Business ethics Essay

The statement has been made that “ethics has no place
in business” and the implications of this statement and its
inferring characteristics provide a complex issue in the
operation of national and multinational corporations.

Because ethical decision making is often not as profitable
as choices that do not embrace ethical elements, the
perspective has emerged that the nature of an effective
business mindset inherently brings about unethical behavior.

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In order to consider this statement and its
implications, it is necessary to recognize the ethical
decision-making processes of a number of companies, and
reflect upon the fiscal, organizational and operational
implications of ethical choices and then relate this process
to the perceived outcomes if the opposite choices were made.

As an element of this evaluation, it is also necessary to
consider the nature of morality and the progression of moral
underpinnings for business operations and the implications
as companies expand into multinational arenas.

Ethics can be described as: “the activity of examining
one’s moral standards or the moral standards of a society,
and asking how these standards apply to our lives” (11).

The application of ethics in business is generally perceived
as the evaluation of individual and collective moral
standards, a reflection of societal morality, and then the
determination of business decisions that are not only based
on the efficacy of business operations, but also on these
moral standards. The problem that many corporations
perceive when pursuing the application of ethics in business
is that ethical choices are not always the most sound
business decisions. For example, when the pharmaceutical
corporation Merck discovered that they could research and
develop a drug that would end river blindness in millions of
people worldwide, but that there would be no financial
benefit and high costs involved with this process
(especially because those who need the treatment are members
of the poorest communities in the world), the ethical choice
to pursue this drug had clear implications in terms of
business efficacy (3). But unlike many corporations, Merck
recognized a moral obligation reduce the suffering of
millions of people, and as a result, made a costly but
ethically sound decision to pursue research, development,
production and distribution of the drug.

Many business theorists would argue that Merck’s choice
may have been ethically sound, but that it did not reflect
appropriate business acumen. The choice was costly,
impacted competitiveness for the company at a time when
risking declining sales was not in their best interest, and
put the company in risk of liability (4). But the company
also had an obligation to their shareholders to make
business decisions that represented their best interests,
and the conflict between the interests of those outside of
the corporate structure and the shareholders, employees and
administrators of the company demonstrate the reason that
ethical choices are not applied more freely in the business
arena. It can also be argued that by making ethical
decisions in favor of drug development, that Merck was also
inherently making unethical decisions in terms of their
obligation to the shareholders and the standards of behavior
based in their agreed contractual relationship. Because
corporations are primarily economic institutions, the
question of whether they can be expected to apply moral
standards that risk their economic viability underscores
what some have argued is the oxymoronic element of “business
This perspective has come into greater focus as
companies turn to multinational expansion, and enter into
communities with different standards for business operation
and differing moral standards that determine ethical
behavior in general. For example, the standards that are
embraced in the United States in terms of child labor laws
may not have the same implication in other countries, and
the question of child labor and its use has reflected
conflicting perspectives in terms of business ethics in the
multinational firm. Is it more unethical to use child
laborers in countries where this is expected and accepted
practice, and where children can assist in feeding their
families, or is it more unethical to deny them employment
from the application of American visions of morality and
standards for ethics. As more and more companies pursue
multinational expansion as a means of reducing their overall
costs, utilizing cheap labor forces and less stringent legal
requirements, the question of the decline of business ethics
and the application of an American notion of morality is
clearly problematic to the argument at hand.

Multinational corporations often make the determination
for expansion into other countries because they can take
advantage of lower taxes, fewer legal and social
constraints, and favorable environments, companies often
enter international development without a concern for
ethical determinations in their business operations. It has
been argued that the moral difference between countries
inherently maintains the ethical process for companies as
they relate to the ethics of each society they enter (for
example, child labor, cheap labor, subjugation of workers,
are all elements that might be accepted in the workforce of
Arab nations, for example, and might direct expansion into
this area). But it has also been argued that business
ethics are not driven by relativism to the community in
which the business expands, and that multinational
corporations cannot look to the individual characteristics
of the communities they expand into to drive their ethical
Business theorists often argue that there is not place
for ethics in business decisions, based on the perspective
that ethical choices often reflect little consideration for
what is in the best economic interest of a company. But to
say that there is no means of bringing together ethical
choice and business efficacy is a limited perspective on the
issue as a whole. Individuals have a moral responsibility
to take ethical action, and there is no way of denying that
corporations are made up of individuals attempting to make
both business and ethical determinations.

Business ethics, then, must focus not only on the
issues related to preventing harm to others, but also taking
action that negates the passive process of allowing harm to
happen. In the example of Merck, the company pursued their
ethical choice not because they would be causing harm if
they did not make this determination, but because if they
did not take this action, they would be allowing harm to
occur (48). Though it cannot be expected that every company
will take this kind of action, at the very least,
corporations, both national and multinational, have to
determine operational ethics that prevent them from causing
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