A Corporate Social Responsibility (CSR) Consultation

Global Ethics Director
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Global Ethics Director
In today's business environment, abiding by acceptable behaviors has become paramount for a company that wants to succeed long-term, especially in the international business environment. As revealed by Burritt et al. (2020), multinational companies (MNCs) have long been accused of unethical and unsustainable business practices that negatively impact communities and the environment. MNCs continue facing challenges in environmental standards, human rights, labor standards, and inclusion and diversity, among others. It has become important to adhere to an acceptable ethical framework in different business environments to address these issues, hence the need for global ethics. According to Burritt et al. (2020), MNCs operate in culturally, geographically, and institutionally distant environments, and there is a need for an ethical code to address the issues of sustainability and ethics that arise as a result of these differences. There is also a need to assign someone specific to manage issues related to ethics and sustainability in international business. This paper provides a criterion for a Global Ethics Director (GED) who will be responsible for managing sustainability and ethics at XYZ Company across the United States, Denmark, South Africa, New Zealand, and Brazil offices.
Background
Being a fast-fashion company, XYZ has faced several ethical and sustainability issues that continue to taint its global image and reputation. This section discusses the key issues, how they have affected XYZ, and what needs to resolve the situation.
Areas of Poor Performance in Ethics and Sustainability
XYZ has been performing poorly in three areas of ethics and sustainability. One area is concerned with labor practices in some of the factories that XYZ uses in its supply chain. It recently came to the public's attention that XYZ has been sourcing its fabrics from some factories in Brazil that are practicing modern slavery. According to the International Labor Organization (ILO) (2018), slavery, despite being illegal, is still common in Brazil and is characterized by debt bondage, forced labor, degrading working conditions, and exhaustive working hours. Many people, especially from poor backgrounds, are exploited in factories to make a living. The issue of slavery, especially forced labor, is common in the Brazilian clothing and textile industry because this industry is the second-largest source of jobs (Batista et al., 2021). This has made it easy for people to be exploited as they seek jobs in this industry for basic survival. XYZ never bothered to research or investigate the working conditions of workers in these factories, which has put it in a difficult position with the public.
Another issue that has come to the public's attention is XYZ's irresponsible sourcing of tree-based fabrics in South Africa. Rainforest Action Network (2018) reveals that many of the fashion products sold in the United States are made using tree-based fabrics from trees that have been cut from community-owned forests in countries such as South Africa and Indonesia. This has resulted in the destruction of forests and land grabbing in these countries. XYZ has been sourcing some of its tree-based fabrics from South Africa without really paying attention to the damage of tree-cutting activities in the area.
The last issue has been clothing wastes, especially from American consumers. The United States is XYZ's largest market, and most of the fashion products are created for this market. According to Bick et al. (2018), Americans are the highest consumers of clothing and textiles globally, and about 85% of their fashion products end up in landfills as waste, mostly in developing countries with low environmental standards. This has become an environmental issue because of pollution and the unsustainability of fashion products. XYZ has been aware of the problem, and despite its efforts to come up with a solution to address the clothing waste issue, it has failed and instead received the wrath of environmentalists.
Impact of Poor Performance in Ethics and Sustainability
These issues have given XYZ a tainted image as it has received backlash from the public on social media and beyond. Most recently, there were massive calls to boycott products from the company, and XYZ was trending on social media sites for weeks for all the wrong reasons. This has reduced sales volumes and, ultimately, revenues generated by XYZ. This can be attributed to lower purchase intention, which occurs due to negative publicity (Yu et al., 2018). Consumers have become more sensitive to how a company treats its workers and its practices along the supply chain, which affects their intentions to purchase from the company.
Resolving the Situation
To address these issues and strengthen its reputation, XYZ needs to change its approach to global ethics. Currently, the company approaches global ethics by practicing ethical relativism. Ethical relativism is an approach that involves considering the cultural norms and ethics of a given country as legitimate, and as such, the company does what is locally acceptable within the country, even if it would be frowned upon in other countries (Parboteeah & Cullen, 2018). For instance, due to the economic condition of people living in Brazil, poor labor conditions may not be frowned upon as much as they would in developed countries such as the United States. In Brazil, modern slavery may appear as an "acceptable" practice, especially because people keep going back to slave labor even after being rescued (ILO, 2018). Using ethical relativism, MNCs may not question how things are done and accept the status quo. However, Parboteeah and Cullen (2018) indicate that companies can use ethical relativism to justify their unethical practices and claim that everyone else in the specific country is doing it. For instance, since modern slavery is common in Brazil, XYZ can justify its action by saying that this practice appears to be acceptable in Brazil.
Yet, the company would continue experiencing negative press and publicity. To rectify this, XYZ will need to adopt the ethical universalism approach and employ a GED to help its five international offices navigate through ethics and sustainability issues. Ethical universalism involves applying the same ethical standards across geographical and cultural boundaries (Parboteeah & Cullen, 2018). The GED can help ensure that XYZ uses the same labor and environmental standards across the board. Below are the criteria for the GED position:
* Potential Role of the GED in the Company
The GED will be responsible for managing all issues related to sustainability and ethics within XYZ. As Guillory (2016) indicates, organizations need to develop ethical practices to guide ethical behavior within the organization. The potential key roles of the GED include:
1 Develop an ethical framework that guides XYZ's ethical practices and behavior on a global scale
According to Parboteeah and Cullen (2018), MNCs should have an ethical framework based on ethical universalism because they are responsible to all stakeholders. They should not engage in unethical practices that have negative consequences to stakeholders, even if those practices are acceptable in some of the countries they do business in. This means that they should avoid practices that harm the local environment, society, or employees, even if those practices are locally acceptable. Topor (2020) recommends aligning the ethical framework with international accords, such as the one developed by the Organiz...