There is natural tension inherent in the term business ethics - Conflicts of interest are crucial to understanding the issues driving business ethics
There is natural tension inherent in the term “business ethics.” It stems largely from the conflicts between the interests of companies and their employees, customers and the greater society (Columbia, 2001). For example, whereas society wants companies to create many well-paying jobs, those same companies generally want to limit compensation costs and raise productivity levels. Whereas customers want to purchase goods and services at low prices, businesses want to maximize profits. Whereas society wants to reduce pollution levels, businesses generally want to minimize the cost that environmental regulations add to their operations.
As a result of such natural conflicts, managers must strive to balance the needs of the company and its stockholders with the needs of other stakeholders, including workers, customers and the larger community. And managers must balance their personal needs and desires with the needs of their organizations.
Factors such as globalization, technological innovation and the quickening pace of business change have made achieving a long-lasting balance difficult. There are just too many new developments for today’s ethical standards to keep up with. At what point, for example, does using cloning technology in medical research become unethical? Are executive stock options a principled way of linking performance to pay, or do options actually encourage unethical decision-making? When does offshore outsourcing become a form of labor exploitation and a repudiation of community responsibility? The answers to such questions depend largely on the wider cultural context, a context that changes as people adjust to new social realities. In this sense, business ethics itself continues to evolve.
By examining some of the conflicts associated with business ethics in light of recent research, we got a clearer look at the state of ethics today and a better idea of what strategies can be used to improve the ethics at individual corporations. We can also develop insight into where business ethics in headed in the future.