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Business ethics refers to the study of appropriate policies as well as practices of business. These policies are related to issues of potential controversies like discrimination, corporate governance, fiduciary responsibility, social responsibility and bribery (Bonnefon, Shariff, and Rahwan, 2016). These policies help a business entity in operating their business activities in a ethical manner. This report is based on case study of Nike company regarding creative advertisement. They used an advertisement technique which was misunderstood by public. Moreover two ethical theories are being used under this assignment to judge ethics in a sated case study . Characteristics for being an ethical manager are also been discussed so that ethical standards of an organisation can be increased and ethical working environment can be maintained.
In recent era, the main motive of an organisation is to generate revenue and to hold a highest rank within a market place. But in order to attain these certain goals may not seem to be ethical at all costs. So it is required by a business to implement business ethics in order to performs their operations and activities in an ethical manner. In case an organisation fails to do this, then it will lead to decrease in base of customers as well as company will have a negative brand image (Crane and Matten, 2016). Main aim of this report is in regards with Nike which is being a clothing industry and face issue related to creative advertisement.
Under this they targeted youngsters for selling balaclava but it critics as stereotypes of black youths which are involved in gang violence. Whereas, company states that they had no intention of encouraging a serious issue related to gang culture and criminal.
Under this case it was found that a young black model was wearing a T-shirt and a garment which was same as military special forces webbing. This was appearing as if youngsters are concentrating of inspired look as a gang and this was being popularised by videos of drill music. Later on Nike had to stop their selling of balaclava from its website and displayed that this product is no longer available for sell.
This report is written from middle manager to senior manager in Nike with an aim to highlight the unethical practices adopted by marketing department in company. This report discusses the ethical dilemma “should marketing unit engage in making such advertisement which encourages youngsters to indulge in criminal activities?”. The consideration of this dilemma holds significance as this would ensure that entity does not make any advertisements or adopt practices that are against public interest.
Also, emphasizing upon this situation is necessary to make sure that there is no violation of interest as well as power of stakeholders of organisation. The major objective behind this is to reflect the implications of such misinterpreted advertisement upon the millenials that are a significant part of the society so that such unethical actions and practices can be prevented in future context.
A stake holder refers to a person who has an interest or concern in business (DeKeyser, Ganz and Berkovitz, 2012). Hence, Nike sees its external as well as internal environment in form of their stake holders. It simply means that any person who have an impact on activities of business can be called its stake holders. But each stakeholder will have a different role to play in the process of Nike company.
Stake holders of Nike company who are affected by this are customers, employees, ,business partners and their shareholders. Shareholders as well partners always wanted Nike to earn profits. While employees would require to have a sense of work satisfaction and treated fairly. On the other hand customers concentrates mainly on quality, safety and availability of a product and service for which they spend money for.
Moreover, other comprises of local communities as well as government who involves a special kind of interest in groups. As per Friedman theory, stakeholders play a crucial role in business, as their decisions affect performance. They can be affected through organisational policies, actions and decisions or ethical dilemma.
For better understanding the requirement of communication with stakeholders in making decisions and strategies, interest/influence matrix can be used. Here, “Interest” focus on terms related to change, while, “influence” indicates the ability for resistance and stimulates the same as well. This matrix help in resolving issues related to loss of trust and belief of stakeholders, investment, long term relationship with clients and more.
This issue of Nike has affected some shareholders of Nike particularly as customers will feel betrayed by their unethical practices whereas shareholders share will decrease as company will have a negative brand image due to which it decreases its earning in profits. Local communities will be affected as they will get a wrong image from this advertisement.
There are many other companies who also faced same issue of misconception of advertisement by public (Dion, 2012). It includes companies like Marlboro, coco-cola and bonus, therefore, to pay a special attention while developing promotional strategies. They should decide and see from every perceptive view point of advertisement in regards to different viewers so that their message is conveyed in a right manner and properly. Ethics of duty in this regard, is important for performing roles and duties for entire organisations and individuals.
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This leads to conduct business in ethical manner by governing rules and regulations to each associated member. But there are negative impacts of such ethical question related to business operational as well as entire functioning, that can be found. It includes intentional or unintentional advertisement procedure for marketing products.
