Ethics and Environmental Economy - Essay Example

In a world where the poor are drastically more in number then the rich and where the force of the economy are more powerful than the investment by the rich to ease create viable and sufficient income for the poor is perhaps more important than redistribution of earnings. In a world entwined in multiple predicaments simultaneously, active commitment to solving the problems is conceivably more serious than charitable sharing. And in a world where some people are particularly wealthy while others are besieged, measures to improve the standard of living of the well-off are positively of lower precedence than measures to advance the welfare of the less well off.

In the past it was understood that firms could keenly follow the private good because governments would look after the public welfare. But the change in the balance of corporate and government power, with more and more control in the hands of a few corporate giants, based on the globalization of the economy, means that governments are less keen and able to guarantee suitable outcomes and the old distribution of labor will no longer work. Firms are now so powerful collectively that the private interest is expected to prevail over the public good.

In recent years, environmental performance and economic performance of the firms has drawn significant importance in the literature of business ethics and environmental economy. Some researchers have looked at the obligations of a firm to meet the goal of its shareholders, (Clarkson 115). These reports definitely have some historic implications for corporate, ecological and social activities (Epstein, 74). On the other hand other researchers have established that the economic objectives of a firm do not clash with the environmental objectives for instance Russo and Fouts (534) concluded that environmental consciousness and economic performance are completely connected in the US, with environmentally aware portfolios, attaining better returns balance That is, firms' ecological consciousness may, in fact, be definitely associated with economic functioning as environmentally oriented firm introduce its reputation among customers that are aware about environmental issues.

For instance, research through the resource based theory shows that positive reputation produced economic rents for a firm. It is, however, a reality that the economic goals of a firm-like profit maximization, may be in variance with those stakeholders and environment, above all in the short-run. A firm may consider the fixed cost acquired on waste removal, remediation, and sanitization as damaging to its productivity in the short run. Consequently, the short-term income maximization purpose of a firm may collide with what the society wants: a secure and fresh environment, and may generate a motivation for it to act in ways which are not environmentally ethical, depending on how information is spread among shareholders.

The misinformation between a firm and the society may occur because a firm usually knows more about the ecological influence of its goods, method and the waste it discharges into the environment than the community. For this reason, a firm's unethical behavior yield fee in the short run and firm avoids the costs of waste removal, relocation and environmental cleaning. Even self-interest among the management can invade their individual ethics and result in augmented unethical behavior