Case Study – 1

Introduction

This case study is based on the ethical issues with the big franchise Retail Food Group (RFG). RFG is one of the biggest food franchises which have multiple stores under its umbrella it is Gold Coast based company and has a profit of over $800 million each year. It seems like all this profit and the turnover is made it through an ethical business strategies.

Key ethical issues in the case:

Being a big food franchise RFG has a reputation of the largest brand collaborator who has a lot of food companies under its umbrella. To maintain the reputation that it has the company has to resort to many processes to incur cost cutting and to meet the end results so that the market value of the company remains consistent. The procedures that the big franchise follows are highly unethical and have caused the breaking down of many families and business owners who come under their umbrella. The issues can be mainly categorized into the following:

Underpayment

To reach the final results the company tries to appoint the laborers who are highly underpaid and they resort to unethical processes like hiring employees who are here in Australia on holiday visas and who doesn’t have a proper work permit. The companies also try to hire workers from abroad on lower wages to make profits.

High royalties and taxes

The company imposes huge taxes on food products and royalties as well so the stores which are under the RFG umbrella are in huge debt trying to re-pay the royalties and taxes for the food items and so they try to manipulate their sales trying to skip the royalties and avoid taxes and which also makes it a highly unethical process for sales. Many small business owners and families have broken and they have been bankrupt. Now the situation is like that the business owners want to sell their stores but there are no buyers available and they have no choice but to keep working until their last day.