The Scope of Business and Ethical Issues - General Motors, Wal-Mart, Coca-Cola - Coursework Example

TITLE by Name of author Name of class Name of Professor Name of school Location of school Date The concept of business can be explained as a business opportunity fully augmented with a comprehensive description of the business’ target market, target market estimated size, major benefits derived from the products and services by the business and potential customers and a complete account of how a well developed business concept will generate proceeds (Trehan and Trehan 2007). The concept of business thus makes business a very vital activity for man as it involves economic activities with the sole aim of earning profits for the fulfillment of human wants. It also involves constant production of goods and services, their distribution and exchange of the same as well (Trehan and Trehan 2007). Basically, business activities are carried out with the aim of earning returns by satisfying customer wants and needs. Concept of business can take two forms: traditional concepts and modern concepts (Trehan and Trehan 2007). Traditional concept of business demonstrates that the main idea behind business existence is to earn profits by producing and effectively and successfully marketing its products which may include goods, services or ideas. On the other hand, modern concept of business demonstrates that business is more consumer oriented than profit oriented (Trehan and Trehan 2007). Under this concept, businesses have made consumer satisfaction the basis of their operations because a satisfied customer will refer other new customers to the business, consequently ensuring the business makes profits. The idea of social responsibility is also emphasized under this concept with the view that today’s business is more of a socio-economic entity and has to be responsible to the society (Trehan and Trehan 2007). General Motors is a global brand and has been in the business of vehicle production for so many years. The auto-motive industry is ever changing with competition heating up every other day as manufacturers try to keep up with the customer demands. A cross-functional from General Motors, GM Global Trends Network group, from around the world meets regularly so as to understand and discuss emerging trends in the auto-motive industry and the impacts these trends will have to the company; this team is led by Rick Holman. The group focuses mainly on the company’s future in the industry together with the world it serves. With the long term future of the company in mind, the GM Global Trends Network group sets up research priorities on the development of future products ideas. The company has been working on driverless cars based on its research on Urban Mobility and Aging drivers. Wal-Mart has been a success for so many years and experts have attributed this success to its business concept. The stores concept is anchored in customer service, partnerships and community involvement (Anderson 2010). One of Wal-Mart’s main drives is ensuring that customers get value for the dollar every time they visit the store. Wal-Mart achieves this by making deals with suppliers and by buying from them in bulk thus saving a lot. This enables the store to sell to consumers at lower prices while at the same time increasing sales volume and making a profit (Anderson 2010). The store also opens its doors every other day the whole year which customers find very convenient. The store also has employed an employee associate at each of its stores who greets customers as they go into the store and this makes them feel really welcomed. Technology is also a big part of Wal-Mart’s operations and has helped it increase its profit margin. The company, for instance, employees a distinctive cross-docking inventory system that ensures pilferage is reduced (Anderson 2010). This concept has set it apart from its competitors. British Gas is UK’s leader in energy supply with its home base standing at around 12 million. The company has ensured that its relationship with consumers is deepened through giving value for money services, exceptional services and innovation. Service excellence is evidently very important to British Gas it makes the core of all offers it offers its customers (British Gas 2014). This can be explained by the large number of homes and businesses it supplies gas to. The company has also entered into partnerships with Nectar and Sainsburry to help it achieve its innovation strategy thereby keeping up with the competitive energy industry. Through its innovations, customers are able to do almost everything online like submitting metre readings, make service bookings, as well as make payments (British Gas 2014). Apart from supplying energy, British Gas has diversified its operations to offering a wide range of products such as boiler installation and related insurance covers for damages and repairs. Furthermore, the company entered into an agreement with its engineers to the effect that they could respond to appointments during evenings and weekends as well. With this flexibility, the company can now make visits to its customers as and when the customer reports a fault (British Gas 2014). The Coca Cola