Corporate Social Responsibilities means companies core business activities. Main aim of an organisation to inculcate CSR activities is manage practices of business in order to create impact on overall society in a positive manner. It involves various others factors also which are developing adequate relationship with customers and its employees, environmental sustainability as well as protection and many more (Eisenbeiss, 2012). This would help a company to earn profit and increase productivity.
That is the main reason as CSR activities are treated as an important method for giving and increasing competitive advantage, create trust between stakeholders etc. Here in regards to Nike, CSR activities are playing an important role for increasing their business and creating a positive brand image among public. CSR activities of Nike are mentioned below.
- Company does a commitment to reduce carbon footprint.
- It bring innovation in their manufacturing.
- Keeps voice of human at heart of all its activities which starts from manufacturing and ends to marketing of products and services.
- Developing innovative and new palette of materials which are sustainable.
- Launching innovations in products which have close loops.
- Whereas for welfare of employees they are creating a culture and inclusive staff members which will help in increasing impact and efficiency.
- Motivating and investing employees to do investment in communities and market place where Nike does its operations.
According to above mention report, it can be recommended to Nike that it should be careful about message they are conveying through advertisement to people. Advertisement experts team must be develop or formed so that they can give various suggestions and ideas about advertisements strategies. Also the Nike company should make advertisements focusing the entire society and not just a few customers.
This will create a brand image among public and the message which they want to convey through their ads will effective. They should utilise CSR activities in an ethical way so that they are not being misconception about their ads to public who are not being targeted.
While they can also develop policies and procedures which will help them to increase productivity and profits of a company. It has also recommended to Nike to operate their business activities in an ethical manner. It is also necessary for the chosen organisation to use efficient advertising methods that do not effect their brand image in a business market.
In addition to this, it is also essential to identify the market condition before advertising their particular products in a business market. They should also develop effective advertising policies to influence whole society not just few peoples.
For ascertaining the views on ethics of present case of Nike, senior managers have used two ethical theories. It includes Right & Justice and Egoism theory to give the most suitable solution. Concept of these theories can be explained in following manner:-
Right Justice Theory:
This theory is mainly based on adopting fair practice for conducting all sorts of business activities. This theory is mainly based on two principles : As per first principle every individual should have equal right to claim equal opportunities and liberties. Second principle states that every person should be loyal towards his office and position to achieve further benefits. In context to Nike, it has been analysed that chose a wrong advertisement to promote their brand.
This may lead to a major fall in their brand image. So it has been assessed that Nike should use fair practices and correct type of advertisement media to promote their brand. Also people should be fair in their conduct if they see any such advertisements.
They should not act rationally rather use fair ways of conveying their message. As per the case study, there is a fault from both sides whether it is Nike or the people who are making this an irrelevant issue. In this regard, it is essential for a business entity to operate its business activities in an ethical manner, which help them in retaining their brand image in a competitive business market. It is also essential for critics to understand both sides of the story before judging any issue.
Theory of egoism is a key theory which has been taken into consideration by managers of Nike. Theory of egoism infuses concept which says that people should live in such a way that they are able to make most of their skills and abilities without depending on any person. As per this theory, each and every individual is different from others and should focus on his skills and their development rather than being competitive from other individuals (Hassan, Wright, and Yukl, 2014).
In respect to this, every person should work towards his own development and goal achievement in short as well as long term. In case of Nike come under major fire for selling a product balaclava that depicts image of a youth involved in a gang violence.
Company removed that product from their sale. That product gives a negative impact and shows that full face covering and extended down to neck. Product that Nike purposely made to sell aim towards keep person warm in winter. It is basically a warm wearer. But some critics said that company marketing pictures depicts a young black youth model wearing a T-shirt and trouser holds a military special force that gives criminal affect of gang inspired look.
As per this theory, it is essential for every person to improve their skills and knowledge as per the specified task. This theory will help the chosen organisation in satisfying its short-term or long term desires. In this regard, it is important for the chosen organisation to operate its business operation ethically in a dynamic business environment.
Qualities which are needed for being an ethical leader or manager who can manage ethical issues of an organisation
To run a successful business one must have ethical leadership in their organisation. Ethical leadership is that form of leadership which is led by respect towards ethical beliefs as well as values and for rights and dignity of others (Lin, Abney and Bekey, 2014).
