SM4008/LD4008/AT7016 International Business: Contexts and Challenges Assignment Sample 2024
Introduction
Ethical challenges are increasing day by day within companies; ethical challenges within international businesses are the main focusing area of this study. Ethical challenges are most crucial challenges for companies as it decreases their customer satisfaction rate and sales growth.
They also can face a reduction of brand value in the global market. Ethical issues of companies also have adverse impacts on stakeholders of companies such as their discrimination and lack of health safety. This study involves a brief overview of Amazon along with the impact of ethical challenges faced by it. This essay mentions different stakeholders and strategies that can help Amazon in overcoming its ethical issues in Australia.
Company Overview
Amazon is a multinational company that offers online shopping to customers by involving E-commerce, artificial intelligence, cloud computing as well as digital streaming. This company has tied up with five large companies, for instance, Microsoft, Google, Facebook, and Apple (AMAZON, 2021).
Jeff Bezos formed Amazon in 1994, in an earlier stage, this company was only for selling books online. Further, it has expanded its business in video games, furniture, apparel, software, toys, jewellery, and foods. Amazon has spread its business over eighteen countries including Australia and UK. This company has approximately 16 subsidiaries throughout the whole world.
In recent times, Amazon has faced major types of ethical issues such as bullying and discrimination of employees, privacy issues, and deficiency in health and safety measurements that bring disruption to work in their Australian subsidiary.
They have faced conflict among stakeholders, disagreement with companies and employees, and disagreement with customers because of their ethical challenges. In this account, they have faced a high amount of customer dissatisfaction so that they have experienced a reduction in sales growth.
As per the report of 2019, Amazon has decreased its sales growth by 20%, and on the other hand, 30% of employees of Amazon have resigned from their jobs from 2019 to 2021(RETAILWIRE, 2019). This indicates that Amazon has reduced its effective position and marketing value within last few years only because of ethical problems in their Australian subsidiary.
For these circumstances, Amazon has found them in grave danger for these vital ethical issues. Majority of employees have resigned from Amazon because due to a high amount of discrimination and lack of health and safety measurements they have faced a high amount of job dissatisfaction and followed by their working efficiency was getting low.
Ethical challenges within this company
Amazon has suffered from several types of ethical challenges within its company. As per the views of Einarsen et al. (2017), ethical challenges of a company often can bring barriers in effective service provision to customers, and thereby these can bring disruption in company development and closure in the case of the subsidiary.
As a result, these ethical issues can affect this company by leaking the confidential data of consumers, reducing internal motivation of employees. Consequently, they can reduce their effective brand position and brand value as per the context of the Global stock market. In this account, ethical challenges of Amazon can take a crucial form if it is neglected. This company majorly is experiencing four types of ethical challenges which are discussed in below-
Discrimination in workplace
Employees of Amazon have faced a huge amount of discrimination within their workplace due to cultural differences and gender equity. As per the opinion of Goodstein (2021), due to cultural humiliation and gender-related discrimination, employees can lack their confidence level and their efficiency. From this, employees of Amazon can face job dissatisfaction.
On the other hand, cultural difference related discrimination is increasing within Amazon on a rapid basis. They have employed approximately 100 employees from different countries and regions in recent times in their Australian subsidiaries. Taking this into account, employees of different cultural belongings are affected by humiliation as they cannot establish a healthy communication relationship with country people due to language barrier.
As an effect, employees of Amazon have experienced a high amount of mental trauma, mental stress, anxiety, and depression. From this circumstance, Amazon has harmed by launching low quality of products and apparently reducing consumer value and consumer behaviour.
Lack of health and safety measurements
Due to a lack of health and safety measurements for instance lack of safety guidelines for using unsafe equipment and deficiency in safety wear which can help employees in protecting from physical injuries, employees of Amazon have experienced a reduction in their internal motivation as well as comfort within the workplace.
As per the accordance of Aryati et al. (2018), deficiency of health and safety measurements within the workplace often can bring physical injury among employees at the time of using unsafe equipment like packaging machines and develop fear within them. Consequently, employees of Amazon have reduced their working efficiency and induced their percentages of mistakes occurring and they have been forced to resign from their job. In this account, this is a major ethical challenge that has harmed employees of Amazon.
Privacy Issues
Amazon has suffered from different types of privacy issues due to its ineffective behaviour of E-commerce. As referred to by Kevin (2017), because of privacy issues companies can face data leaks, unethical authorization within their website as well as insecurity in online transactions.
For E-commerce, Amazon often faces privacy issues, for the impact of unethical hacking; one can easily leak the confidential data of Amazon which have been stored within E-commerce. As a result, Amazon has been affected by a reduction in innovation and creativity and creativity in product launching for data hacking.
Apart from that, because of unethical authorization within company’s official websites, this company can reduce the trust of consumers as unethical authorization facilitates fake information regarding products and so that disagreement with companies and customers can develop.
Besides that, privacy issues due to insecure payment infrastructure often bring financial loss within Amazon. Because of insecure payment process, many times, the company may not be able to receive payments through it that are debited from customers’ bank accounts.