Company is a global leader in the manufacture, marketing and distribution of non-alcoholic beverages (Bhasin 2012). Operating in more than 200 countries, the company faces a huge task of providing quality beverage, strengthening the community, enriching the workplace and protecting the environment. However, its business concept makes this herculean task appear easy (Bhasin 2012). Competition for coca-cola is very low considering that the only competitor in the soft drink market is Pepsi. The company has thus taken advantage of this and has over the years continued to offer a wide range of products thus giving customers with a several choices to make at affordable prices (Bhasin 2012). The wide range of quality products which can be bought at low prices has ensured that the company satisfies customer demands while at the same time making profits. Coca-cola has also gone ahead to differentiate its products so that it caters for the different demographics of its customer base (Bhasin 2012). Differentiation has enabled Coca-Cola to retain its customers and even attract new ones because differentiation makes it hard for customer to switch to other competitive products. Understanding business is important if business want to maximize profits while satisfying customers wants and needs (Kern 2005). This understanding allows us to honor values that we develop and plan to work by. It is important to note that people are not driven by values alone but by the outcome of business. I believe my understanding of business will enable me to make decisions more likely to favour the business in general and not myself or a particular staff member (Kern 2005). This understanding will also enable me to have a clear picture of where to steer the business and provide the very important checklist to check if my actions are in tandem with the goals and objectives of the business (Kern 2005). I will be able to put in more effort in the business operations since understanding business will make it more meaningful and I will own the bigger picture, unlike the vision and mission statements which are typically ‘property’ of a company. The Coca-Cola Company operates under the free-market capitalism economic system. This is because production under this economic system is privately owned by individuals and not by the government (Doyle 2005). Coca-cola Company also makes decisions on what type of product to produce, when to produce it and what price to give it. The company is also able o compete freely within the industry without any sort of government interference or external forces (Doyle 2005). A third reason why I think coca-cola operates under the free-market capitalist economic system is that the prices of its products are dictated the number of products there are in the market and how many customers want them; this is the demand and supply chain (Doyle 2005). If the supply of coca-cola products is higher than the number of people ready to consume them then prices drop until this supply runs out. At this point, the prices will start going up since the demand for its products will be higher than its supply. This demand and supply cycle tends to control the prices of products and this is evident from the fact that coca-cola products are always neither too high nor too low. In 2003, there were complaints from an Indian community in Kerala who were living near a Coca-Cola bottling plant in that region (Bremmer and Lakshman 2006). Their complaint was on water scarcity coupled with polluted water resulting from operations of the bottling plant. These allegations led to the plant being closed and the company was banned from Kerala due to its supposedly unethical business practice (Bremmer and Lakshman 2006). This incident captured the attention of the Centre for Science and Environment an environmental NGO based in Delhi who released a report with facts that, I more than a dozen products sold under Coca-Cola and PepsiCo brands, had traces of pesticides that exceeded European standards. There were protests from all over the country when this report came out and Coca-Cola denied these allegations saying that its products were safe for human consumption (Bremmer and Lakshman 2006). The company was placed under probation by the University of Michigan and an independent assessment by The Energy and Resources Institute was initiated (TERI). The results from TERI declared coca-cola products safe for consumption but CSE disputed this and claimed that only the water was tested and not the other ingredients that go into the soft drinks (Bremmer and Lakshman 2006). After this incident the Coca-Cola Company thought long and hard about its corporate social responsibility and the huge losses in sales; Coca-Cola and PepsiCo command 90% of India’s soft drink market (Mahajan 2009). The company thus cut its water usage by a massive 34% and employed rainwater harvesting practices to return substantial amounts of water back to the aquifers (Mahajan 2009). The company has also ensured that the water used is goes through carbon filtration for treating and purified to make sure that the water is pesticide free. Coca-cola has gone further to partner with NGOs and the Indian government to offer medical access to the