Icelandic Freeze, Business Ethics Essay Sample

Published: 2022-03-11
Icelandic Freeze, Business Ethics Essay Sample
Type of paper:  Critical thinking
Categories:  Business ethics
Pages: 7
Wordcount: 1717 words
15 min read

Employers are at a more considerable advantage of taking advantage of their employees. As the owners or managers of the organizations they use threats such as loss of their jobs so that employee can accept unsatisfactory working conditions, low wages, take task which they are unqualified for, carry out unethical business practices, compromising industrial safety rules, tolerate abuse such as sexual harassment among other malpractices ( White, 2014). Employers may also engage in illegal hiring procedures such as hiring illegal immigrants or underage, to evade cost of production they may participate in several business malpractices. This paper explores various ways Josh Garret, the head of packaging and distribution at Biotech Health and Life Products, manipulates employees from Iceland to cut production costs.

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An ethical issue is a conflict of right (moral) and wrong (unethical), where a person or an organization is forced to choose between the two. With exceptional employee performance, it is difficult for a manager to terminate him or her, yet this happens quite a lot. The importance of international business ethics has risen steadily in recent times due to the growth of global businesses. Technological advancements such as the internet have made international trade more viable thus giving companies an opportunity to expand and gain more from the new markets. Just as domestics' ethics have grown in importance so are the international businesses. The issue with global business ethics lies with variations in cultures, and that different nations hold different standards of law and ethics. Many companies tend to adopt the policy of cultural relativism; they take on business ethics practiced in that specific country instead of carrying their business ethics across cultural boundaries.

Due to the increased expenses in unskilled labor in Germany and the increase in distribution cost across Europe and North America, Josh decided to search for alternative ways to cut cost in the organization's expenditure. Any organization would look to minimize damage and improve its profit, and as a manager that is way his responsibility. Relocating most of his distribution and packaging to Iceland from Germany would cut the cost of shipping and production since the country is a half way the Atlantic route. However, this decision would mean that Josh would be forced to employ young people between the ages of fifteen to eighteen who could work for 40 hours a week and he could negotiate a lower wage. This would also mean that he would have to lay them off once they turn 19 years of age before the 'worker's contract has to be renegotiated. Iceland has no specific minimum wages for all it professionals however salaries are determined by collective bargaining agreement with professionals, for a person to work full time they have to be 18 years of age and at that age, the worker's contract has to be renegotiated.

A company's ultimate goals are to increase profit by cutting off unnecessary cost; While most company's do so ethically, others do so at the expense of others such as slashing employee expenses (Gilbert, 2000). Josh approach in cutting distribution and production cost is ethical considering that he is taking advantage of the low wages in Iceland and the position of the country to reduce expenses. Many organizations fail to maintain a balance between profitable business and being ethically responsible; it was Josh responsibility to continually evaluate several ways in which he could have cut the steadily increasing cost of distribution at the location in German. In doing so, he was supposed to ensure that he does not cross too far over the line where he could face legal repercussions that could end up being costly and cost the brand heavily.

However, Josh decided to take advantage of the labor laws in Iceland proved unethical. Since the business maintains its policy of ensuring fair wages depending on the country, Josh is trying to take advantage of the system to exploit the employees. Laying off employees because one wants to evade extra expenses is unethical. Higher labor cost will negatively affect the organization financially since unskilled workers in Iceland are paid much higher wages than other parts of the world once the workers go to the collective agreement. Josh's reason is justifiable. However, it is not reason enough since he already knew the outcome of his relocation before settling in Iceland. One of the most significant problems that international business code of ethics face is that employment standards differ from one country to another. An unethical practice that is banned in a developed country might be perfectly okay in a different, less developed country. This allows international business to set up distribution plants in less developed countries that have a less strict rule just as Biotech had chosen. Therefore, for organizations to adhere to the international business code of conduct, there must be some legal agency that investigates and prosecutes any form of breaches of ethical employmentethical standards.

