Arguments And Analysis Of Ethical Challenges Faced By Woolworths

Answer :

HC2121 Comparative Business Ethics and Social Responsibility

Assessment: Individual Essay T3 2018/19 

Reference Style: Harvard

Introduction:

The purpose of this essay is to develop a discussion of an ethical issue in the context of the Australian business environment. In the selected case scenario, the founder and product designer of Ubuntu Baba baby carriers, Shannon McLaughlin, has claimed that Woolworths, one of the largest Australian supermarkets, has copied her product design and idea (Omarjee 2019). This essay summarizes the arguments made in the article and analyzes the ethical challenges encountered by the large-scale corporate. With my personal opinion, I have discussed whether the ethical decisions taken in the case scenario was right. I have also used seven moral philosophies defined in the class textbook in order to demonstrate the ethical decision-making process that should businesses take account of to overcome moral issues. 

Discussion:

According to the article published on 8^th January 2019, a small business owner, Shannon McLaughlin, has made an allegation against Woolworths for copying her product idea (Omarjee 2019). Shannon McLaughlin, a founder and product designer of Ubuntu Baba baby carriers, wrote on her blog on 16^th December 2018 that her product design and the idea was shamelessly copied by one of the largest Australia-based supermarkets, Woolworths. On her blogs, the product designer has alleged that Woolworths not only does copy her product name, but also imitates the design and colours of the baby carriers (eNCA 2019). In response to the serious allegation, Woolworths said that they were taking this matter very seriously and they had a meeting scheduled with Shannon McLaughlin to discuss over the subject. McLaughlin also claimed that one of the major reasons why the large corporate, Woolworths, has made it possible to sell the baby carriers for almost one third of the Ubuntu Baba price is because of using Chinese manufacturers. Ubuntu Baba, on the other hand, is a proudly South African manufacturer that has been trying hard to strengthen the South African economy by putting money back into the nation. The founder of Ubuntu Baba further claimed that they came to know after reviewing the online order receipts that Woolworths Head Office was found to have a purchase of Stage 1 and Stage 2 baby carriers in September and June 2017 respectively (eNCA 2019). According to the business analysts, it is not expected from Woolworths that possesses an objective of supporting the local enterprises to grow. It is not the first time someone has alleged against Woolworths. Therefore, the particular issue needs to be dealt with carefully in order to maintain a good brand reputation in both the domestic and international market. After analyzing the allegation made by the product designer of Ubuntu Baba, Woolworths has acknowledged striking similarities between their baby carriers and Ubuntu Baba baby carriers, and the company has taken responsibility for such big blunder. Although there was no legal framework imposed on the retailer, Woolworths confirmed that they would remove the product from their online platforms and stores. If customers wish to return their product, they will get a full refund without any hesitation.  Therefore, it can be assessed that the company has shown their sincerity towards dealing such serious allegation. 

The key ethical issue discussed in the article is about the copyright, as the large corporate, Woolworths, was alleged to have copied the design and colours of the Ubuntu Baba baby carriers, designed by a founder and designer of a small company based in South Africa, namely, Ubuntu Baba. Every company needs to apply legal guidelines to avoid design similarity issue (Quarshie, Salmi and Leuschner 2016). In this context, Woolworths has been found copying the idea of products from a small-sized local business, which has affected the brand reputation to a great extent. One of the major corporate goals of the company is to provide adequate support to the local enterprises to be able to expand their businesses further in the domestic market (Pearson 2017). However, such allegation against the large corporations in Australia indicates that the company does not follow its corporate social responsibility as per their set values and guidelines. The selected article successfully discusses key ethical issue encountered by one of the largest retailers in Australia. The Design Act, as well as the Australian Copyright Act 1968, covers product designs (Ipaustralia.gov.au 2019). In this context, despite the confirmation of Woolworths about the striking similarities between their baby carriers and Ubuntu Baba baby carriers, none of The Design Act and the Australian Copyright Act 1968 was imposed on the retailer. However, the retailer has apologized to Shannon McLaughlin and assured that all products would be removed from all their stores and online platforms. 

From the investigation carried out to find out the exact reason behind such blunder, Woolworths identifies that their designer team seeded the issue during the designing process. The company has now focused on strengthening and intensifying the training of employees, suppliers and partners to make them understand the value-based approach to the sourcing and design process (Crane and Matten 2016). It was also alleged against Woolworths that the particular retailer sold the baby carriers for almost one third of the Ubuntu Baba baby carrier price because they involved Chinese manufacturers in producing the same designed products. In Australia, companies have to pay up to $585000 in case of copyright infringement (Ipaustralia.gov.au 2019). However, the company has not paid any damages since any legal framework has not been imposed on them. Shannon McLaughlin, the founder of the company and the designer of the product, should follow the legal procedure to get compensation from Woolworths for copying the design, names and colours of the product. If McLaughlin informed the entire incident to the law enforcement bodies, then she would be recompensed for the damage.  

