You are on page 1of 9

Basically organization is made to achieve goals, a company goals is to bring out profit.

In the process of to become a profitable business, a company should be tied with the
business ethics. The ethics in a business tied with all the people that involved in it
(Waddell,Jones,&George

2011 , p.132) it means ethics consist of all organization

members such as owners, directors, managers, unit leader and so on. And also all the
members should run the ethics in term of social responsibility, according to Kirk O.
Waddell, Jones,&George (2011 , p.145) the meaning of ethics in managerial life is the
basics attitude of businessthat will generate prosperity to the business and the
members. But In this modern days there are still a lot of organizations that less
concerned about social responsibility, even modern people thinks that unethical
business can be legal if it bring out a lot of profit to the shareholders. A company that
only think to get profit without concern about the social responsibility, will change the
vision of managers to think that all the things that makes a company profit is good,
otherwise it consider bad if something costs the company. Maybe this phenomena
causes from the result of Milton Friedmans statement (cited in Bejou 2011, p.1) that a
purpose of a business is to produce profits and maximize it. But in the other hand
according to Wilcke (2004 ,p.207) ethics in business is flexible and it will change over
time, this essay will explain whether managers should only chase profits or they also
should responsible to the environment, moreover this paper will also take a closer look
about morality, managers in ethical business then this essay will discuss about the
impact of ethics in term of employees, environment, other organizations and also the
impact to the consumer. Moreover this essay also describes CSR as one of the central
in ethical business practice.
These days with the high competitive of business condition to become ethics in a
business is almost impossible, even Shaw (2009 , p.565) also explain that ethics in
modern days is impossible, it is because the selfish from the capitalist or the financier.
For example a company that move their factory to other cheaper country to get a really
cheap price of employees and also taxes, in this case the company get profit because
they dont need to pay the employees a lot plus cheaper payment for the taxes, in the
other hand they treat the employees to get their maximize production and also the
government only got a little profit from the factory. This kind of example explains that
Calvin M Lantang, LACMD122J

Page 1

business intended to gain as much as possible profit but lack of sacrifice, this statement
also encourage other business to do business in unethical ways. Even sometimes to get
more profit to the company, the managers ignore the rights of the employees, such as
workers safety and also minimum wage. It is clear that we should respect the
employees with the ethical ways (Cosans 2009, p.392), it is true statement because
employees and other workers are part of our company that can bring profits to the
organization. To determine the ethics we should know first about the morality ,
according to Sandbu (2012 ,p. 99) morality in business means a system how to behave
and manner and respect value in humanity way, in closer looks morality comes out from
a pack of rules that are passed from generation to generation from culture to become a
good human being. So without morality, ethics should be hard to understand, because
basically morality useful to differentiate what is good and what is bad. But in the other
hand it is not obvious that moral behavior is financially and economically beneficial
Brown and Gossling (cited in Beurden&Gossling2008 , p. 409), but the question from
that statement is whether it bring a moral to a person or not?
Ethics defined as another thing compare to morality, based on Waddell, Jones,&
George ( 2011 , p.145) the best way to describe ethics is a moral to about what is right
or wrong.Ethics known to be a philosophy that can determine value and moral that can
decide how people behave. With this statement an ethics can be implemented in a
business so the company can decide the better option in terms of financial or in terms of
morality. A company usually faced by hard choices to be a profitable business or ethical
business, or the best choice is to be profitable and also ethical business that today
seemed hard to be done. If a company want to take a lot of profit business they likely to
forget the ethics and in reverse if a company want to run the business with ethics , it
become harder to gain a lot of profits, as Husted and Salazar (2006 ,p. 75) also explain
even if the company run their ethics in a good way, it will be harder for them to get
maximize profit. With this kind of issue, managers faced with two options, but mostly
they will choose to maximize their profit why? it is because they need to survive in their
business. But in modern days it is predicted that the business which is survive is a
business that also concern about their environment, Ahlstrom ( 2010 ,p. 12) explain that
in the future innovative, creative and also ethics business that can improve peoples live
Calvin M Lantang, LACMD122J

Page 2

by creating a useful products and services, they will survive. For example the company
Body Shops that against animal testing to their products, this will bring trust to the
consumers that Body Shop is a company that concern in terms of environmental and
then the sales from their products will increase. Caccese (1997 ,p. 9) explains
consumer pressure, high employee productivity, competition , changing social values
and fear of monetary and reputation damage from ethical breaches are the answers
from why do company only choose to maximize their profits.
Manager is the key to run an ethical business, the major role of managers in ethical
business is to run and maintain company policy, and also guide the employees to
become ethical. With the growth of ethical businesses,this will give prosperity to the
consumer and also the company itself , the consumers will have more diversities of low
price products, and also better quality. To become a managers today is really tough,
Smith (2003 ,p. 55) says that managers today is more far-reaching than ever before,
He also explain this phenomena come because, with globalization in modern era
business become pervasive and powerful, managers should face this challenges with
professional structure of work.Managers should see their business as a business to
serve the people but also at the same time get profits (balance) (Waddell, Jones,&
George 2011 , p.151), but if managers only think business as object to maximize profit
without think the ethics by doing this will lead to such things like cheat, the action of
bribe, monopoly, and so on, sometimes these kind of actions will bring disadvantages to
the company or to the managers itself, an act of bribing for example, if the company get
caught bribe an authority firm, the government will give penalties to the company or
even worse they will shut down the company. In the other hand an ethics based
managers they will bring universal benefits, and the important thing managers will get a
good reputation if they run their business ethically, reputation is the esteem or high
repute that individuals or organizations gain when they behave ethically(Waddell,
Jones,& George

