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Introduction
In the modern world of business, it is important to take into account the ethical issues, for their neglect can lead to dire consequences. In this paper, we will consider the case of severe violation of workers’ rights exposed by Rowlatt and Deith (2015). The ethical issues of the case, the involvement of stakeholders, their responsibility and possible solutions for the case will be discussed.
Ethical Issues and the Involvement of Stakeholders
The report by Rowlatt and Deith (2015) is among the ones that expose the true meaning behind the term “cost-effective nations”: the workers of the tea plantations live in unsanitary, hazardous, degrading conditions; their working conditions are not less dangerous and harsh. Clearly, numerous ethical issues are involved in this case; they include basic human rights violation, legal rights violation, the use of child labour, underpaying, harming the health of workers, and countless others. Therefore, it is essential to discuss which stakeholder groups are involved in these ethical issues, which are affected by them, and how.
Obviously, the most affected by the businesses’ policies are the workers themselves, who are also the stakeholders of the company (Duckworth 2014). Their human rights are neglected, and their labour practices are harmful to them, as well as for the whole Indian society (leading to numerous diseases and health issues, low life expectancy, low levels of education, children’s mortality, etc.). Importantly, in today’s global world, it is arguable that these issues also have an influence on the whole world. Of course, some can and will claim that it is the workers’ own free choice to work in such harsh conditions, for they could always choose a better job; however, apparently, they do not have much choice.
On the other hand, the first-world employees might slightly benefit from the exploitation of the Indian labourers. The low wages and economizing on the living conditions allows the companies possessing the plantations to make more profits, a certain insignificant part of which might go to the white-collar employees. The low cost price of the teas allows for lower prices on them in the market, which helps the companies retain their successfulness and grow.
Clearly, the group that benefits most from the exploitation are the shareholders of the firms; these entrepreneurs gain most profit from the exploitation, and, as the policymakers of their companies, are also most responsible for the inhumane working and living conditions that the Indian labourers exist in. Also, the awareness of these problems and doing nothing to address them might promote adverse organisational culture. Even if they have been misinformed by the auditors that the working conditions are satisfactory, their responsibility is still extremely high.
Apart from the shareholders, the groups that can be considered involved in the malpractice are the companies’ “white-collar” workers (who at least ignore the problem), the enterprises’ management, the Indian authorities that tolerate the numerous legal breaches, and the auditors and other parties that monitor the activity of the firms. Such stakeholders as the companies’ customers and the consumers of teas are the least involved, for they might even be unaware of the existence of the problems in question, viewing the major and respected enterprises as trustworthy, according to the fundamental (but in this light–somewhat doubtful) maxim of the organisation-stakeholder relationship (Greenwood & Van Buren III 2010).
Why Do the Issues Deserve Attention?
The ethical issues involved in the case deserve attention due to a number of reasons. It is possible to scrutinize them by employing some of the main types of ethical theories; deontological and consequentialist perspectives will be utilized.
In deontological ethical theories, it is accepted that one must act according to their duty regarding of the circumstances and consequences. The next problem that arises, then, is the choice of an approach according to which to formulate one’s duty. If one adopts views according to which the Indian workers are nothing more than expendable “human resources” (maybe even not bearing the title “individuals”, just some mass of abstract resources) that should work for the company to make profits (a view such as this, perhaps, was/is adopted by the key figures in the corporations in question, or those responsible for concealing the atrocities), then, of course, the company’s owners, managers and stakeholders did everything right. On the other hand, according to most approaches, the management of the companies should have addressed the atrocious conditions of the Indian workers, for major positive expectations and hopes are generally placed in the corporate responsibility, and it was the management’s duty to deal with those problems (Halme, Roome, & Dobers 2009).
According to the consequentialist theories, actions should be judged on the basis of their consequences. If the consequences are good, the action is moral; if they are bad, the action is not moral or immoral. Of course, underpaying workers in India allows the companies to make more profits, perhaps pay their first-world employees slightly higher salaries, and sell the teas for somewhat lower prices. On the other hand, the consequences for the Indian workers are dire. They live and work in atrocious conditions, suffer from malnourishment and sickness, their children die from hunger and poverty diseases. Their lives are thoroughly and irreversibly poisoned. To some people, it might even seem laughable to speak of their human dignity when they simply have nothing to tame their hunger with; however, this issue also remains important. The consequences are highly negative not only for the Indian society (where poverty, disease, low life expectancy, low levels of education are just some of the results) but also for the West; the spread of the disease is only one of the issues, for this cultural racism nourishes discrimination at home and can lead to major political disturbances bearing adversity to everyone (Wollenberg 2014).
The Responsibility of the Companies and Other Stakeholders
There are two main approaches to corporate social responsibility that allow judging who should be considered responsible for any social consequences of a firm’s activity. According to the first one, the company’s owners (shareholders) are to bear the main responsibility; the second one asserts that stakeholders (i.e., groups that have a major influence on the firm, or are significantly influenced by it) should also be held responsible (Kline 2010, p. 15). In addition, certain other aspects, such as the kind of obligation that the actors have, the awareness of and knowledge about the company’s activities, also play a role in assigning responsibility to the involved parties (Kline 2010, p. 15-16).
Therefore, the owners and shareholders of the companies are to be held responsible according to both approaches. It appears unlikely that the shareholders did not even suspect that the workers and problems, and, because they are responsible for the formulation of the businesses’ policies, it is primarily their fault; their position on the Kline’s (2010, p. 77) connection continuum seems to be on the extreme left.
