GAINS OF TOUGH ETHICAL BUSINESS DECISIONS – LESSONS FROM INDUSTRY GIANTS

Costco, one of the biggest American retail firms decides to pay fair wages. Fair wages are a legal requirement in many countries when their labor laws are looked at and all a firm needs to do is to meet it at a minimal level and they will do just fine with the law but Costco in the face of a substantial increase in revenue decides to increase its wage per hour from $13 to $14 in 2018 and further to $15 in 2019. In contrast, the average retail employee in the United States of America is paid between $7.25 and $9 an hour for work done. This is a clear decision on ethics in that the leadership of Costco realized their rising income is a result of the efficiency of their employees so increasing their wages was very much in the right direction.

Costco’s decision to pay fair wages brought several significant benefits to the company. Firstly, it boosted employee morale and job satisfaction, leading to increased productivity and higher-quality customer service, which are critical in a competitive retail environment. Secondly, the company experienced reduced turnover rates, saving costs associated with recruitment, training, and onboarding new employees. Additionally, fair wages fostered loyalty among staff, creating a stable and experienced workforce that contributed to the company’s operational efficiency. This approach also enhanced Costco’s brand reputation, attracting socially conscious consumers and talented job seekers who valued ethical business practices. Overall, the strategy demonstrated that investing in employees can yield substantial returns in the form of improved performance, customer loyalty, and sustained profitability.

Second is Best Buy’s commitment to sustainability. Hubert Joly, the CEO of the company committed to reducing his company’s contribution to the reduction of waste in the environment. He did this by encouraging customers not to throw away electronics they no longer need. The firm went ahead to collect about two billion pounds of unwanted electronic appliances from various communities for recycling purposes. This is a very clear ethical decision to rid the environment off waste and thereby improving the sustainability of the environment for all its inhabitants. This decision will come at a cost for the company but their decision to proceed with such a project means they are thinking of the greater good of the people they serve and more.

The benefits of this ethical decision were manifold. Best Buy strengthened its reputation as a socially responsible brand, resonating with environmentally conscious consumers who increasingly value sustainable practices. This initiative also fostered customer loyalty, as patrons felt encouraged to support a business that prioritized the planet. Furthermore, by recycling electronic waste, the company contributed to reducing pollution and conserving natural resources, indirectly benefiting public health and the global ecosystem. Internally, this program boosted employee morale by aligning corporate actions with values that promote environmental stewardship, creating a culture of pride and engagement within the workforce.

Finally, Woolworth gets out of liquor and gambling. Woolworth Group Limited, the largest grocer in Australia on the back of criticism by mothers in the country on its investment outside of groceries decided to stop selling liquor in its shops and to sell off all its investments in the area of gambling. Here, another very highly ethical decision is made by the leadership of this firm.  Although the call was made by citizens, the company could have easily proceeded to do business as usual and make money however, they chose to be ethical rather than transactional.

The benefits of this approach were substantial. By responding to public concerns, Woolworths strengthened its relationship with the community and enhanced trust among its customer base, especially families. This decision also positioned the company as a leader in ethical corporate practices, differentiating it from competitors in the retail industry. Internally, the move fostered a sense of pride among employees, knowing their company aligned with values that prioritize societal well-being. Furthermore, it set a precedent for corporate accountability, demonstrating that businesses can thrive while making socially responsible choices.

These companies made strategic ethical decisions that went beyond legal requirements, focusing on the well-being of their employees, communities, and the environment. By prioritizing fair wages, sustainability, and social responsibility, they not only fostered stronger relationships with their customers but also built a more loyal and engaged workforce. These ethical choices helped enhance their reputations, positioning them as leaders in corporate responsibility. In the long run, these decisions contributed to sustained business success, demonstrating that ethical practices can lead to positive outcomes for both the company and its stakeholders.

 

 

PAUL ANANG AMASAH

THE COLLEGE BUSINESS CONSULT

18TH DECEMBER, 2024

THECOLLEGEBC@GMAIL.COM

 

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