Business Ethics

*Society seems to expect a lot from business. Do you think that it is possible to balance profit and other business objectives with the goals and desires of society?

The relationship between ethics and business is a lot like a child riding a swing in a playground. I know this comparison might seem strange, but hear me out. Imagine a young boy (representing any business venture) sitting down on the plastic seat and grabbing hold of the metal chains. Once he takes a deep breath, his ride officially begins. In the business world, this particular moment in time can be equated to day one of any company’s operations.

The boy slowly begins to rock back-and-forth trying to gain the momentum to move higher and higher. Just like on a swing, the less effort he puts toward reaching great heights, the less he will deviate from the resting state. Companies that aimlessly operate from day-to-day in that gray area where egregious ethical violations are not tolerated but little attention is paid to developing superior ethical practices are almost predestined to remain in this steady state.

Moving ahead, let’s pretend that the boy in our example is looking to maximize his enjoyment. Each time he moves forward, he comes closer to his ultimate goal of kicking his feet above the top bar of the swing apparatus. Similarly, companies are comprised of employees who ultimately want to do what’s best for every possible stakeholder affected by the business (in theory). As such, firms try to do everything in their power to reach this highest of highs.

Unfortunately, just like the boy who cannot stay at the peak of his swing for more than an instant, it is next to impossible for a company to maintain a perfect high. There are too many variables involved in running a business (pursuit of profitability, imperfect people, lethargy, lack of focus, etc.) to ever count on continually improving from year to year. And, just like the swing can only go to a certain height before it gets out of control and whips around the top bar, there is a limit to the perfection that any business can attain.

At this point, the business has to fall back. In practice, this is where my analogy fails. Companies that aim to reach the highest ethical standards will rarely err so off-course as to hit rock bottom in the ethical arena (the apex of the backswing). Also, one could find fault with the fact some companies never intend to be ethical and thus would never hit an upswing of ethical activity.

In the end, this imagery proves to me that it is possible to continually balance both profit-minded and ethical concerns as long as the stakeholders avoid criticism during the less-than-optimal periods.

*Why might it be unethical for a company to market a product that may be physically harmful but economically beneficial (as in the case of some pesticides) in a less developed country when it is still legal to sell that product outside of the firm’s home country?

History has shown that less-developed countries are willing to cut ethical corners in order to catch up to the economic leaders in the world marketplace. Whether they are jeopardizing the health of future generations, rewarding a few at the expense of the masses, or simply taking payoffs from firms to help increase sales, these countries have little incentive to stop progress in the name of ethics.

As a result, the door is left wide open for companies with the capability to sell to these 3rd World countries. Essentially, the companies can cut corners as well with the products and services they offer since the bar has been set so much lower in these countries. They can hire child labor, exploit natural resources, or poison the people and their lands (as is the case in this example). It should be mentioned that some companies do not have the means to offer products of the highest standards. Regardless, they have the ability to cease operations altogether and should therefore not be given a pass.

Consequently, I believe that any time these firms choose to operate at the baseline acceptance level dictated by the country in which they are selling, instead of at the highest levels known on the planet, they automatically inherit an unethical label. One could argue that government should step in and stop these dangerous practices. And while this is true, it does not forgive the unethical transgressions of the company; it merely extends them to the nation’s government as well. [To a lesser extent, in my mind, since 3rd World governments are ostensibly just trying to make a better life for their people.]

Shame on those companies that operate this way. And shame on the governments that allow it. But human nature almost makes it inevitable that this will continue for centuries to come.

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