All Businesses Must Strive To Be Ethical and Socially Responsible Amid Mounting Ethical Concerns
Facebook, Google, and other social media giants keep making headlines as the world continues to learn more about what they do and plan to do with user data. To summarize the information gathering and sharing practices of these companies, they are essentially stalking everyone then selling the personal data they amass. Not only have these firms failed to consider the social, moral, or ethical ramifications of these actions, they are also developing technologies that encourage dysfunctional behavior. Ironically, most tech firms like to consider themselves progressive, as well as socially responsible and ethical, but they clearly have not actually examined the social impact of their policies and products.
Compared to the industrial sector, for example, the negative impact of the tech industry is far less obvious and, thus far, far easier to ignore. Manufacturers pollute, can easily endanger the health of their employees and members of the communities in which they operate, consume massive amounts of resources, and impact the purchasing power of consumers, among other things. When the practices and products of companies like Ford, for example, fail to address the needs of society and cater to consumer indulgences instead of leading to sustainable production and consumption, they impact a whole host of social issues. Revelations about Facebook and Google demonstrate the need for all companies in all industries to take an in-depth look at the ethical implications of their policies and practices, which requires a basic understanding of actual ethics.
Business ethics exist to ensure professionals consider interests other than opportunities for their immediate gain. This helps employers guard against unrealized and long-term fallout from improper employee behavior. One of the principle reasons for an ethics code in a business is to protect that business from the actions of employees. When employees interact with clients, other employees, or new employers, a business must guard against any perceivable damage an employee could cause. By scripting responses to consumers and the Public, limiting workplace relationships, or instituting nondisclosure agreements, employers are attempting to control long-term costs as well as sculpt the business culture within the firm and beyond. It is, however, not enough to prevent the firm from engaging in unethical practices.
Business ethics also exist to ensure a firm does not undermine the integrity and longevity of its industry. Ethics represent an attempt to address factors which cannot be fully measured or understood, to ensure success now and in the future. Although the need for ethics may appear to be a moral issue wrapped in subjective reasoning, ethics are actually a major concern for any business viewed as an enduring entity designed to last. A firm lacking ethics can only build a supposed ethics policy through a superficial attempt to ensure legal penalties exist for employees who violate company policies. As such, unethical firms can only address preconceived threats as employees will not be bound by actual ethics.
The second half of the Twentieth Century was marked by a shift in business philosophy that pushed for massive short-term profits and short-sighted cost cutting measures without taking into account ethics. Business ethics exist to help promote top quality products and/or services at the best possible price, healthy competition, and strong community relations. Without ethics, employers cannot expect employees to respect their firms, nor can they expect customer loyalty. Business ethics must factor into every aspect of business, because ethics are part of a culture that a long-term business and industry must instill into their employees. An industry without ethics, in any aspect of business, is one that earns the spurn of its consumers and eventually causes pain across the entire economy when failure is eminent.
The Baby Boomers and their children's generation learned most businesses are not necessarily loyal or ethical, thus they act solely on what they immediately perceive to be in their best interests. Employees have learned to do the same. A firm looking to instill ethics into their employees, therefore, needs to lead by example. Ethics must go beyond punitive action. A company, which treats its employees poorly, rips off consumers, and/or undercuts other firms with unhealthy competition, is going to teach employees to behave unethically. This means business ethics extend beyond employee relations to include how a firm treats its competitors across its entire industry as well as the quality of products and services at what cost the firm provides its consumers.
If an interviewee stepped into most companies and said he wanted a job for as much money as he could get, yet cared little about what the business did, he probably would not have a very good job. Regrettably, businesses do this all the time to society, sometimes with grave consequences to the firm in addition to society. When businesses are motivated solely by profit, they eventually fail or create unhealthy business environments that result in catastrophes for economies and communities around the world. While business entities have their own interests, including profit, they are run by and for people who have interests of their own. Businesses do not simply act on the interests of the company. They act on what executive managers perceive to be the company's interests and the interests of the executives.
When profit is the only motive of a business, the goal of the executives will always be profit while they will be rewarded with even larger salaries when they amass larger profits with fewer expenses. Profit, when it serves as the sole motive, success means the decision makers of a business will ignore employee, consumer, and social interests. Unfortunately, profit can be inflated when long-term and other unrealized costs are ignored or displaced onto the rest of society. After all, an inferior product will sell whether or not it is made by employees, who are treated well, in a factory that controls pollution. The same is true of services that fall short of customer expectations, unless there is a concern for future business or better alternatives.
Profit is supposed to be the measurement of how successful a business has been in what capacity it serves our society. Managers and investors have forgotten over the past two decades that a decent profit is still a profit, so massive, short-term grains are not necessary. When profit is the primary or sole motivation, a firm cannot continue to be successful. Regrettably, the immediate interests of a company's decision makers will be served by short-sighted profiteering. For ethical professionals, whose goals are to build up an enduring entity with socially responsible behavior, profit is the secondary goal. Profits represent a tool that incentivizes excellence for the benefit of our entire society instead of personal gains that fatten a handful of society’s most gluttonous.
Under profit driven models, the existence of business is rather cyclic, i.e. firms exist to exist. It is, therefore, helpful to step back and understand why society supports the existence of commerce. It is because it services the interests of communities. Only when a company exists to fulfill its role in our society can it continue to exist. Consequently, the primary motive of all businesses must be to serve their purpose better than all other firms with profits serving as a means of continuing operations in the short and long run. Socially responsible and ethical businesses focus on their long-term and broader interests, so they can ensure their long-term survival and success.
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