In a perfect world, employees and businesses would always practice what is ethically right, unfortunately; in the real world, ethical dilemmas are a common occurrence in the workplace. This is where a person makes difficult choices, where they have to choose between a moral and an immoral act (Lipman, 2016). Josh is faced with an ethical dilemma of closing whether to lay off employees before they reach the age of nineteen years where their contract has to be renegotiated which will in return harm the organization financially or agreeing to keep the employee and carry the burden. He can also choose to relocate the distribution plant to a different country where unskilled labor is much less than in Iceland. Josh feels that it is not fair for workers in Iceland to earn much more than workers in other countries such as Germany and the United States. Employing teenagers in Iceland is noble however laying them off after just three years of work is unethical. Josh should find ways to negotiate the salaries with his employees in such a way that it will not cost the organization a lot financially.

Moral relativism is often viewed with skepticism since the dominant view is that morality is universal and that ethical principles apply to everyone and everywhere. Moral relativism means that there are moral principles that do not apply to everyone or everywhere. It is the thesis that moral judgment is relative to the culture and personal preference (Quintelier & Fessler, 2013). It explains a more realistic perspective of why different cultures can view the same issue differently. While on the other hand moral universalism can be considered to be in an ideal world, it is a meta-ethical position that morality or ethics apply universally, regardless of culture, sex, race, nationality, religion and other distinguishing features. The moral law is rooted in natural human condition, and that universality is part of the very meaning of morality according to philosophers. They also argue that morality is by definition universal therefore if a rule is not universal, it seizes to be a moral rule. However, these arguments are based neither on labeling an action right or wrong; they delve more on into the essential meaning of theory.

Determining the most ethical choices can be exceptionally difficult, a universal approach is because if something is not right in one place or person, then it is isn't either anywhere else. This case scenario illustrates ethical universalism since the organization is international; this approach is used in cross-cultural situations (Shweder, 2006). This universal approach simplifies the decision-making process for management, and lengthy debates and reflections may not be necessary. Josh should decide to lay off his employees in an attempt to cut cost is unethical since he cannot do so in most countries including the United States or Germany. Therefore, regardless of the laws in Iceland being a bit flexible, I do not mean that the employees in the country are subject to exploitation. Moreover, global regulations and national laws may make specific choices compulsory, but it does not mean decisions that are least spelled out they can be ignored. The universality of business ethics ensures that equal standards for all employees and other affected activities.

Biotech adopts rules and regulations that are spelled out by the individual country that they set up their distribution plants on, that means that their morality varies on local norms and values. This is great respect for validity and respect of diverse cultures. Nevertheless, business that subscribes to ethical relativism may adhere to ethical standards that have a habit of to applying across boundaries such as workers' rights concerning their safety and fair pay. That means that moral relativism should not be an excuse to accept poor working conditions or low wages. Therefore, Biotech should not give a reason of lack of regulations in Iceland to exploit teenagers by paying them below minimum wage and laying them off before they become of age to demand fair pay (Oswalt, 2010).

The fact that Iceland has a high minimum wage compared to other countries is highly dependent on a country's standards of living. If the cost of living is high, then the workers should be paid better to keep up with the economy. The fact that the firm benefits from low wages from teenagers it should not be in a position to complain while paying a higher salary to adults. The organization should find the balance where they can conduct their business ethically and at the same time minimize cost. Ethical dilemmas can be difficult to grapple with; therefore, it is the duty of every organization to have explicitly spelled out ethical guidelines to help employees identify unethical behaviors and penalties for infractions. Countries should also try to provide guidelines and laws that prevent international organizations from exploiting its citizens for cheap labor.


White, J. (2014, October 6). Ethical Business vs. Maximizing Profits. Retrieved February 17, 2018, from

Gilbert, J. (2000). Sorrow and Guilt: An Ethical Analysis of Layoffs. SAM Advanced Management Journal, 6-24.

Lipman, V. (2016, June). New Global Survey Reveals The Most Ethical (And Unethical) Countries To Do Business In. Retrieved February 2018, from Forbes:

Oswalt, A. (2010, November 17). Kohlberg's Theory Of Moral Development - Part II. Retrieved February 17, 2018, from

Quintelier, K., & Fessler, D. (2013). The moral universalism-relativism debate. Klesis Philosophie experimentale, 6-14.

Shweder, R. (2006). Relativism and Universalism. 2-10.

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