Egoism as an Ethical Theory - Essay Example

Application of Business Ethics, Principles and Theories Name Institution Selected scenario: 3 Introduction In the business world, competition is natural; as a result of this and in trying to stay afloat, business owners and managers are compelled to employ different tactics one of which entails being a loss leader. By definition, being a loss leader is act of reducing the prices of certain selected commodities strategically (Daly, 2002). In so doing, the business attracts a greater number of clients who are interested in purchasing the said commodity. Though one may think that selling commodities at a reduced price will hurt the business, such a thought cannot be further from the truth. The profit margin is bound to appreciate owing to the large number of units sold during the loss leading period. Whereas being a loss leader has been described in the past as being an act of malice, it has proven to be an effective strategy in trying to lure a larger number of clients and increase the profit margin. The related businesses in the immediate environment record a lesser number of clients and their owners are compelled to rethink their strategies which may include reducing their commodity prices as well. Such healthy competition is actually encouraged in the business world. Applicable ethical principles in this scenario In our case, a supermarket owner seeks to attract more clients by offering a loss leader on a number of fruit and vegetable products. The neighbouring privately owned fruit and vegetable store owner fears that such a move will impact negatively on the store which is located at the same centre. One of the primary business ethical principles states that one must show care and concern to others (Josephson, 2010). The lager supermarket owner should bear in mind that offering a loss leader will attract clients even from the private store owner’s fold; notwithstanding the profit that the supermarket stands to gain, the private store faces an eminent foreclosure. Ethical principles also require for business owners to show a sense of fairness in their doings (CARROLL & BUCHHOLTZ, 2010). Borrowing from that, the supermarket owner is expected to show restraint even when in pursuit of a larger profit margin. Likewise, the private store owner is expected to understand the motives driving the supermarket owner; both parties have to co-exist and operate in the same business space. When setting up or running a business establishment, one must respect all those involved in the day to day activities in the business (KURTZ & BOONE, 2011). This includes both the clients, employees and to some degree the competitors. Think of a business as a way of providing the clients with the required commodities, in this case vegetables and fruits. Both the supermarket and private store owner must show restraint and above all demonstrate respect o each other. Their establishments are their sources of livelihood and as such, both parties should respect their mutual needs and operate in harmony. The parties should be committed to excel in delivering quality products to the clients. Even when faced with unprecedented challenges, this should not be used as an excuse to deliver poorly in their fields. Applicable ethical theories Egoism is an ethical theory which advocates for the fulfilment of personal objectives while minding little of the other party’s needs (MICHALOS & POFF 2013). According to Pandey (2013), “An egoist contends that an act is morally right if and only if it best promotes his interests.” In this scenario, the supermarket owner seeks to attract a large number of clients by offering a loss leader. This is a strategy that will end up hurting the private store due to the reduced number of clients that will buy vegetables and fruits from the premises. The egoistic nature enacted by the supermarket does not consider the negative effects that the private store operating in the same vicinity will suffer; instead, the supermarket owner only visualizes the profits that will be realized following such a move. The egoism portrayed by the supermarket owner may either be personal or impersonal; in personal egoism, it may be assumed that the supermarket owner only minds of his/her interests. In impersonal egoism, the supermarket owner may be actually motivating the private store owner to explore new ways of attracting clients through other innovative ways. Utilitarianism is yet another ethical theory (TITTLE, 2000). It is seen as leaner especially when contrasted with egoism. It advocates for the relaying of happiness to all those affected by our consequences. In this scenario, the loss leader offered by the supermarket owner is a much welcome move by the clients. Although the private store might end up recording losses, the greater population benefits from the loss leader in that they are able to buy more units of their favourite commodities with the same amount of money they were using before the loss leader was effected by the supermarket owner. The justification of such an action, even though it is beneficial to the greater population, is not foolproof. The private store owner suffers for the actions and might eventually end up closing shop; his/her livelihood is cut short. The most ethical action to take Having ascertained that either decision has its consequences, a way forward has to be sought; this is most likely to be achieved by weighing the pros and the cons of each move. The decision which offers more advantages as compared to disadvantages is the most viable and has to be sought. The presence of smoke only indicates the smouldering of a fire