2011 , p.152), so its important for managers to keep their good

reputation, because it bring a nice perception from the customers to your business and
also reputation can create brand loyalty and bring a potential costumer. A good morality
manager is a manager that can maintain their reputation and also company reputation
with honesty, integrity and also responsibility.
Calvin M Lantang, LACMD122J

Page 3

Inside the business world, to gain a profit is a normal thing, but unfortunately some
business really intended to maximize their profit by doing in unethical ways. This is
because many business using capitalism as their system. According to Shaw (2008,
p.567) capitalism leads people to find shortcut or easy way to achieve something by
activities such as cheat or deviate from the current rules. Low wages and low concern
about employees is one example of unethical business practice, that only focusing on
maximizing business profit, many businesses want to lower their cost by lowering the
payment for their employees (Synder 2010, p.188). Laborof this kind is often described
as self-evidently exploitative and immoral Van Natta (cited in Synder 2010, p.187). The
impact of this situation employees feel unsuitable to work because they get paid for less
from what they have work, this phenomena is really wrong and seems unfair for
employees, this kind of example shows how cruel is the unethical business practice. In
this case managers need to know and respect how workers feeling, respect the
workers, fair payment and if its needed ask for input towards a better business practice,
with this kind of treatment towards them, employee will feel more comfortable to works
and they will produce good quality of products or services that can maintain the
companys reputation because as Wilcke (2004 ,p.197 198) explain that scope of
ethics business is wide, we can start to run business in ethics way by treating the
employees.
Many businesses that rely their business life based on nature or even wild life
environment, the example from this kind of businesses is mineral water company thats
obvious needs water as their resource to run their company, furniture company that
needs wood as their primary resource, or even paper company that often to cut trees to
gain wood, but sometimes business that rely their fate on natural environment like to
overused their resources by wasting their production, beside that the waste that come
from the factory also bring damage to the environment, imagine if the waste from the
factory is mixture of many chemical reaction than the factory throw it to the lake, many
of natural environment inside the lake will damaged. Damaging environmental can be a
profit but it can be a boomerang to the company also, this is the statement from
Calvin M Lantang, LACMD122J

Page 4

Husted & Salazar (2006, p.81) Many environmental and social problems have a direct
impact on the firms welfare. If it pollutes, the firm can be fined and shut down, the
statement is obvious, their statement is remembering us if a managers should maintain
their reputation. Innovations that usually make business become easier to operation
often to damage the environment too for example the use of pesticides to kill pest
sometimes kill birds or another wildlife. Carson (cited in Wilcke 2004). There is also
survey about the correlation between environment and consumer based on Henley
Centre Head Light Vision Company (2007) that 31% of consumers had stopped buying
from unethical firms; 26% refuse to deal with brands they feel damage the
environment. This statement shows how consumers react to the ethical business
practice. This kind of company that less concern about surrounding environment means
they get profit by make other people or environment the victims.In conclusion it can
bring a bad reputation to the company if particular company only chase for profit as their
main goals.
There are still many cheat organizations practice that is unethical. Things like avoiding
company from the banks, paying taxes or other financial organizations, as we know
government, business partner, and bank are stakeholder that can change or influence
company decisions. It is obvious not to run away from financial organizations whether it
is in governmental handle or not, because sometimes other organizations helps our
company with their investment and we are insist to increase our return investment in a
particular time ( Ronnegard& Smith 2011, p.4) then with this case, managers should
maintain and maximize shareholder value. The example of unethical business practice
with other organizations (financial) are like company that raise their company asset to
gain more credit, then the bank without any knowledge will give more credit than it
should be , or the worse accountant or auditor that is dishonest to the company, just one
mistake with the accountant it can damage a company a lot Pamela Mar (cited in
Waddell, Jones,& George 2011 , p.152) , thats why to prevent this type of mistakes a
company should have a management with high morality whose familiar in working with
honesty, integrity, and also responsibility.