underprivileged people by helping organize regular health check camps (Mahajan 2009). In my opinion, I do not entirely agree with how Coca-Cola Company reacted to the allegation. By out rightly denying the allegations, the company came out as being more defensive which is not what a company should be portrayed like considering the huge market it commands. If I had been involved in the management of Coca-Cola, I would politely make the community understand the company’s policy as regards health issues while at the same time calling for an assessment from a globally recognized lab and not wait to be put on probation for this assessment to start. The stakeholders in the above case included the community living near the plant, the company’s customers, the Indian government and the plants workers. The community around the plant suffered from the scarcity of water as the bottling plant was using a lot of it in its operations. Once the company was closed and banned from Kerala state, customers loyal to the brand could not enjoy their favorite beverage for quite a long time. The government, the other stakeholder, did collect tax from coca-cola and this tax helped them in their economy. Once, the plant was closed, the government could no longer collect this tax and had to look for other sources to replace this revenue source. Workers working in the plant made up the internal stakeholders and they did bear the full brunt of the plant’s closure as they could not get salaries during the period within which the plant was closed. When running a business, adequate consideration should be given to a number of ethical issues not related to the profit making scope (Tricker and Tricker 2014). One parameter that an organisation should consider is employee equality within the workplace. Issues like gender discrimination, employee harassment, and poor working conditions should be a major concern for an organisation as it would impact greatly on the overall performance of the organization. Well motivated, driven and taken care of employees will give their all for the organisation and make it successful (Luetge, Koslowski and Homann 2013). Violation of the rights of workers mostly makes up the ethical issues under this parameter. Another parameter is in the organisation’s quality of products. This starts from its practice of raw materials sourcing, quality of production inputs and their safety to deceptions in packaging of the finished products, their quantity as well as size (Carroll 2013). The organisation must make sure that the product meets quality standards so that customers get value for their money. This parameter dictates the level of trust that an organisation will receive from its customers and potential future customers (Jennings 2011). Lastly, health is also another ethical parameter that should not go uncheck in any organisation. Revealing the truthful information as to what goes into the products, on the product’s package, during production is vital if the products are for human consumption (Crane and Matten 2010). References Trehan, M., and Trehan., R (2007). Government and Business. New Delhi: FK Publications. General Motors (2013).Emerging Technology: Driving Safety, Efficiency and Independence. Available at http://www.gm.com/vision/design_technology/emerging_technology.html (Accessed 16 March, 2014) Anderson, G. (2010, September 22). Wal-Mart's Big Idea for Small Stores. Available at http://www.forbes.com/2010/09/22/wal-mart-stores-smaller-markets-retailwire-consumer.html (Accessed 16 March 2014) British Gas. (2014). British Gas Business. Available at http://www.britishgas.co.uk/business/ (Accessed on 16 March 2014) Bhasin, H. (2012). The Marketing Concept. Available at http://www.marketing 91.com/marketing-concept. (Accessed 15 March, 2014) Kern, H. (2005, April 20). The Importance of Understanding the Business's Big Picture. Available at http://www.techrepublic.com/article/the-importance-of-understanding-the-businesss-big-picture/#. (Accessed 16 March, 2014) Doyle, E. (2005). The Economic System. New York: John Wiley and Sons Jennings, M. (2011). Business Ethics: Case Studies and Selected Readings. London: Cengage Learning. Carroll, A. (2013). Business Ethics: Brief Readings on Vital Topics. London: Routledge. Bremmer, B., and Lakshman, N. (2006). India: Pesticide Claims Shake Up Coke and Pepsi. BloomergBusinessweek, August 9. Available at http://www.businessweek.com/stories/2006-08-09/india-pesticide-claims-shake-up-coke-and-pepsi.(14 March, 2014) Mahajan, A. (2009). ‘Ethical Issues Concerning Coca-Cola in India’, The Corporation, 18 August. Available at http://imaginecorporation.blogspot.com/2009/08/ethical-issues-concerning-coca-cola-in.html (Accessed 16 March 2014) Luetge, C., Koslowski, P., and Homann, K. (Ed.). (2013). Globalisation and Business Ethics. Aldershot: Ashgate Publishing. Tricker, B., and Tricker, G. (2014). Business Ethics: A Stakeholder, Governance and Risk Management. London: Routledge. Crane, A., and Matten, D. (2010). Business Ethics: Managing Corporate Citizenship and Sustainability, 3rd ed. Oxford: Oxford University Press. Ferrell, O., and Ferrell, J. (2014). Business Ethics: Ethical Decision Making and Cases. New York: Cengage Learning. Read More