Qn 1.Examples of Ethical & Unethical Business Practices
Also known as corporate ethics, business ethics are professional principles whose role is to examine moral problems emerging in a business environment. They apply to business behaviour and employee conduct in the organization. Organisation’s culture is responsible for setting standards that distinguish good and bad. One example of ethical business practices includes fairness. An organization should not exercise power gain for a competitive advantage against its rivals to get a competitive edge. This includes not taking advantage of the competitor’s mistakes. Instead, they should strive for fairness and justice. Anglo American as a mining company strives for this. They build capabilities of the communities where they are based without favouritism, especially in Africa where 76% of its employees are based.
Another example is keeping a promise. Committing to a promise and fulfilling it builds trust in business. It is a vital tool for a business manager. One should not justify the reason for not complying with a commitment. For instance, Anglo American pays their taxes duly to the authorities in the countries they are based since most resources come from the nation states hence promoting development in those countries.
Qn 2.Benefits of Anglo American to the host community and shareholders
The benefits of professional business practices to an organization and wider community include attraction of customers to the firm’s products thereby increasing revenue. This is on top of increasing employee retention which consequently increases their productivity. Also, good ethics attract employees to the organization reducing recruitment costs and eventually the company gets a chance of retaining the most talented employees. Investors are also attracted to the organization which keeps the company’s share price up and maximally protecting the company from takeover. Anglo American has a Socio-Economic Assessment Toolbox (SEAT) process team which addresses stakeholders’ perspectives and priorities after meeting local community leaders. An example is the relocation program in South African villages, Ga Pila and Motlhotlo to new locations that had better houses, infrastructure, and more arable land. However, the main reason for resettlement was to allow accessing important mineral deposits.
Another example is Anglo American selling 26% of its total assets in South Africa to Black Economic Empowerment groups. They did this in support of SA government policy that allows transferring the share of ownership and the benefits of those mining to the minority who were previously not included in the economy. In the same country, Anglo American saw to the invention of Exxaro, the biggest company owned by black people listed on the SA’s Stock Exchange. On top of that, Anglo American has been leading in the campaign for AIDS sensitization. They hope to assist the government in reducing poverty while improving the welfare of the citizens.
Qn 3.How Anglo American strikes the balance of social, economic and environmental considerations
Like all business, Anglo American strives to strike a balance of social, environmental as well as economic considerations and is constantly under scrutiny from pressure groups. This is a responsibility of the SEAT process team to make the careful business decisions as guided by the organization’s policies. The organization has a significant presence in developing countries because many mineral deposits are found there. That means they understand the challenges facing such countries including weak governance. SEAT ensures there is rigorous adherence to local laws. They do so by supporting good initiatives geared towards good governance and boosting employment opportunities at the disposal of the local communities where the mines are present, to improve the economic status of the people.
On top of that, the SEAT team ascertains that social consideration is taking part in improving the local people’s welfare. This is demonstrated by engaging with local leaders to resolve issues affecting them and also partnering with local farmers to boost food security. For instance, besides South Africa, the organization has a license to operate in Chile too where they are partnering in local business development.
Lastly, to strike a balance social, economic and environmental consideration, Anglo American appreciates the climate change challenge as a global threat to the environment. Also, they endeavour to protect their employees’ assets against the possible effects of the change, and those of host communities. They do so by partnering and consulting with stakeholders on how to tackle pollution, waste management, as well as protection of natural resources. They ensure the decision is compliant with the ISO 14001 standard, that requires an environmental policy that points out the intentions and direction the top management formally expresses. More so, in their ten-year strategic climate change plan, they hope to apply technology to combat this global challenge.