Calvin M Lantang, LACMD122J

Page 5

However consumer also becomes the victims of unethical business practice, there are a
lot of cases when company wants to maximize more profit by reduce the quality of
products or services that they are going to sell to the customer. Not only the quality of
the real products, sometimes the company reduced the quality of products by
increasing with abnormal price, or takes more time to deliver products to the customer.
This kind of example really deviate from the morality business practice, according to
Wilcke (2004, p.203) providing goods or services as efficiently as possible is exactly
whatgives others the most satisfaction. Wilckes statement is obvious giving good
services will get people attention and self-satisfaction they wanted, focusing only in
maximizing profit will lead to reduce people attention to the company.
As a managers with high morality ,they should believe to our own ability to run business
with ethics practice and as a good managers do not forget to push another managers to
differ which is good or bad for their businesses, because ethical business practice bring
value and more advantage to the organization (Waddell, Jones,& George 2011 , p.152).
Friedman phenomena to the business ethics bring debate because of his statement
( Ronnegard& Smith 2011, p.3). A company should concern and have a responsibility
with their surroundings, managers should have responsibility to become a morality
managers, so does company. Companys responsibility to their social environment
called Corporate Social Responsibility (CSR) , although the definition of Corporate
Social Responsibility still being argued but according to (Waddell, Jones,& George
2011 , p.155) CSR is a managers duty or obligation to make decisions that promote
the welfare and wellbeing of stakeholders and society as a whole, or in other words
Corporate Social Responsibility is a responsibility to the society that today become a
concept. CSR is really competent to support sustainable development, as Husted and
Salazar (2006 , p.82) explain that the strategic case of CSR to support contestability. He
also explain the example of strategic approach of CSR is by giving scholarship to the
people who join training program. CSR also known to have a power for balancing
between responsibility to a society and also gain profit beside that CSR also defined as
the central topic of business ethics. CSR is a concept that describe as a positive on
Calvin M Lantang, LACMD122J

Page 6

both sides because according to (Shaw 2008, p.569) CSR not just good for company
but also good for society as a whole. Thats why CSR is needed to be implemented
inside a company, because it brings profits to the both sides (so company can gain
profit yet responsible for their environment).
The conclusion of the essay shows Milton Friedmans statement about goals of a
company is to focusing on maximizing profit is wrong, his statement seems really
unethical at all, it is proven that company still can gain profit while also responsible to
the environment. In this essay I have argued that ethics and morality is important as a
basic to build a good company, because ethics and morality will differ what is good and
what is bad, not just for the company ethics and morality also should be implemented
on individuals especially the managers, ethics and morality will build honesty, integrity,
and responsibility to the individuals. Moreover low wages and unrespect attitude
through employees can bring drawbacks to the company,it is obvious low wage is a
unethical business practice. To respect employees is important because employees are
the frontline of our company, and if the company treats the employees in good way they
will bring good quality of products or services. Some business rely on natural resources,
damaging environmental to gain more profit is wrong, and sometimes can be a
boomerang to the company, because most people nowadays refuse to deal with
company that damage natural environment. Company should respect to their investor
also, investor is really insist to get the return investment, beside that to give the best
quality to the customer is important, because customer is the source of companys
profit. To run business with ethically , company better to use CSR concept, because
CSR defined as the central of business ethic. So the conclusion is to focus only in
maximizing profit, is unethical business practice, and company should care to the
environment and society.

Refferences
Calvin M Lantang, LACMD122J

Page 7

Ahlstrom, D 2010,Innovation and Growth: How Business Contributes to


Society, Academy of Management, August, pp 11-24.
Bejou, D 2011, Compassion as the New Philosophy of Business, Journal of
Relationship Marketing, issue 10, pp 1-6.
Caccese, Michael,S, (1997). Ethics and Financial Analyst. Journal of Financial
Analysis, January/February.
Cosans, C 2009, Does Milton Friedman Support Vigorous Business Ethics?
Journal of Business Ethics, issue 87, pp 391-399.
Craig Smith, N 2003, Corporate Social Responsibility: Whether or How?
California Management Review, vol. 45, no. 4, Summer, pp 52-76.
Husted, BW & Jesus Salazar, J 2006, Taking Friedman Seriously: Maximising
Profits and Social Perfomance, Journal of Management Studies, 43:1, pp 7691.
Ronnegard, D, Craig Smith, N. 2011. Shareholders vs. Stakeholders.How
Liberal and Libertarian Political Philosophy Frames the Basic Debate in
Business Ethics. 132 (1), 1-45.
Sandbu, M.E. 2012. On the Moral Responsibility of Corporate
Investors.Stakeholder Duties, pp 97-107.
Shaw,W 2009, Marxism, Business Ethics, and Corporate Social
Responsibility ,Journal of Business Ethics, 86,pp 565-576.
Snyder, J. 2010. Exploitation and Sweatshop Labor.Perspective and Issues.
20 (2), pp 187-213.
Van Beurden, P &Gossling, T 2008, The Worth of Values - A literature Review
on the Relation Between Corporate Social and Financial Perfomance, Journal
of Business Ethics, 82, pp 407-424.

Calvin M Lantang, LACMD122J

Page 8

Waddell, Dianne, 2011. Contemporary Management. 2nd ed. Australia:


McGraw-Hill.
Wilcke, RW 2004, An Appropiate Ethical Model for Business and a Critique of
Milton Friendmans Thesis, The independedt Review, Volume IX, no.2, Fall,
pp 187-209.

Calvin M Lantang, LACMD122J

Page 9

You might also like