ethical standards (Garriga and Melé, 2004).

Teleological theory approach

When making decisions, the company considers the effect that any action from a decision is likely to have on the people, environment, and stakeholders; the company wishes to make outright decisions that will not harm the people or the environment. When conducting its business, the company’s public relations office ensures that it gives some of the returns to the people for their benefit; for instance, in 1992, the company started the “computers for schools scheme” with the aim of improving the literacy level of the communities. Such moves are seen to have been made after considering the net effect that the company will have with the trading it maintains with the people of the area it operates. Other than the programs, the company benefits from the good relations that they create with the people (Foote, Gaffney and Evans, 2010)

In the move to promote peace among people living together, the company in 2005–06 football seasons sponsored the Tesco Cup that brought people of different races, groupings, and nationality to play in the league; this was seen as a measure of improving goodwill among people. When making purchases of stocks it is the company’s policy to ensure that it procures from companies that have a track record of quality products that do not harm consumers, the management believes that when goods are of high quality, then the company will be able to compete effectively in both domestic and international markets. To ensure that the quality of products has been maintained, then the company has a quality assurance department that is mandated with the task of vetting every product that gets into the system (Rasmussen, 2005).

Tesco is one of the few world retail chains that have been able to attain full compliance with green supply chain management. The systems extend from the commodities that the company procures, how the company deals with waste materials, and the internal processes that operate within the organization. The systems of the teleological theory approach are basically framed on the notion that what is wrong or right in a certain situation depends on the outcomes that are likely to be derived from the actions (Carroll and Buchholz, 2003).

Comparing and contrast absolute and relative ethics

As human beings live and socialize, they are faced with situations that they have to decide the kind of action to take for their own good and the good of the society; an absolute ethical model assumes there are some universal accepted sets of standards that must be adhered to when making decisions. An action will then be considered as ethically acceptable if the action rhythms with acceptable results. In the case of Tesco, when employing human capital, its human resources policy establishes that people need to be respected, and their international human rights and freedom respected. Other than adhering to international standards, the company ensures that it abides with the host country’s policies (Cornelius, Todres, Janjuha-Jivraj, Woods, and Wallace, 2008).

When making a decision on the location to make a mall, the management considers the effects, both negative and positive, that its existence in the said area will have. For example, the public relations department works closely with the engineering teams to ensure that waste disposal is environmentally friendly, and its effect on the environment is any should be as minimal as possible.

According to absolute moral, ethical codes, the world has some standards and measures that remain unchanged despite the prevailing condition; to act ethically, a company should thus ensure it has policies that do not confront the universal standards. Decisions and actions undertaken by an organization are expected to adhere to the contextual ethical code if they have to be accepted as moral and ethical (Baron, 2000).

According to relative ethics, people determine whether a situation is wrong or right after considering the situation that the decision will be made; different circumstances, different people, and different industries have their own way of interpolating situations thus what is ethical boils down to what a corporate body, individual or a community believes is morally correct. For example, Tesco feels that it needs to make some minimal profit margins on its products as this would enhance the affordability of the products and probably improve customers living conditions.

On the same issue, some companies feel they better sell their products expensively to have a quick gain in the form of profits, and then they can plow the profits back to the communities through their corporate social responsibility policies. Coming to think of the two stand-points, both might have the same end results as they are likely to improve people’s lives; however, the approach varies and depends on the company undertaking the action. When confronted with a challenging situation Tesco realizes that the final decision it makes will have an impact on its productivity and outcome, with the notion then the company always ensures that decisions are made to be the benefit of the clients and probably if they have a benefit to get then it should follow suit.

An ethically conducted business is likely to enjoy some benefits for its efforts; the benefits internally start where employees, who are respected by their employer, produce more effectively and highly than those who are not respected. An organisation thus gains high efficiency and effectiveness in its processes. From the external angle, the business develops good relations with its customers. When there are good relations, there is customer loyalty; the loyalty of the customer is a strong marketing and competitive advantage tool, which leads to increased business (Albrecht, Thompson, Hoopes and Rodrigo, 2010).

Conclusion

Business ethics refers to business strategies that facilitate the enactment of policies that support doing business in a socially, economically, and politically acceptable manner. It aims at developing good internal and external relations; Tesco has ensured that its business strategies are ethically and morally acceptable. Theories that define business ethics include norm theory, utilitarian theory, and consequential theory. Ethically conducted business benefit from increased competitiveness and customer loyalty; for a business to have ethics in its production, it should start by developing a code of conduct to be adhered by all personnel’s in the organization; training employees on ethical codes of conducts and reviewing the ethical codes with time.

References

Albrecht, C., Thompson, J., Hoopes, J. and Rodrigo, P. ,2010. Business Ethics Journal Rankings as Perceived by Business Ethics Scholars. Journal of Business Ethics, 95(2), pp. 227-237.

Baron, D.,2000. Business and its environment. Upper Saddle River: Prentice Hall.

Carroll, A. B. and Buchholz, A. K., 2003 Business and Society: Ethics and Stakeholder Management. Mason, OH: Thompson South-Western.

Crane, A., Matten, D. and Spence, L.,2008. Corporate social responsibility. London: Routledge.

Cornelius, N., Todres, M., Janjuha-Jivraj, S., Woods, A. and Wallace, J. ,2008. Corporate Social Responsibility and the Social Enterprise. Journal of Business Ethics, 81(2), pp.355-370.

Foote, J., Gaffney, N. and Evans, J. ,2010. Corporate social responsibility: Implications for performance excellence. Total Quality Management & Business Excellence, 21(8), pp.799-812.

Garriga, E. and Melé, D., 2004. Corporate Social Responsibility Theories: Mapping the Territory. Journal of Business Ethics, 53(1/2), pp. 51-71.

Jones, C., Parker, M. and Bos, R., 2005. For Business Ethics : A Critical Text. London: Routledge.

Moon, C. Et al.,2001. Business Ethics. London: The Economist.

Rasmussen, L.,2005. Ethics expertise: history, contemporary perspectives, and applications. Netherlands: Springer.

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