Ethics in Business - Research Paper Example

Ethics in Business: the Blind Leading the Blind, or Simply a Case of Divided Loyalties? Business Ethics, in the common mind, is something of a oxymoron. The tradition of the ruthless business leader doing everything he can for an easy buck pervades American culture, from media portrayals to board games like Monopoly. Yet through all this business leaders actually function in a fairly strictly controlled ethical space: they have goals that they are encouraged, even forced to meet, but not at any cost. Business leaders must conform to a variety of pressures in terms of ethics. These pressures include laws, missions statements, statements of values, ethical standards imposed by a professional association, industry standards and so on. In some ways these constraints make the task of a business leader much easier: they are able to pursue their goals with unregulated zeal as long as they function within well defined ethical boundaries. At least that is true in an imagined, ideal space. In the real world, however, business leaders often have broad leeway to either follow or fail to follow those guidelines, and the guidelines never cover all possible situations: it still comes down to a business leader to make ethical decisions without great external guidance. A close examination of the ethical space in which a business leader operates, including those who he has an ethical obligation to, demonstrates that while business leaders face a sometimes complicated ethical landscape, a few simple guiding principles of ethical philosophy can help clarify the qualities and actions an ethical business leader must hold dear. One of the most important qualities a business leader must have to remain ethical is the ability to maintain divided and often contradictory loyalties. When though about most basically, a business leader is often a middle person between two other groups who have mutually opposing desires: board members who would like maximization of profits, and employees who want to maximize their own value for work. If imagined in the utmost simplicity, share holders would prefer that all work be done for free so long as the quality remains sufficient, and employees would all prefer that they get paid for nothing, and these are incompatible goals. One of the fundamental problems for a business leader is how to treat both of these groups ethically. Many business leaders have a fiduciary responsibility to stock holders to maximize their profits while also having an ethical, legal, and often business interest in keeping the workforce happy and healthy. There have been several suggested solutions to these problems, which would allow a business leader to think of these competing interests as part of the same goal. Amongst the most prominent of these is stakeholder theory. This theory essentially states that many of these conflicts can be dealt with theoretically by imagining everyone involved as being “stakeholders,” whose interests must be collectively guarded (Boatright 2006). This theory, however, suffers many flaws. Firstly, it can have a paralytic effect (Heath 2006), because it does not deal with the fact that individual stakeholders will still have competing goals. Furthermore, a manager attempting to use stakeholder theory will have to consistently adding layers of stakeholders, because essentially, everyone is a stakeholder in every process that a business engages in. Citizens of towns are stakeholders because trucks use their roadways, and people in Japan are stakeholders because carbon waste affects their climate as well. So these theories cannot allow a business leader to sidestep the complications of vying interests, and thus a manager still must possess the ability to decide whose needs are greater or need to be respected more in a particular situation. The most important quality for any ethical leader to have, however, is simply critical thinking. This is because the fundamental aspects of morality have already largely been figured out through the process of pure reason, hundreds of years ago. The noted philosopher Emmanuel Kant wrote The Fundamentals of the Metaphysic of Morality over two centuries ago, and in it posited two basic principles that, when followed, will always lead to ethical decision making. The first of these is that one must always treat another person as an end unto themselves, and never as a means, and the second is that one must behave in such a way that one’s actions could and should be a universal maxim (Kant 1785). These principles can always help lead to the best ethical decision, and it then becomes the role of a business leader to figure out how to best apply them to a given situation. It seems at first that these goals are fundamentally incompatible to a business nature, where people are almost universally means to other ends. I would argue, however, that treating people as such would never be ethical and a business leader must thus have the ability to stand up against pressures that would force him or her to do so. For instance, laying off part of a company seems at first to be treating people as a means. But this would only be true if the layoff was unnecessary, or would only lead to short term and ephemeral gains. If the future of the company is at risk, then it is not a means of an end to lay a portion of it off: to keep that portion on would thus be endangering the jobs of many more people, and it would thus be treating those employees as a means to an end (keeping the current people employed) rather than vice versa. An ethical business leader thus must use simple universal precepts with skill and finesse, and in doing so can make the most complicated ethical business decisions. These qualities can easily be seen in different kinds of business leaders. Steve Jobs seems to always try to put his customers and workers on the forefront – Apple is a famously positive place to work, and millions enjoy Apple’s consumer products. Apple has, for most of its history, held itself to high environmental standards, keeping the interests of a variety of stakeholders, including non-customers, in the forefront. Burnie Madoff, however, is the quintessential unethical business leader. He built a corporation whose only purpose was to take money from people to make himself rich. This takes no stakeholders into account, and treats everyone as a means to an end. There are many challenges to being an ethical business leader. Chief amongst these is the varying demands of people with vastly different interests. A business leader must thus be able to balance different interests when making ethical decisions. More than that, however, an ethical business leader must have a strong critical thinking sense, and thus be able to apply basic ethical principles, such as those posited by Kant, or those in mission statements or almost anywhere else, to complex situations. Works Cited Boatright J (2006). “What’s Wrong – and What’s Right – With Stakeholder Management” Journal of Private Enterprise 21. Pp. 106-130. Heath, J (2006). “Business Ethics without Stakeholders” Business Ethics Quarterly 16. Pp. 533-557. Kant, E (1785). Fundamentals of the Metaphysic of Morals. Read More