Business Ethics – Anglo American Case Study

Ethics represent the study of morality and moral behavior, but it is a relative concept, and ethical behavior is usually seen as the behavior which is morally “right” and which is not conflicted with the law regulations. However, when it comes to doing business, we usually relate ethical behavior with the concepts of corporate responsibility and sustainability. Mining operations can have a big impact on the environment and on the societies where they work. Anglo American seeks to adopt fair and sound business practice. The company believes that it has an important role to play in building the capabilities of the communities where it works.  There are four well-known categories of corporate responsibility and they are usually represented in a particular order, as follows: economic responsibilities, legal responsibilities, ethical responsibilities and discretionary responsibilities. After defining the concepts of business ethics and CSR and providing some examples of good and bad practices in performing business activities, and in accordance to the aforementioned categories, we will try to analyze the case of Anglo American Company and show how it achieves the balance between economic, environmental and social considerations. Also, one of the ideas exposed in this paper is that the concept of CSR can be explained as a strategic intangible resource for gaining competitive advantage in operating a business.

Anglo American is one of the world’s leading mining companies. It is a UK public limited company and operates on a global scale. Anglo American operates mainly in the primary sector of the world economy. This, as the name suggests, covers industries involved in the first stage of economic activity, such as mining and agriculture. Anglo American operates throughout the world. It has extensive operations in Africa, where 76% of its employees live. It is also a major employer in Europe. Its Tarmac aggregates and construction products business employs nearly 7,000 people in the UK. As a primary producer, Anglo American plays an important role in the world economy.

Introduction

Despite decades of this pure stockholder approach forming the basis for discussions of corporate ethics, it is difficult to reason that corporate decision makers can completely ignore the interests of other parties affected by the actions of the corporation. In step with other theorists such as Freeman, etc., Paine (1996) is one of several scholars who have suggested business managers should employ moral thinking alongside traditional business decision-making considerations. According to Paine, existing moral obligations as human beings supersede imposed profit-making priorities.

Anglo American is one of the world’s leading mining companies and in this sector the sustainable progress which is in accordance with all the dimensions of CSR can be achieved through following practices:

• Economic development which is based on the investments dedicated to sustainable life of local communities (Epps, 1996);
• Protection of the environment, which represents the cuts on the use of natural resources and ensuring that they can be re-used (Sanchez, 1998);
• Social cohesion, which can be described as cooperation among stakeholders, preservation of the ambient in terms of culture and society and the transparency in performing business activities.

According to Hilson and Murck (2003, p. 38), sustainable development in this sector “requires a commitment to continuous environmental and socioeconomic improvement, from mineral exploration, through operation, to closure”. Therefore, we can conclude that the concept of corporate responsibility is related to the contribution of businesses to the stability of economic, social and environmental dimensions.  CSR relates to the activities of businesses, particularly in terms of their contribution to achieving sustainability. According to Hamman (2003), we are witnessing a global shift in the way that business is perceived and that is the key factor for the development of today’s corporate responsibility initiatives.