Business Ethics
Business Ethics
Scenario 1
A company’s primary purpose is to raise profits for its shareholders, and this includes making decisions that seek to assist in the achievement of this goal. As such, this means that the duty of a corporation's officers and employees including management and the board of governors is to maximize profits for its employees. However, it a company has to other responsibilities towards its society that are commonly referred as Corporate Social Responsibility. Nonetheless, it is paramount to realize that the corporate social responsibility as a goal of the company is secondary the maximization of profits for the shareholders. In our Company, we already have Breakfast First, a corporate social responsibility program for providing cereals to the homeless and red cross for distribution. As such, directing more money towards other CSR programs in unethical as it diverts money from the legitimate purpose of the company that is maximizing profits to other purposes.
There are two possible decisions to be made in the case; either falsify the financial statement to have the company reporting inflated value or be truthful and report the accurate valuation in the company results. Either decision made in this scenario leads to its results. Falsifying the financial statement will lead to the company being sold; workers will keep their jobs, and I will get a pay rise. However, the false records could lead to a criminal investigation in the future, and the buyers of the company will be defrauded as they will buy a company whose value has been inflated. On the other hand, the accurate report will have the employees losing their jobs and possibly lead to me being resented in the workplace. Nonetheless, I would prepare accurate statements because it is the ethical thing to do and it will not haunt me in the future. This is because it is apparent the four rationalizations commonly used by businesses and corporations to make unethical and often illegal decisions apply here, including the belief that a decision is within legal limits and that it is in a person’s or corporation’s best interests. Also, that it will never be discovered and that the company will condone and protect anyone who makes such a decision. This makes it apparent that
References
Gellerman, S. W. (1986). Why “Good” Managers Make Bad Ethical Choices. Havard Business Review, 31. Retrieved from https://hbr.org/1986/07/why-good-managers-make-bad-ethical-choices
Guthrie, D. (2012, January 2012). Paying More Than Lip Service to Business Ethics. Forbes Magazine, p. 23. Retrieved from http://www.forbes.com/sites/dougguthrie/2012/01/31/paying-more-than-lip-service-to-business-ethics/#3c86857e750c
Hoffman, M. W., & Frederik, R. E. (2014). Business Ethics: Readings and cases in corporate morality. New York: John Wiley & Sons.
Mella, P., Gazzola, P., & Colombo, C. M. (2014). Corporate Ethics within an Integrated Model of the Organization as a Cognitive System of Efficient Transformation. Advances in Business Management: Towards Systemic Approach, 34(1), 157.