As per my viewpoint, Woolworths did not follow the ethical guideline in their business functions, especially product design process. Although the company has realized that their product has remarkable similarities to the Ubuntu Baba baby carriers, they have not encountered any legal issues. After realizing the blunder, the company has confirmed that they will remove all products from all their stores and online platforms, and customers will be given a full refund if they return products. I think that the particular issue was started during the product designing process. It is important for the company’s HR management to convey the corporate values and objectives to the employees, suppliers and partners (Trevino and Nelson 2016). Woolworths uses the value-based approach to the sourcing and design process. However, in the particular context, the company has encountered a failure of maintaining ethical guideline while designing the product. One of the major corporate goals of Woolworths is to provide enough support to the local enterprises to help them expand businesses further in the domestic market. Such serious allegation against the retailer shows that the company does not follow its corporate guidelines, resulting in an affected brand image in the domestic and international platform.  

It is not the first time the large-scale retailer has been accused of copying product design. For example, in 2012, Woolworths had to withdraw a range of soft drink product after being accused by Frankies, a KwaZulu-Natal based company, for copying their product line. The Advertising Standards Authority ruled in favour of Frankies and ordered Woolworths to remove the tag line or phrase, “Good Old Fashioned” from their soda range (Omarjee 2019). In 2013, Woolworths also was accused of copying the design of a hummingbird for their scatter cushions, which was previously illustrated and designed by Euodia Roets. Therefore, it has become a serious concern for the company that needs to be resolved with an immediate effect in order to achieve corporate goals and maintain a good brand image across the domestic and international market. In the selected case scenario, the company has accepted the blunder they have made recently while designing the baby carriers. I think the company, right from the designing of the product to the dealing of the entire matter, did not follow the ethical guideline. Shannon McLaughlin should have lodged the issue to the legal bodies to be compensated from Woolworths. Although Woolworths apologized to Shannon McLaughlin for such serious issue and ensured her to remove all baby carriers from the online and offline stores, they have not encountered any legal challenges. 

As found by Heyler et al. (2016), for conducting ethical decision-making process, it is important for the organization to follow seven moral philosophies, including deontology, utilitarianism, egoism, justice, teleology, relativist perspective, and virtue ethics.  An act is considered Teleology if successfully produces desired outcomes. In the selected case, the product designer of Ubuntu Baba baby carrier has not lodged any complaint to the legal bodies, due to which Woolworths escaped the permissible fines. Egoism can be defined as an acceptable behaviour of individuals about the outcomes. The research conducted by Rothman (2017) found that an egoist often grows tendency of utilizing the substitute according to the self-interest during the ethical decision-making. In the particular context, the large retailer has not taken any serious actions, apart from apologizing to the product designer of Ubuntu Baba baby carrier, McLaughlin, and valued customers of the business. 

Utilitarianism can be delineated as the uncertainties surrounding the ethical issues. Rule utilitarian investigates the individual actions, carried out as per the regulations implemented deliberately to foster the utmost utility (McCloskey 2017). Act utilitarian, on the other hand, focuses on analyzing regulations superseding action. The rights of an individual can be defined as deontology. Through the implication of this philosophy, businesses can pledge equal respect for everyone associated with the work. One of the significant philosophies often used in ethical decision-making is deontology (Drahos 2016). Woolworths has not taken all measures effectively to avoid such copyright issue. Relativist perspective can be defined as how groups and individuals use their experience to manage ethical behaviour. Virtual ethics assume that conformists should follow the ethical guideline in a specific context. Justice is another moral philosophy that promotes fairness in the ethical decision-making process (Goodpaster 2015). In the selected case scenario, neither Woolworths nor Ubuntu Baba’s founder and product designer has involved any legal bodies to resolve the issue, which I think is a major ethical concern surrounding the particular matter. It is not the first time that Woolworths has been accused of copying product design or idea. Therefore, it is significant for the large retailer to follow moral philosophies in their decision-making in order to avoid such allegation in future and maintain a good reputed brand image in the domestic and international market.  

Conclusion:

By analyzing the case study, it can be assessed that Woolworths did not follow the legal guideline in their major functions, including product design, processing and supply. In my personal opinion, Shannon McLaughlin should have lodged the issue to the legal bodies to be compensated from Woolworths. Despite being a large corporate, Woolworths was alleged to have copied the design and colours of the Ubuntu Baba baby carriers, designed by a founder and designer of a small company. Such allegation against Woolworth indicates that the company fails to follow its corporate objective of facilitating small-sized local enterprise to grow in the domestic market.