This report evaluates the business ethics and practices at British Airways and Wal-Mart in light of the prevailing political, social, ethical and legal backgrounds. It contrasts the political, social, ethical and legal phenomena in the Britain and USA, the home of these two companies respectively, and how the factors determine decision making at management level.
Business ethics, especially regarding labor relations has been chosen because it is a shared challenge between the two firms. British Airways and Wal-Mart have a history of labor relations problems. This report focuses on how these factors influence management of labor relations in the two firms and the resultant outcomes.
International Business Issues and Ethics
As globalization evolves so is international business. Globally, business has grown to an extent that international businesses are now sharing similar business challenges. This is due to the emergence of international business models. It is worth noting that despite the fact that international firms are facing almost the same problems world over, there are factors determine how these problems are approached in each country.
These factors include political, social, legal and ethical. Each country has a set of unique norms and cultural orientations that determine the type of ethical systems that exist. This means that businesses are regulated using different ethics from country to country. Therefore, company managers have to ensure that they are conversant with the ethical systems of the countries within which their businesses operate.
These ethical systems influence decision making (The Sullivan Foundation, n. d.). Two companies, Wal-Mart and British Airways have one similar problem: labor relations disputes. The two corporate giants have been received numerous trade suits in the resent past most of them regarding labor relations. Management decisions in the two companies in response to the issue of labor relations vary because of the prevailing political, social, legal and ethical factors in Britain and America.
The political environment in America is different from the political environment in Britain. In America, large corporations are allowed to contribute financially to government projects as well as political campaigns. Such contributions are used by these companies to establish political links with the Senate, and later use those links to create business advantage.
Wal-Mart, being one of the leading political financers in America, has gained huge popularity within government circles. The company uses its close links with the government to induce major decisions at Senate level. The company has used its political connection in Washington to keep all its employees from being unionized (Quinn, 2000).
British Airways operates under a different political environment that requires employers to unionize their employees. The company aims at keeping a balance between negotiating with individual staff members and the staff unions. The company has an efficient communication strategy that facilitates effective negotiation with individual employees as well as staff unions (Blyton & Turnbull, 2004).
Wal-Mart is opposed to allowing its employees to join staff unions as it sees this as the best way to maintain its competitive advantage over its competitors. The company believes that keeping employees un-unionized is for the best interest of the company as well as the employees.
The company also sees this as an effective business practice that will help it maintain its position as the number one retailer globally. As such, the management fights staff unionization at all cost (Quinn, 2000). This means that the management at Wal-Mart follows a pragmatic approach to labor issues, something akin to ethical relativism (Prawda, 2009). The company’s decisions regarding labor relation are thus pragmatic.
One of the most esteemed business practices at British Airways is to keep employees happy and satisfied. As such the company allows for unionization of its staff members. Due to the heavy presence of unions, the company’s management decision making especially regarding labor relations is more structured and procedural. The company in making major business decisions has to negotiate with employees through their trade unions (Blyton & Turnbull, 2004).
Absence of staff unions at Wal-Mart means that the company has an automatic legal advantage over its staff whenever labor relation issues arise. Wal-Mart’s effort to limit unionization of its employees is a legal tool to evade any legal liabilities (Quinn, 2000).
For British Airways, the heavy presence of labor unions means that most of the labor disputes end up in court or in employment tribunals. As such, the company has more legal liabilities and has to negotiate intensely with employees as well as trade unions to avoid any legal suits. This also means that the management decision making is inclined towards meeting employees’ interests.
The companies approach to labor relations based on the human rights theory (Prawda, 2009). Social factors also play a role management decision making in both companies. In America, the popularity of an organization is seen in terms of its business ethics. Companies with unpopular ethics loose public support. This also means loss of business. To avoid such losses, the management at Wal-Mart engages reputable public relations firms to take care of the company’s public image.
As such public relation is part of decision making at Walmart (Quinn, 2000). British Airways is also interested in maintaining a reputable public image. As such the company chooses a different path from Wal-Mart. British Airways uses its contact with staff unions as the best tool to manage its public relations. This means that the company sees employees’ relations as the best way to improve its public relations and corporate image (British Airways, 2009).
When compared to Wal-Mart, British Airways has more business liabilities due to the business environment it operates in. most of these liabilities are brought about by the fact that the company has tied its labor relations to staff unions.
This means that British Airways employees have collective bargaining power, which comes with more rights. The situation in America is quite different, with company’s using their political links for their own business advantage. The implication of such differences is that firm in the two countries have different approaches to management.
Blyton, P., & Turnbull, P. (2004). The dynamics of employee relations. Houndmills:` Palgrave
British Airways. (2009). The way we run our business. Retrieved June 25, 2011, from http://www.britishairways.com/cms/global/microsites/ba_reports0809/pdfs/Workpl ace.pdf
Prawda, G. (2009). The cultural dimension of business ethics. Retrieved June 25, from
Quinn, B. (2000). How Wal-Mart is destroying America and the world. Berkeley, CA: Ten Speed Press.
The Sullivan Foundation. (n. d.). The global Sullivan principles. Retrieved May 25, 2011, from http://www.thesullivanfoundation.org/gsp/default.asp