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Research Paper

Emmanuel Mkali Chiolowa

Module 7 Assignment

Research on three (3) Global 500 Fortune Companies

ESB 5011 – Business Ethics in a Global Environment

Term One 2021

[Dr. Marcus Ellison]

May 9, 2021
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Research Paper

RESEARCH ON THREE (3) GLOBAL FORTUNE 500 COMPANIES

Introduction

In this paper we look at the three (3) Global Fortune 500 companies, what each company

does, their ethical systems and code of ethics, how each company evaluates and measures

their ethical systems, and the impact that each company has on their communities where they

operate. The history of business ethics is discussed, the stakeholder theory will be mentioned

too as relates to the ethical system employed in framing the code of ethics for each of the

three companies. That will lead us to a discussion on the Triple Bottom Line (TBL)

framework, which incorporates social, environmental, and financial aspects of the

performance of the organization. Then Corporate Social Responsibility (CSR) will be linked

to TBL as companies have a vested interest in the caring of their communities in which the

serve.

The History of Business Ethics

Every business organization is equipped with collective values that can be used to evaluate

whether the behaviours of an organization’s members are considered acceptable or

appropriate. Those values are referred to as business ethics. Aristotle, Socrates, and Plato

started the discussions many centuries ago, which led to the discovery of ethics. For as long

as commerce has existed, ethical problems have been there about how business is conducted.

A lot of changes have taken place in business ethics over time from when the philosophers

like Aristotle decided to initiate the discussions centuries ago on ethics.

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The 1960s saw the ethical environment spill into social unrests where employees and

employers began to have confrontations over each other and overlooked the earlier values of

loyalty that were created in the 1950s. This was a time when drug use among employees

became an ethical problem with employers. This followed the formation of the corporate

social responsibility movement and establishment of codes of conduct by corporations to deal

with the problems. The 1970s saw the economy suffering a recession and unemployment rose

to a record high. Environmental matters became centre of attention with corporations and

human rights issues starting to develop. The 1980s were characterised by financial fraud

issues with employee’s loyalty towards their employers decreasing dramatically. The first

business ethics office was established in 1985 at General Dynamics with the help of the

Ethics Resource centre in the United States. The 1990s was linked with global growth

opportunities of many corporations with unsafe work practices, child labour, and

environmental issues taking centre stage. Financial mismanagement problems followed as

companies registered substantial growth in their operations. Then came the new millennium

which saw unethical companies surface wrought in financial management problems.

Intellectual property theft, cybercrime, and personal privacy issues came to light. In 2002 the

Sarbanes Oxley Act was passed in the United States in the wake of Enron and associated

scandals involving corporate governance (Stanwick & Stanwick, 2014). Around the same

time, corporations came under increasing pressure from the general public and NGOs to

engage in Triple Bottom Line (economic, environmental, and social) accounting and turn

their attention to Corporate Social Responsibility (CSR) as regards to the communities within

which they operated.

In the following section, we evaluate and measure the ethical system of three Global Fortune

500 Companies.
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Ethical system and code of ethics of Ford Motor

Ford Motor Company is an automobile company that designs, manufactures, markets, and

services Ford trucks, utility vehicles, cars as well as Lincoln luxury vehicles. Ford Motors

Company is equipped with a code of conduct handbook which is intended to focus on ethical

risk, provide direction on how to deal with ethical issues, provide policies and approaches on

how to report unethical behaviour, and create a culture of accountability and honest. In the

handbook is information on how to report questions or comments on their website. This is for

the company to encourage feedback and wants its employees to get involved in shaping

Ford’s ethical culture. The support of top leaders is underpinned to emphasize the importance

of ethical behaviour. The workplace environment; gifts, favours, and conflicts of interest;

protection of company assets and data safeguarding; integrity of financial records and other

records; product quality, safety, and environment; intellectual property; political activities;

competition and antitrust laws; and international business practices are covered in the

sections of the code.

A description of common ethical problems and how to deal with them appear in sub-sections.

For example, employees are not encouraged to take gifts or favours as that would appear as

bribery. Included in the code is a list of items employees are prohibited to accept from

business counterparts. The items include cash, discounts on products (unless offered to the

whole company). Similar examples are provided throughout the handbook. Guidelines on

international business are taken into consideration too. Ford does maintain a strong oversight

over its global operations because of its multinational company status. The handbook covers

importing, export controls and prohibited transactions, and money laundering as important

global issues. Ford lists information and contacts throughout the handbook to which

employees can refer if they have questions or concerns (Ford Motor, 2007)
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Following the code of ethics of Ford Motor as outlined above, it could be right to say that the

company’s ethical system employed is based on Stakeholder Theory, which argues that a

company should create value for all stakeholders of the company and not just shareholders.

