Why Lack of Moral Obligation in Business Decision Making Is Dangerous for Any Business - Essay Example

BUSINESS AND MORALITY Name Institution Course Date Morality in business decision making entails the application of moral suppositions which are based on standards, rules, codes of ethics and models set to create a favorable business environment for the business man and the consumer. This involves creation of moral ideals and implementing them accordingly in the business environment. With such an understanding, business leaders have the capacity to design frameworks for effective and ethical decision making within formalized strategies (Annan, 2012). The willingness to employ ethical values to business decision making indicates a desire to promote justice, fairness and also to prevent looming ethical problems from happening. Unfortunately, many contemporary business dealers choose the purpose of their business to be profit maximization over following the moral values that are set for a common good (Sachs, 2011). Many people tend to think of morality and business as mutually exclusive entities, but smart business means that a complete annulment 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. Business decisions should encompass morality values in order to protect an institution’s reputation, wealth position and to establish a collection of individuals motivated by a common goal. To begin with, immorality in the business arena leads to the explosion of corruption and gives rise to great loses in a business. For instance in New York, corporate fraud has become the greatest threat to economic wellbeing due to escalating cases of fraud within large and rich business companies (Sachs, 2011). Global companies are involved in numerous immoral deals but they often go unnoticed or are slightly punished through meager fines. Malfeasance was a daily issue where companies paid significant fines for insider trading, security frauds and phony accounting. The C.E.Os of many companies were the major fraudsters during that time. America’s biggest investment banks had to settle charges for violating various securities (Sachs, 2011). This instance indicates how immorality in business creates the biggest financial crisis due to unscrupulous behaviours. Because of widespread impunity, many business institutions pay a lot of money to clear fines and cases that have been taken to court.it is prudent to conclude that all this can be avoided by giving morality issues a consideration when making business decisions. This can save the business from unnecessary losses on investment (Annan, 2012). Moreover, lack of morality in business decisions may deter employee morale and thus lead to poor performance in their various responsibilities. This may lead to overall failure of a company in regards to return on investment. Employees may feel dissatisfied or rather their effort is not appreciated if moral values are not considered adequately in decision making within a business organization (Huczynski & Buchanan, 2007). A leader who observes ethics should lead people towards attaining a certain set organization objectives. As an administrative role defined by an organization, leadership involves establishing a clear vision and sharing it with others such that they work towards attaining it enthusiastically. Usually, the methods used to achieve any organizational objective need to be well coordinated by a moral and strong leader who has the capacity to balance the conflicting needs and interest of all the members of an organization (Den Hartog & Koopman, 2002). The responsibility of any executive or manager should be 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 be 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 (Huczynski & Buchanan, 2007). In addition, lack of morality in business decision making has given rise to a highly competitive market place which has ignored social responsibility, healthy living and environmental sustainability issues. Many business organizations are not honest in their production and marketing strategies. Companies that deal with fast-food industry such as oils, fats, sugar and other addictive ingredients have created insalubrious craving on foods that contribute to obesity (Sachs, 2011). This has created a population that is unhealthy and obese. This is not limited to food, mass advertising strategies has contributed greatly to numerous consumer addictions that imply large public-health costs, counting down to excessive TV watching, gambling, drug use, cigarette smoking and alcoholism (Sachs, 2011). This is as a result of unrestricted corporate issues in some nations around the world. 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 are 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). 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. Conclusively, it is prudent to note that lack of moral obligation in business decision making is a dangerous path to tread for any business. It is important to base operations upon the premises of the golden rule: treat others the same way you would want to be treated (Forbes, 2012). Managers ought to experiment holistic approaches to decision making that emphasize economic growth, community wellbeing, social responsibility and environmental sustainability. In this way, businesses will be maximizing their profits ethically by maintaining a grand reputation, foraging corrupt leadership, satisfying consumers and sustaining employees among other benefits. References Annan, S. (2012). The Future of Business Is Morality and the Future Is Now retrieved on 2nd December, 2014 from http://www.businessinsider.com/the-future-of-business-is-morality-2012-12 Den Hartog, D. & Koopman, P. (2002). Leadership in organizations. In N. Anderson, D. S. Ones, H. K. Sinangil & C. Viswesvaran (Eds.), Handbook of industrial, work and Organizational Psychology, Volume 2: Organizational psychology. (pp. 166– 187): Sage Publications, Inc. Forbes (2012). Does Morality Matter in Managing Businesses? retrieved on 2nd December, 2014 from http://www.forbes.com/sites/victorhwang/2012/10/23/does-morality-matter-in-managing-businesses/ Huczynski, A. & Buchanan, D. (2007). Organizational Behavior. Pearson Education Paul, M. (2014). Influence of Morality in Business Operations retrieved on 2nd December, 2014 from http://smallbusiness.chron.com/influence-morality-business-operations-66947.html Sachs, J. (2011). The Global Economy’s Corporate Crime Wave retrieved on 2nd December, 2014 from http://www.project-syndicate.org/commentary/the-global-economy-s-corporate-crime-wave Sachs, J. (2011). The Economics of Happiness retrieved on 2nd December, 2014 from http://www.project-syndicate.org/commentary/the-economics-of-happiness Read More