Availability of fake and alternative products
Availability of fake and alternative products is the major ethical challenge of Amazon that brings damage to relationship of the company and their customers. As inferred from the study by Martinez-Martin & Kreitmair (2018), customers of online stores often claim that they have found a fake or an alternative product, which means they have found this product which they have not preferred.
As a result, customers of Amazon have not been able to impress this company. In 2019, 25% of customers have returned their products with a negative feedback about product quality (RETAILWIRE, 2019). From this circumstance, Amazon has not developed their effective wide range customer base in Australia due to this ethical issue. In addition, Amazon often posts their new product related information on their official website.
They post it with creative writing and an attractive format. At the time of executing this, sometimes they provide information that does not belong to their products on purpose to attract majority of customers. For this reason, a high level of customer dissatisfaction develops within Amazon. This company also has experienced multiple legal actions against them.
Therefore, this company has suffered from financial loss, and consequently, fake and alternative product delivery is one of the vital ethical issues of Amazon that affects both Amazon and its customers.
Adverse impact within company due to ethical challenges
Ethical challenges can drag different types of severe negative impacts on Amazon and even these major problems also can bankrupt this company. As stated by Charlier et al. (2017), companies can reduce their customer base and employee comfort due to ethical issues. The negative impacts of ethical issues which can establish within Amazon are evaluated below-
Decreasing customer satisfaction rate
Ethical challenges like privacy issues and delivering fake and alternative products have reduced customer satisfaction rates within Amazon. As described by DiMillo, Brown & Harrington (2021), a decrease in customer satisfaction rate within a company can reduce their marketing value as well as value of their share holding in the global stock market.
As a result, Amazon can face a high amount of reduction in their sales growth and people have lacked their interest in online shopping due to these challenges. Amazon has acquired the first position as per the customer satisfaction rate as per the report before 2019 which is 71% (RETAIL DRIVE, 2016). This indicates that they have been able to satisfy their customers effectively up to 2019.
In 2019, they have reduced their position and reduced their customer satisfaction rate by 25% because of their ethical problems (JOURNAL OF EMERGING TECHNOLOGIES AND INNOVATIVE RESEARCH, 2019). Thereby Amazon has reduced its range of customer base and reputation among the customers. They further also can decrease its annual turnover and follow by launching of diversified products on a rapid basis because of lack of budget.
This company can experience disruption in supply chain for instability in finance. Apart from that, Amazon can face conflict between investors regarding their shares within this company, and this company can need to close its Australian subsidiary permanently. In this account, this is decrement of customer satisfaction rate have a major adverse impact on Amazon and this also can lead to several types of more dangerous issues.
Lack of storing data
Lack of storing data has happened in Amazon as this company utilizes online technologies like cloud computing and Big data analysis for storing their important information. As discussed by Lai, Shankar & Khalema (2017), due to virus infection, online technologies can damage all the stored information of the online store and on the other hand, it can restrict confidential data from company.
As a result, Amazon has faced mishandling of logistics, and consequently, they have reduced their capability. Amazon has reduced its 30% of capability due to a lack of data storage (BUISNESS INSIDER, 2020). Apparently, Amazon may not be able to produce high quality products and henceforth customers can lack their interest in Amazon.
Besides that, due to lack of software upgradation, Amazon also has lost their stored data, and apparently, they can face conflict within employees due to lack of adequate information regarding the products. As an effect, this company has reduced the efficiency of products so that they have reduced the numbers of customers as per the global basis along with brand reputation.
Data leaking and hacking
For data leaking and hacking, Amazon has not been able to maintain its privacy within its online store. As depicted by Afsar & Umrani (2020), companies that have online stores often face data leaking and hacking which tends to unethical activities within online selling procedures and disrupt the selling work.
As an effect of data hacking, Amazon has been affected as their entire confidential information of customers has leaked and henceforth they have reduced their customer value and consumer behaviour towards their online selling. Amazon has faced various kinds of legal actions due to this security problem, for instance, General Data Protection Regulator has a complaint against Amazon due to lack of privacy (CPO MAGAZINE, 2020).
Apart from that, unique product related information, as well as supply chain regarding data of Amazon, has come out. As a result, their rival companies have been able to launch innovative products of this company. As an effect, they have reduced their innovativeness and diversification within their retailing market. Besides that, due to data hacking, customers often have been the victim of financial scams for their online transactions with Amazon.
From the report of 2020, almost 20% of customers of Amazon have experienced this scam in Australia (POLITICO, 2019). Due to this data leaking and hacking, this company can further get stuck within legal actions.
Inducing employees’ job dissatisfaction
Ethical problems for instance discrimination and bullying and deficiency in health safety measurements bring job dissatisfaction among the employees of Amazon. As derived by DiMillo, Brown & Harrington (2021), because of bullying of employees within the workplace, employees can lack their working efficiency as well as they can face deficiency in internal motivation and can be the victim of negative emotion.
In this account, Amazon has not been able to increase efficiency of products as well as efficiency in provision of service to customers because of this problem. Consequently, they have reduced their customers from different regions of Australia, and due to the reduction in global brand value and marketing value, this company has reduced their customer base from another country as well so that Amazon has experienced a high amount of financial loss.
