Business Ethics vs. Pursuit for Profit

 

Business Ethics vs. Pursuit for Profit

Business Ethics, as defined by Mr. Manuel G. Velasquez in his book entitled, Business Ethics Concepts and Cases, is a specialized study of moral right and wrong that concentrates on moral standards as they apply to business policies, institutions and behavior. It is a study of moral standards and how these apply to the systems and organizations through which modern societies produce and distribute goods and services, and to the people who work within these organizations. Systemic issues in business ethics are ethical questions raised about the economic, political, legal, and other social systems within which businesses operate.

(http://blogs.ubc.ca/hinz/files/2013/10/ethics-large.thumbnail.jpg)

 

Conflict or Harmony Between Business Ethics and Business Pursuit for Profit?

I agree that the main consideration for pursuing business is profit. But that does mean that anyone who is into business has the right to employ whatever means he/she wants in order to obtain profits? Certainly, the answer is not. There is no absolute freedom for anyone to employ whatever means to gain profit, especially if those means are already classified wrong, abusive or harmful to the society and/or environment. The pursuit of profit must not conflict with the concept of what is right or ethical in the conduct of business. As discussed in our class and hereby reiterated, a person who is engaged in business must conform to certain business ethical standards for the following reasons:

1.       An argument for business ethics tells us that since ethics governs all voluntary human activities, it shall also govern business because business is also a voluntary human activity.

 

Comments: There is much greater need for ethics which shall govern the business since business involves transactions with another individual/entity who is of equal importance with the individual/entity who is initiating the transactions. In short, business is naturally a human interaction with another human being.

 

2.       Businesses require at least minimal adherence to ethics on the part of those involved in the business (e.g., the honoring of contracts by customers, managers and employees); businesses require a stable society in which to carry on its dealings: morality is a stabilizing force in the society.

Comments: Business transactions are conducted via the meeting of the minds between/among persons. Transactions could not be consummated if contracts are not honored by the persons who previously agreed to the transactions. If this happens, the society will become unimaginably unstable. Ethics is therefore a key to avoid such chaotic scenario.

3.       Unethical businesses become targets of moral outrage which works to their detriment, while ethical behavior cultivates good will and loyalty among customers and employees.

Comments: Conducting business unethically produces unfavorable consequences to business owners in terms of legal cases, scandals, loss of public trust (negative image to the society) and eventual loss of customers that may lead to bankruptcy and closure of such business. Businessmen who conduct business unethically are condemned by the society. On the other hand, doing business in the right way attracts more and more customers and employees who want to be associated with such business. This results to higher goodwill, better public image, more competent personnel, and loyal customers who repeatedly patronize products that will eventually lead to better equity and stable business profits.

4.       No studies have found a negative correlation between socially responsible behavior and profits.

Comments: Businessmen who are socially responsible do not necessarily have lower profits. One reason is because being socially responsible does not necessarily mean that a businessman must incur higher costs. There are many ways in which social responsibility can be practiced.

Therefore, I shall conclude that the business pursuit for profit must be in harmony with business ethics since good ethics is good business that eventually translates into good profit. This may not be noticeable in the short run, but probably in the long run, the effect becomes more apparent.

 

References:

1.       Text

Business Ethics Concepts and Cases, Fifth Edition - Velasquez, Manuel G.

             BUS560M SESSION 5.ppt - De La Salle University-Manila

2.       Images

http://blogs.ubc.ca/hinz/files/2013/10/ethics-large.thumbnail.jpg