State why you believe it is important that businesses act ethically

1. State why you believe it is important that businesses act ethically.

I think the maintaining ethics in business is a way to keep things professional. It sets a standard for the business world and makes it where there a set of guidelines to go by. Although there are still a lot of people who don't act ethically in business world it separates the individuals and draws a line between what is right and wrong. Without drawing the line between right and wrong makes it easy to break rules in any situation. But in the business world with the amounts of money and jobs that are at stake it makes it even more important.

Acting ethically is also a way to keep things peaceful and fair. Now there are laws that prevent individuals from doing drastic things in the business world but acting ethically is a way to make everything easier to deal with so to speak. It brings a formal setting to the workplace and sets the business world apart from other professions. When you are in charge of individuals jobs and the money that they make it makes for a lot of responsibility and reliability. When talking about bigger corporations who have thousands of employees the company will implode without acting ethically. It goes back to setting a standard for the company and shows respect from the front office all the way down.

2. Some believe that a company's only responsibility is to maximize shareholder value. Others feel that an organization has a responsibility to a larger group of stakeholders. State which view you support and justify your position.

When talking about a company’s responsibilities I think it is difficult to narrow it down to just one specific responsibility. But if we are talking in terms of a company’s main goal depending on which type of company I think maximizing shareholder value is very important. I think that is where you would begin and be able to grow the value of the entire company. In a way it would be like building a solid foundation for the business and having a strong foundation would be good for all parties associated in the business. With that being said, maximizing shareholder value is only one part of the business operation.

I also think if you only focus on one thing it might ruin all other aspects of the company. I think a company should try to be strong in all aspects instead of just dominating one part of it. If you put too much of a priority on one aspect it could jeopardize other parts of the business. As far as having a responsibility to a larger number of stakeholders I think the company only has responsibilities to the company itself. I am not very knowledgeable about shareholders and stakeholders but from a general standpoint I think the company should have a responsibility to the company itself and its employees.

References:

Trevino, L. K., Nelson, K. A. (2014). Managing Business Ethics: Straight Talk about How to Do It Right, 6th Edition.

Carroll, A. B. (1991). The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders. Business Horizons, 34(4), 39-48