Ethical system and code of ethics of Citigroup

Citigroup is one of the largest financial services firms and serves clients around the globe. It

offers deposits and loans (mainly through Citibank), investment banking, brokerage, wealth

management, and other financial services. Citigroup code of ethics starts with a message

from the CEO signifying support by top leadership in ensuring that it shares a responsibility

with the rest to maintain client’s trust by holding themselves to the highest standards of ethics

and professional behaviour and acting with integrity with everything they do and the

decisions that are made. The sections of the code covers the following: Citi’s value

proposition of enabling growth and progress; its shared responsibility to key stakeholders; the

decisions made in client’s interest to create economic value; speaking up and seeking

assistance on ethical concerns; upholding its values through conducting investigations

thoroughly and fairly.

The sub-sections discuss Citigroup’s people in attempting to foster a respectful environment

– maintaining professional skills, embracing diversity and inclusion, and keeping its

workplaces safe and healthy; the company and protecting its personal, proprietary, and

confidential information; protecting its assets, safeguarding its reputation, managing its

records and accounts, and avoiding conflicts of interest; its business – doing business fairly

and honestly; working in global environments; its communities in which it operates; and its

commitment for new hires to sign up for the code and comply with the principles and

policies. A description of common ethical issues and how to deal with them appear in sub-
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sections of the code. For instance, insider trading and how not to get involved in the

malpractice and the consequences when you do violate it (Citigroup, 2019)

The ethical system used is also based on Stakeholder Theory. The company considers all the

stakeholders for value other than just stockholders.

Ethical system and code of ethics of Coca-Cola

The Coca-Cola Company markets, manufactures, and sells beverage concentrates and syrups;

and, finished beverages (including sparkling soft drinks; water and sports drinks; juice, dairy

and plant-based drinks; and tea and coffee). The company stipulates that integrity is the

essential ingredient code of business conduct. The first part of the section of the code talks

about the awareness of the handbook – why the company has a code, who is covered under

the code, what needs to be done when faced with an ethical dilemma, who the local ethics

officer is, and reporting concerns. Other sections discuss caring for the company’s asset –

protecting non-public information, maintaining accurate records, preventing money

laundering; demonstrating accountability by avoiding conflicts of interest, be responsible

with gifts, meals, and entertainment, and building transparent relationships; dealing fairly

with others – compete fairly, comply with trade compliance laws, not to tolerate bribery, not

to trade inside information, and to follow privacy laws; caring for the communities in which

the company operates – show respect for human rights and that the company cares. The code

has sections divided into subsections which details common ethical problems and how to

address them. For instance, the company does respect human rights and it draws up a

framework for its engagement and how to live it (Coca – Cola, 2018) The company employs

a Stakeholder theory, an ethical system which accounts for all the stakeholders of the

company and not just the shareholder.

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Comparing and contrasting Ford Motor, Citigroup, and Coca – Cola ethical systems as

a whole and how they affect their local communities

The Stakeholder theory involves a set of relationships among groups that have a stake in the

affairs that make up the business. It is about how customers, suppliers, employees, financial

institutions, communities, and managers relate to each other to create value. To understand a

business is to recognise how these relationships work and change over time. It is the job of

the top leadership of a company to manage and shape these relationships to create as much

value as possible for stakeholders and to manage the distribution of that value (Freeman,

1984). The three companies have all used it as an ethical system for framing their code of

ethics to provide guidance on how to deal with ethical issues. The system could be linked to

the Triple Bottom Line accounting framework, which includes three dimensions of

performance: social, environmental, and financial. As opposed to the traditional measure of

profits alone in the performance of the company, the Triple Bottom Line accounting takes

into the account the social, and environmental aspects. This has led to companies to turn to

Corporate Social Responsibility (CSR) as regards to communities in which they have

operations running. All three companies have a vested interest in caring for the communities

in which they operate as shown in their code of ethics.

Conclusion

In this paper we looked at the three (3) Global Fortune 500 companies, what each company

does, their ethical systems and code of ethics, how each company evaluates and measures

their ethical systems, and the impact that each company has on their communities where they

operate. The history of business ethics is discussed, the stakeholder theory will be mentioned
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too as relates to the ethical system employed in framing the code of ethics for each of the

three companies. The Triple Bottom Line (TBL) framework, which incorporates social,

environmental, and financial aspects of the performance of the organization is also discussed.

Then Corporate Social Responsibility (CSR) is highlighted relating to TBL as companies

have a vested interest in the caring of their communities in which the serve.

References

Citigroup. (2019). Our Code of Conduct. Retrieved from

[Link]

Ford Motor. (2007). Code of Conduct Handbook. Retrieved from

[Link]
policies/[Link]

The Coca-Cola Company. (2018). Code of Business Conduct. Retrieved from

[Link]

BIBLIOGRAPHY Stanwick, P., & Stanwick, S. D. (2014). Understanding Business Ethics (2nd ed.). Los
Angeles, United States of America: SAGE Publications, Inc.
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