Business and Morality - Essay Example

BUSINESS AND MORALITY Institution: Date: The term morality refers to conformance to a certain recognized system of rules, doctrine or code of what is wrong or right and thus behave accordingly. In business circles, morality may allude to conscious effort to guide the conduct of a firm or its employees by reason based on both fairness and religious beliefs. Although no system of morality is universal, everybody agrees that that it is what the majority at present, like while what they dislike is assumed to be immoral (Annan, 2012). One of the greatest debates in the contemporary business world is world is whether or not morality matters as far as running a business is concerned. Many stakeholders often like to frame this question as follows “should the purpose of a firm be towards the common good, or towards maximization of return on investment within the confines of the law?” Many people tend to think of morality and business as mutually exclusive entities, but smart business means that a complete divorce of the two will ruin their establishment in more than one way. Some of the ways through which a departure from morality could ruin a business could range from eroded employee morale to damaged public relations. There are two conventional correlations between business and morality. Either, the firm can make decisions to run its operations to maximize investor returns within the law, but ignoring everything else, or the firm could strive to towards societal good. The earlier correlation implies that the government sets the playing field and rules, while the firm plays the game to the best of its abilities. The later correlation implies that businesses should be held to moral standards just like individuals. These two approaches to business morality are inherently flawed and myopic (Callahan, 2014). Instead, business morality should entail looking at firms not as entities, but as a collection of individuals because individuals are always motivated by a common goal. I am for the opinion that the responsibility of any executive or manager is to define the purpose of and instill loyalty in the subordinates and consumers. This implies that business decisions should be made for the good of the organization rather than the personal advancement of those making the decisions. Loyalty in both consumers and employees can only be achieved by treating them right and in accordance with the prevailing set of moral codes. The staff, for instance, should kept satisfied as opposed to viewing them as production inputs (Paul, 2014). Workers in the management staff should be keen to satisfy multidimensional moral codes such as responsibility to all stakeholders so as to ensure continuity of their careers and the success of the firm. Often, the multi-faceted moral codes present various issues that have to be handled through reconciling many competing obligations. Just because the global corporate world, at present, is a highly competitive market place does not give firms a license to forsake the moral codes that build the fabric of humankind. There are those that claim that any concerns of a business apart from maximization of profits is a desecration of fiduciary responsibilities. However, I am for the opinion that a business can still remain profitable (and even break profit ceilings) while still adhering to the set codes of conduct and ethics in its operations. The contemporary corporate world is being impacted upon by a massive megatrend of corporate social responsibility and sustainability (Paul, 2014). I believe that any firm that makes business decisions based on the ethos of CSR and sustainability has passed the threshold of morality in business. Therefore, any organization that maps its path with an ethical compass will be bound to improve its reputation and brand tremendously this would be as a result of the fact that consumers would sense the allure of good intentions in the activities of the organization (Forbes, 2012). As a result, the firm will be in a position to build up a loyal consumer base, which will guarantee sales. Guaranteed sale margins would obviously translate to better revenue and profit margins, which implies that the firm will be in a position to meet its fiduciary obligation to the investors. As a result, an organization would lose no ground in pursuing its goals and obligation through the morally upright path. In any case, good business ethics, as mentioned, improve the morale of employees tremendously. This is not without its benefits. For instance, employee motivation reduces employee turnover which implies that the company does not have to spend a lot on recruitment and selection. Also, the firm will be able to attract and hold on to the best talent and experience in the industry. Moral business practices increase the appeal of the firm to prospective employees, which enhances the wealth of talent in the recruitment pool. In any case, the productivity of the employees will be improved significantly because they take pride in their tasks and obligation, and the fact that they will be proud to be associated with the firm. Just because there is money involved it does not mean that firms cannot base their operations upon the premises of the golden rule: treat others the same way you would want to be treated (Forbes, 2012). The aim of any business is to make profits and generate wealth for the investor, which is a moral end in itself. This is because the survival of individual humans depends how they create, preserve and use wealth (Younkins, n.d). However, this should always be done within the limits of morality. Any departure from such codes of conduct will attract abhorrence from stakeholders and partners which could lead to collapse of the establishment. A good example of why morality and business are inseparable in these times is what happened to Nike in the 1990s. Nike outsourced its production to low cost labour location in south Eastern Asia but did not stipulate moral and ethical standards that its contractors should adhere to. As a result, they departed from morality in pursuit for higher profit by condoning child labour, low wages and detestable working conditions (Hancock, 2008). The Nike sweatshop crises almost brought the huge firm to the ground and it took a U-turn by the firm on morality and ethics to turn the fortunes around. References Annan, S. (2012). The Future of Business Is Morality, And The Future Is Now. Viewed October 11th, 2014. http://www.businessinsider.com/the-future-of-business-is-morality-2012-12 Callahan, D. (2014). The Cheating Culture: Why More Americans are Doing Wrong to Get Ahead. Harvest: Orlando. Forbes (2012). Does Morality Matter in Managing Businesses? Viewed October 11th, 2014. http://www.forbes.com/sites/victorhwang/2012/10/23/does-morality-matter-in-managing-businesses/ Hancock, P. (2008). Nike’s Satanic Factories in West Java (Indonesia). Viewed October 10th, 2014. www.cleanclothes.org/companies/nike9-96.html. Paul, M.J. (2014). Influence of Morality in Business Operations. Viewed October 11th, 2014. http://smallbusiness.chron.com/influence-morality-business-operations-66947.html Younkins, E.W. (n.d.). The Reality and Morality of Business. Viewed October 11th, 2014. http://rebirthofreason.com/Articles/Younkins/The_Reality_and_Morality_of_Business.shtml Read More