ACCA Strategic Professional · Strategic Business Leader · Enabling success: talent management
Kestrel Logistics operates in a country where employing workers under 16 is legal and local competitors do so. Kestrel's board wants to adopt the local practice to cut costs, arguing that it is 'lawful here'. Which assessment is most consistent with an ethical, stakeholder-based approach to employment practices?
The board should reject the practice. Legality in the host country is only a minimum standard; an ethical, stakeholder-focused approach applies consistent group standards and considers harm to the workers plus reputational risk with customers and investors. Copying local competitors or leaving it to local managers abdicates that responsibility.
- AAdopt the practice, because legality in the host country settles the ethical question
- BAdopt the practice only if competitors' costs fall below Kestrel's
- CReject the practice, because legal compliance is a minimum and the company should apply consistent ethical standards, considering reputational and stakeholder impactsCorrect
- DDelegate the decision to local managers with no group policy
Explanation
Legal compliance is a floor, not a ceiling. An ethical, stakeholder-based view recognises harm to children, reputational risk with investors and customers, and the need for group-wide standards. Relying on local legality is a cultural-relativist position that ignores these.
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