Therefore, it is linked with concepts like honesty, consideration, fairness, trust and charisma. Ethical leadership need leaders to be ethical. Ethical leaders are usually individuals who are people oriented and have understanding of ways their decisions have influenced others.
Thus they utilise their authority and power in order to serve greater good rather than serving self-interests. There is various characteristic which are required by ethical leaders. These characteristics are being mentioned below.
- Justice: A leader should be just and fair. Through this, I can be fair towards my employees and will not take bias decisions. By being just towards my followers will help me in increasing their dependency towards me and my decision. This will assist in ensuring that my subordinates are satisfied and happy with my leadership and consider me as an idol while carrying out their work. Also, this will create an atmosphere where there is no partiality towards anyone on any basis.
- Respect others: It is an important quality of ethical leader. Through this I can respect my followers by carefully listening to their ideas as well as grievances, appreciate their contributions and be polite to them. This will ensure that my subordinates develop a sense of belonging towards me and the team and work in a more effective and efficient manner so that organisational goals and objectives can be achieved in a timely manner. Further, this will reflect that they will abide by what I ask of them and work in a manner that is desirable and effective.
- Honesty:This skill is must in me because it will help to earn trust of my followers. They will also get committed to me as well as organisation. This helps in entailing an integrated and trustworthy team which follows the footprints of their leader and operate in a manner that is desirable to ensure timely realisation of goals and objectives of enterprise.
Here there are various conditions in which an organisation feel a need of ethical leader. To become an ethical leader I should make sure that organisation effectively carry ethical practices (Pearson, 2017). I also have responsibility of motivating and encouraging followers in order to do tasks, complete targets on time and behave in a manner which is required by an organisation.
Moreover I need to encourage processes, motivate in case of positive change and attitudes of followers and enlarge empowerment in their followers.
By possessing such qualities I can become an effective ethical which will also help me in protecting organisation against malpractices and fraud. It will also help me increasing productivity and profits of organisation.
Moreover by increasing my knowledge and skills related to ethics I can do my work in a proper and systematic way which will lead to efficiency in my work to achieve organisational goals and to direct my followers.
Whereas when I m not able to follow ethical process I can possess destructive leadership qualities which is a type of worst leaders. As it may lead to ineffective performance of my employees and can create conflicts among them. I may also pressurise decisions of my mangers and followers to produce good results for organisation.
In case of such situations I need to take some decisions which will help me to go against my opinion and create a harmonious within an organisation. Moreover this type of behaviour of mine will also affect my subordinates.
It will create an insecurity among followers related to their jobs and also demotivate them while achieving goals and objectives of organisation. I may also harass employees and this will lead to inefficiency of workers performance for achieving goals and objectives. This will also create confusion between me and my roles as well as responsibilities within a workplace.
In order to develop myself as a ethical leader I must give chances to individuals to interact with each other and discuss subjects which are related to values and ethics in order to make them analyse the ways their decisions can fit with an organisations adopted mission and values.
By giving any direction to my employees I should think of it advantages and disadvantages as well. I should understand various concepts and subject of ethics which will help me to become an ethical leaders so that I can be aware of what is right and wrong for me.
Through this I can reduce or resolves ethical issues within a workplace. There are certain skills which can be possessed that will help me to develop as an ethical leader within an organisation. These skills are being discussed below.
- Define organisational structure: Being a leader, I must give an example related to ethical leadership. Since each company sets some responsibilities and manner for employees, therefore in context to this I should give same information to followers as well as members of teams. It would be helpful in providing knowledge to workers regarding importance of ethical behaviour during working within an organisation.
- Know personal values: Ethical leaders are one who analyse personal values and follow them so that they can increase ethical standards.
- Effective communication skills: In order to encourage employees to achieve goals in a ethical manner it is necessary for a leader to inculcate effective communication skills. By the help of communication skills I can encourage my followers to work in a ethical way in order to achieve organisational goals and increase productivity.
From the above-mentioned report, it has been concluded that ethical practises will help a business entity in operating its business activities smoothly. Along with this, there are certain theories which will help an organisation in improving brand image in a competitive business environment. In addition to this, it is also important to identify market situation before promoting their products and services in a business market.
On the other hand, it is also important for people to see both sides of a story and do not create irrelevant issues. In this report, there are also some key ethical factors which should be undertaken by a business entity in order to operate their business activities ethically.
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