Besides that, deficiency in health and safety measures within the workplace, employees of Amazon often have injured physically at the time of using risky equipment like drilling machines, packaging machines. Taking this into account, they are experiencing a lack of confidence and motivation level towards their work. They may not be able to enjoy their work so that job dissatisfaction takes place with Amazon.
Because of job dissatisfaction of employees, Amazon has suffered from confliction among employees as well as certain resignations of employees. Therefore, Amazon can be the victim of understaffing and followed by reduced productivity of this company. As an effect, customers can modify their consumer behaviour from Amazon for lack of productivity.
Issues of stakeholders due to ethical challenges within this company
Due to the impact of ethical challenges of Amazon, their stakeholders are affecting mostly. As suggested by Vitolla et al. (2021), there are two types of stakeholders within Amazon which are internal stakeholders and external stakeholders. Impact of ethical challenges of this company on these two types of stakeholders are analysed below-
Internal Stakeholders
Amazon considers its employees, and suppliers are their internal stakeholders. As established by de Bakker, Rasche & Ponte (2019), ethical issues like data mishandling can affect internal stakeholders by developing disagreement within them. As an effect, company has faced disruption in service provision to customers and followed by has failed in meeting commitments of customers.
On the other hand, suppliers of Amazon have experienced an issue related to a lack of adequate product information. Thereby they have not been able to deliver effective and innovative products to this company. Apart from that, because of ethical issues of company, managers of Amazon have experienced a lack of employee management and deficiency in customer handling because of these major ethical challenges of Amazon.
Besides that, Amazon has reduced their multiple numbers of supply chains so that they have faced problems in launching high qualified and multi featured products. Taking this into account, internal stakeholders have faced major problems and this company has suffered from a high level of danger because of online sales privacy related ethical issues and employee comfort regarding ethical challenges.
External stakeholders
Amazon involves their investors and customers as their external stakeholders and Amazon has found that their external stakeholders also have experienced problems and disruptions due to their ethical challenges. As inspired by Fernández-Guadaño & Sarria-Pedroza (2018), unethical activities of a company often can harm external stakeholders of this company for instance investors as along with the decrement of share value of this company, they also have faced financial loss.
As a result, investors of Amazon have suffered from a high amount of decrement of their share value from this company in the global stock market. In this account, they have experienced financial loss so that they can take an initiation of removing their shares from this company. Thereby Amazon can face a lack of budget for launching their products to attract customers.
In addition to, customers of this company have also faced financial loss and harassment as, within an online transaction, customers of Amazon often pay their payments on online but Amazon can not be able to receive payments due to unethical activities. Besides that, customers also have suffered from financial scams due to their mobile numbers which are registered in an online app of Amazon.
Recommendations for overcoming these issues
Amazon would be able to eradicate its ethical issues easily by implementing some beneficial strategies. As regarded by Saxena et al. (2019), identification of recommendations of ethical issues is essential for any company on an urgent basis as these issues can bring major and critical problems within their company. Apparently, this company also would require adopting effective approaches for preventing these ethical issues.
Recommendations for eradicating discrimination of employees
Amazon would eradicate discrimination related problems of employees by implementing the strategy of developing a complaint desk. As included by Spiegel (2018), a company can resolve its bullying problems among the employees by establishing a complaint desk as this complaint desk can take strict actions for victim employees. As a result, employees of Amazon can regain their confidence and can able to increase their working efficiency within the workplace.
On the other hand, this company also would establish a department for managing employees’ comfort so that this department can prevent the entire bullying system by effectively monitoring employees. Besides that, Amazon also would adopt an approach of developing a code of ethics and code of conduct within their workplace for maintaining the sustainability of performances of employees along with maintaining healthy relationships within employees.
Recommendations for preventing lack of health and safety measurements of employees
Amazon would prevent issues of employees regarding the lack of health and safety measurements of employees by implementing effective strategies of providing safety guidelines on the unsafe equipment and providing safety wear for using this equipment.
Thereby employees would not be able to physically injure. In this account, their motivation level and confidence level would increase and they would reduce their mistakes within work. In addition to, this company would further adopt “Work Health and Safety Act 2011 (c. 137)” and “Work Health and Safety Amendment Act 2019 (c. 147)” as these legislations can help this company in maintaining health and safety of employees within the workplace.
Recommendations for privacy issues and fake product information related issues
Amazon would mitigate its privacy issues by adopting an approach of increasing security of E-commerce. This company can further utilize “Privacy Act 1988 (c. 88)” for maintaining their data security. Besides that, they can avoid fake product information provided to customers by developing healthy relationships with customers therefore this company would not need to give fake news for attracting customers.
Conclusion
From this analysis, present study has concluded that Amazon has faced different types of ethical issues within their Australian subsidiary such as bullying and discrimination of employees, privacy issues, and deficiency in health and safety measurements. This essay has further found that these issues have an adverse impact on employees, stakeholders, this company as well as customers.
However, Ethical challenges of Amazon would eradicate by developing a complaint department for preventing bullying experience of employees and this company would secure confidential data of customers by using “Privacy Act 1988 (c. 88)”.
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