nearby; the private store owner having already confided in ne that the business is suffering adversely is a clear indication that the loss leader offered by the supermarket is an unfair move by any means. In my capacity, I will kindly reject the job offer basing my reasoning on certain scenarios as I will elaborate herein. Ethical principles stipulate that any business entity must show care and concern to other related entities. Whereas businesses are set up to rake in profits, that should be done in a modest way so as to ensure that all the parties involved have a fair chance to make money. The private store owner has needs that have to be taken care of and as such, the loss leader intended by the supermarket infringes on his/her chance to make a modest living out of selling vegetables and fruits. Although the loss leader is perfectly in line with utilitarianism ethical theory (Kant, Bentham and Mill, 2013), it should be noted that the private store owner is also part of the greater population. It would thus be immoral to hurt the small business under the pretext that the greater population stands to benefit from the loss leader. In advocating for a fair business atmosphere, the supermarket is a much larger entity and it has the capability to command more resources; this kind of power should strictly not be used to oppress the private store owner who in the real essence makes relatively small profits when compared to the large supermarket. The egoism portrayed by the supermarket is also uncalled for and further compels me to ignore the job offer. The supermarket is simply flexing its muscle at a less worthy opponent; were it introducing the loss leader to attract clients from an equally large and powerful opponent, by all means I would vouch for the move and I wouldn’t have any trouble working towards such an objective. The egoistic nature is distasteful and is only aimed at fulfilling the needs of the supermarket entity. The motives behind the loss leader are questionable; I for one do not see a reason as to why the large supermarket cowers at the competition it gets from the private store. Perhaps the services offered by the private store are far much superior in terms of the quality and quantity of the vegetables and fruits; in that case, the right move would be to match up to their standards as opposed to offering a loss leader. Going by the ethics stipulated under the business ethics and principles, the supermarket should bring forward a healthy business environment by foregoing their loss leader offer. Conclusion Business ethics and principles are set up in order to monitor the business environment and ensure that it is conducive enough to operate in. the need to make even greater profits should not be a reason to induce unfair competition amongst business entities competing against each other. The supermarket management should be encouraged to pursue more viable options in their bid to increase their profit margin. Offering a loss leader will definitely hurt the private store financially; the owner has is already feeling the effect that has been initiated by the loss leader. The private store owner should not shy away from competition nonetheless; the business principles and ethics discussed herein should guide him/her on the options that are pursuable in the face of a loss leader. Both parties must co-exist and in the same space and make the best out of their business. As much as a loss leader attracts a large number of clients to the supermarket, it is also seemingly drawing clients out of the private store and in the process frustrating the store owner. Business ethics and principles must be applied for both parties to operate harmoniously within the same environment. References BOWIE, N. E., & SCHNEIDER, M. (2011). Business ethics for dummies. Hoboken, John Wiley. http://public.eblib.com/EBLPublic/PublicView.do?ptiID=706709. CARROLL, A. B., & BUCHHOLTZ, A. K. (2010). Business & society: ethics and stakeholder management DALY, J. L. (2002). Pricing for Profitability Activity-Based Pricing for Competitive Advantage. New York, John Wiley & Sons. http://public.eblib.com/EBLPublic/PublicView.do?ptiID=130998userid=^u DUSKA, R. F. (2007). Contemporary reflections on business ethics. Dordrecht, the Netherlands, Springer. Josephson, M. (2010, December 17). 12 Ethical Principles for Business Executives by Michael Josephson. Josephson Institute of Ethics: Training, Consulting, Keynote Speeches, Materials for Ethical Workplaces. Retrieved October 3, 2013, from http://josephsoninstitute.org/business/blog/2010/12/12-ethical-principles-for-business- executives/ Kant, I., Bentham, J., & Mill, S. (2013, May 13). Ethical Theory and Its Application to Contemporary Business Practice | My Portfolio. My Portfolio | This blog encompasses my writings for personal and professional growth. Retrieved October 3, 2013, from http://ncys82.wordpress.com/2013/03/15/ethical-theory-and-its-application-to-contemporary- business-practice/ KURTZ, D. L., & BOONE, L. E. (2011). Contemporary business. Hoboken, N.J., Wiley. Mason, OH, CL-South-Western Cengage Learning. MICHALOS, A. C., & POFF, D. C. (2013). Citation classics from the Journal of business ethics: celebrating the first thirty years of publication. Dordrecht, Springer. Pandey, C. (2013, March 11). Ethical theories and approaches in business. Upload & Share PowerPoint presentations, documents, infographics. Retrieved October 3, 2013, from http://www.slideshare.net/azadrocks/ethical-theories-and-approaches-in-business TITTLE, P. (2000). Ethical issues in business: inquiries, cases, and readings. Peterborough, Ont, Broadview Press. Read More