Profit maximization versus ethical behavior in business

¶ … Ethical Behavior Really Exist in Business

What triggers unethical behavior in business

The concept of ethics in business

How to influence stakeholders and shareholders to behave ethically

Why some believe that ethical behavior is essential for the benefit of business

Ethical behavior is part of the everyday life, as it is essential for ethics to be present so as to impose control over society. Not only is business a domain where ethics is required, but it one of the foremost fields needing moral principles. Because of the diverse interests involved in business, ethical dilemmas are often present and it is difficult for certain people to act depending on ethics or to act on account of their individual concerns.

What triggers unethical behavior in business

Profits are usually the main factor influencing the removal of ethics when concerning business. Focusing on the profits that they expect to obtain from a particular business, individuals are predisposed to behave unethical and exploit others with the intention of getting the most out of the situation.

There have been numerous reports in the media presenting individuals or organizations that behaved immoral.

This was made possible because of the discrepancies between various groups of people, as some proved to be more interested in their own well-being rather than being interested in that of society as a whole.

A key confusing element that individuals come across in business is the one which involves them having to choose between profit maximization and the public's well-being. It is extremely difficult to determine what is it that can change people's behavior when they are presented with such an ethical dilemma. This is regularly because people are unlikely to accept the concept of losing profits in order to better the lives of others.

IV: How to influence stakeholders and shareholders to behave ethically

It would be perfectly normal for any organization or individual that is often faced with ethical dilemmas to be assisted by someone who is experienced in decision making and who is better qualified to deal with ethical dilemmas. Shareholders often tend to be biased in decision making, as they are aware that their wealth can be put at serious risk if they perform a wrong move. In contrast, stakeholders are more likely to behave objectively when they know that their decisions will not necessarily affect their social position. Thus, stakeholders can behave more ethically than shareholders, but the downside on this is that the former have more chances of performing mistakes, as they know that the risks involved in most conditions that they encounter are lesser on their side.

In particular situations, stakeholders can feel more inclined to behave unethically, as they know that the risks involved are not decisive on their part while the profits will pay off. Shareholders, on the contrary, might feel that it would be safer for them to behave ethically, as they will only profit if all the other stakeholders will. Thus, shareholders act based on the theory that they protect their own interests by protecting the interests of all the other stakeholders involved. Moreover, shareholders can look after the interested of other stakeholders because of their certainty that their efforts will pay of sooner or later.

V: Why some believe that ethical behavior is essential for the benefit of business

A sacrifice made by a shareholder at a certain moment can materialize into profits, as he or she will have more chances of benefiting from the overall business, given the fact that all stakeholders will benefit. Henry Ford's solution when he realized that people did not have enough money to buy the cars he produced seemed to be irrational and unethical at the time when he came up with it. However, the fact that he decided to pay his employees more money eventually proved to be beneficial for all stakeholders involved in the Ford Corporation, as people gained enough money to buy cars and the company gained more customers.

One of the best solutions to incorporate ethics into business would be for individuals to combine moral principles with profits in their practices, in an attempt to please all stakeholders, ranging from customers to shareholders. An action performed by a community in particular can have a lesser or a more intense effect on all stakeholders that are part of the respective community.

Works cited:

1. Klein, Linda S. "Ethical Decision Making in a Business Environment," Review of Business 13.3 (1991).

2. Sauer, Wolfgang "Also a Concrete Self-Interest," UN Chronicle Sept.-Nov. 2002.

Linda S. Klein, "Ethical Decision Making in a Business Environment," Review of Business 13.3 (1991).

Wolfgang Sauer, "Also a Concrete Self-Interest," UN Chronicle Sept.-Nov. 2002.