Good Ethics in Good Business Assignment Example | Topics and Well Written Essays - 3000 words

Good Ethics in Good Business - Assignment Example There are conflicting studies regarding the link between good ethics and profitability in the short term, however, it does appear that good ethics can help a company achieve a strong long-term business model. Conversely, in the cases of Enron, Parmalat, and Merrill Lynch for example, a business ethics-related scandal can cost billions of dollars and even the destroy a company. Empirically, ethics or the lack thereof, can be a wild-card factor that can either improve or cost a business. More or less, good ethics serve as an insurance policy against corporate implosion and can help establish long-term customer and employee loyalty. In today's business culture, however, profitability is still the trump card, even amongst a trend toward greater corporate social responsibility. To understand what good ethics are, a clear definition of ethics must be made. The reality is that among others, there are two major separate and at times, conflicting paradigms regarding a preferred business model. The prevailing model in modern business, an open-market model, relies philosophically on Adam Smith's lassiez faire approach, that unadulterated market competition will always yield the most effective results. In theory, a pure open market system abhors any form of market interference, as it will only work counter to the maximization of an economic system. On a practical level, this type of competition finds its way into the investment markets. Large corporations are constantly under pressure to showcase their value in the form of stock prices, earnings reports, and prognoses for increased profitability in the near future. It would be considered unethical in this model to interfere with the natural conduct of business. Advocates of this model are by nature, against regul ation. The other model, which focuses on corporate social responsibility, is a more holistic approach that includes the social consequence of a company beyond its shareholder obligations. Therefore, good ethics are measured by the benefit to all entities that come in contact with a company directly or indirectly, from shareholders, to customers, to employees, to subcontractors, and to the environment. This type of model, which has been recently adopted by the United Nations, is challenging the traditional bottom-line approach and redefining the meaning of good ethics in business. The open market model has been the prevailing model of big business since roughly 1980, following international economic turmoil, believed to have been caused by an over-regulating economic philosophy from both sides of the Atlantic Ocean. Deregulation, desperation, and temptation have invited many ethics scandals in recent memory, from European scandals in the 1980' and 1990's to the U.S. based global corporate scandals in the early 21st Century. Lloyds of London for example, one of the largest insurances providers in the world, narrowly avoided bankruptcy as a result of allegedly misrepresenting its profitability and the amount of liabilities in the early 1980's to its Names, or wealthy individuals who underwrite their policies. The scandal led to over $8 billion in losses as it rocked London's financial markets, and as Tony Blair claimed, "Lloyd's has committed the largest, most extensive and pervasive fraud in history (McClilntick, 2000)." Another large European company, Parmalat , has been accused

Aldi moves beyond competing on price Essay Example | Topics and Well Written Essays - 1000 words

Aldi moves beyond competing on price - Essay Example In the process they have also changed competitive environment. In the face of such changing economy supermarkets like ALDI should respond to its environment, and take strategic actions to not only sustain growth but also improve on its competitive position in the industry. The UK supermarket industry in 2008 accounted for retail sales of approximately  £124.1bn and performed well compared to other industries despite market gloom (Verdict 2009). This combined output has been generated by the various categories of supermarkets - large grocery retailers, regional retailers, fascia group, convenience stores, LADs (limited assortment discounters), frozen food retailers and specialist retailers (Verdict 2009). Despite its financial size, the supermarkets industry is driven by the major large grocery retailers which account for 85 percent of its sales and four dominant supermarkets (Competition Commission 2008). Although, ALDIs direct competitors are Lidl and Netto, it is also competing with the other categories of retailers. Considering this scenario, ALDI which is a LAD must consider its competitive environment in order to devise strategic plans for sustainable growth. To analyze the industry, Michael Porters (1985) Five Forces Model is being used to gauge the competitive environment. The Five Forces include buyers bargaining power; suppliers bargaining power, threats of substitutes; threats of new entrants; and the degree of rivalry among the firms. These shall be analyzed as follows: The supermarkets are the price-takers according to the Competition Commission Report (2008) which means that the consumers have to buy at the price set by the supermarkets. The supermarkets compete based on prices which although allow consumers a wide range of retailers to choose from but the nature of the product (food) allows them to be