Question 2 (essay question) “Fairness is a value that is touted and typically reinforced from childhood onwards. Its association is universally positive. But does fairness have a place in business?”

Rubin, J.D. (2012) Fairness in Business: Does it matter and what does it mean? Business Horizons 55 p11

REQUIRED: A. Read the journal articles noted on the reading list (available on Moodle). B. With reference to appropriate literature, write an essay that addresses the following points: i. Identify the problems businesses face if they only focus on profits and share prices; ii. Explain the importance of fairness in business AND explain what it means for a business to be fair.

Fairness is a value that is touted and typically reinforced from childhood onwards. Its association is universally positive. But does fairness have a place in business?

Points to talk about:

Profit is the key incentive which drives businesses to do better, to keep the business going, and the money can be used to invest further for the business to grow and make better things for the world. However, what happens when the business only focus on profits and share prices but nothing else? What happens if the head of the business is only in it for them-selves, but not for the whole welfare of the business and what the business is for? ->all companies require capital to carry out business activities and sustain themselves. i) Problems businesses face if they only focus on profits and share prices
>If treated as pure profit and share prices, business will not be able to grow. (e.g. minimizing costs)
>If businesses focus solely on profits and share prices, it may have damaging effects on morals and result to illegal involvement in the industry. E.g. the wall street crash of 2008
>Long-term effects such as a sustainable planet and human society. (e.g. long working hours could damage productivity and have a diminishing effect)
>Forgetting the purpose and value of the business, however realities often clash with social responsibilities. To do the right thing costs money.
>most businesses and consumers want to do the right thing. But our commitment is really put to the test when it costs us something.
>the value that a company creates should be measured not just in terms of short-term profits or pay checks but also in terms of how it sustains the conditions that allow it to flourish over time. These corporate leaders deliver more than just financial returns; they also build enduring institutions.
>purpose to meet stakeholders’ needs in many ways: producing goods and services that improve the lives of users; providing jobs and enhancing worker’s quality of life; strong network of suppliers and business partners; ensure financial viability; resources for improvements, innovations, and returns to investors. ii) Explain the importance of fairness in business AND explain what it means for the business to be fair:
>Important for the employee. E.g. ethical work hours, paternal leaves, annual holidays. Long work is not necessarily good work, exhausting the employees will only make the employees dislike the work and hence could reduce their productivity. Although long work could increase revenue for the company in the short term, in the long term it is not sustainable as employee will be tired out. No motivation to contribute to the business.
>Under-payment inequality. Illegal for workers to discuss their salary. However, if an worker is under paid compared to another co-worker who does the same work, there is no motivation for an employee to work harder. Therefore, it is important to ensure workers are treated fairly for the business to reach its max potential.
>Rewards/bonuses. To reveal the connection between efforts and results. This is important because the worker’s extra effort in the business is realised, thus give them a sense of achievement when they are rewarded for their work. This is important for a business because It ‘’strengthens member’s commitment and desire to contribute even more towards the community’s purpose’. Why should worker’s put in more work if they receive nothing in return? (equity theory)
>Important for the customers. E.g. fair prices. Relationship between cost and price. Customers unlikely to buy if price is unreasonable and not affordable (?)
>’’Neglecting the environment may drive away customers’’
>define what is a business: it’s a corporation with people, no one wants to work for a place which treats you unfairly. Full stop.