According to the second approach, stakeholders are responsible; then, clearly, the Indian management of the companies are also to be held responsible, for they did not address the issues, possibly even supporting the problems. Auditors, who also knew of the problems but did not act, have much responsibility as well. The first-world workers of the corporations also have a certain degree of responsibility, but rather small, for if they knew about the problems, they possessed little power to address them; they still could attempt to fight for the Indian workers’ rights, but their influence perhaps could not have been significant.
Finally, the responsibility of the companies’ clients (tea consumers), if any, is minimal because e.g. the consumers might not have even known that Lipton is a brand possessed by Unilever, let alone being aware of the conditions of the workers, if such information could even have been found. The shops have a slightly higher degree of responsibility because they chose who to buy large amounts of drinks from, but it is also less significant than that of the company’s employees and officials.
Possible Solutions
There are some solutions to the problem that exists in regard to the Indian plantation workers. It is clear that the entrepreneurs might attempt to conceal the atrocities (which they did even after the exposure; Rowlatt & Deith 2015), but it is clearly a bad way for the company to address the issue. For instance, external pressure (e.g. from consumers, rivals, governments) is one of the factors that cause organisations to engage in social accounting (Crane & Matten 2010, p. 214), and, after these problems were demonstrated publicly, it is clear that external pressure on the businesses operating the plantations will grow.
Rowlatt and Deith (2015) state that the companies pay their workers wages that are below the legal minimum, “justifying” it by claiming that they provide housing to the labourers. Clearly, a possible solution is to comply with the Indian law and supply at least the bare minimum which is required by the law, e.g. to increase the wages from 115 to 177 rupees a day and/or offer “adequate” housing as required by the law, also providing satisfactory working conditions (which include toilets at the working place, special equipment and suits, etc.).
The most socially responsible option for the firms is to provide the workers with housing, working conditions, and wages that are above the minimum requirements of the Indian government. It appears unlikely that the giants such as Unilever, Associated British Foods, or Tata Global Beverages will suffer from major losses if they do so, but the benefits for the workers and the society appear to be significant. However, both in this case and the previous one the companies will also want to create a proper degree of transparency to achieve a better image in the media (Crane & Matten 2010, p. 215).
In addition, parties other than the companies might influence the problem. Clearly, the authorities of India may take action and enforce the law, making the companies comply with the demands of the Indian legislation. (It is interesting to observe that in this case the companies will also be able to tell the media that they provide their workers with everything necessary, and improve their public image.) The company’s internal stakeholders (e.g., employees, the management, etc.) may also insist on enhancing the labourers’ conditions (Crane & Matten 2010, p. 214).
Such parties as the consumers of the drinks may also act in order to “encourage” the firms to better the working conditions. For instance, shops and tea consumers may start boycotting the products of the companies, instead choosing the goods made by their rivals. Because of this, sharing and spreading the information about the atrocities (which can be done by virtually any Internet-user) can also have an impact on the decisions of the enterprises. Users may also create petitions e.g. to the Indian government or to the heads of the companies, urging them to address the issues. Finally, the exploited workers may go on a strike, which will, however, require a high level of cooperation between them.
Critical Evaluation of the Solutions and Conclusion
The provided solutions have a number of pros and cons. The first solution (or, rather, pseudo-solution), concealing the facts, will most likely result in adverse consequences for the companies (losses in clientele, drops in sales, possible legal penalties, etc.). The second option, minimally complying with the Indian legal requirements, is better, for it at least partially addresses the problems the workers face and the dire social consequences of them; it also allows the companies to restore their reputation and prevent further clientele loss. The third option, providing decent working conditions and wages, is the best for the workers and the society; the firms can also gain more profit from it by creating the image of businesses which care for their workers and are sustainable. Finally, waiting while other parties (governments, social activists, the workers themselves, etc.) take action is likely to lead to harm to the firms, but there might be hope that the companies will eventually be forced to address the issues.
To sum up, the demonstration of the inhumane conditions the Indian tea plantations workers live and work in showed that there exists a major problem which raises numerous ethical issues and poses a threat not only to the workers but also to the Indian society, and may cause even more serious problems in the world.
Reference List
Crane, A & Matten, D 2010, Business ethics: managing corporate citizenship and sustainability in the age of globalization, 3rd edn, Oxford University Press, Oxford, UK.
Duckworth, H 2014, “The employee stakeholder”, The Journal for Quality and Participation, vol. 37, no. 1, pp. 19-20.
Greenwood, M & Van Buren III, HJ 2010, ‘Trust and stakeholder theory: trustworthiness in the organisation-stakeholder relationship’, Journal of Business Ethics, vol. 95, no. 3, pp. 425-438.
Halme, M, Roome, N & Dobers, P 2009, ‘Corporate responsibility: reflections on context and consequences’, Scandinavian Journal of Management, vol. 25, no. 1, pp. 1-9.
Kline, JM 2010, Ethics for international business: decision-making in a global political economy, 2nd edn, Routledge, London, UK.
Rowlatt, J & Deith, J 2015, ‘The bitter story behind the UK’s national drink’, BBC News.
Wollenberg, D 2014, ‘Defending the West: cultural racism and Pan-Europeanism on the far-right’, Postmedieval, vol. 5, no. 3, pp. 308-319.
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