Week 1 Discussion

What is a business’s obligation to build an ethical culture and balance its desire for profit with ethical responsibilities to employees, customers, society, and the environment?

There is no law in place to make businesses act ethically, but a business should serve their customers, employees, and shareholders.  If a business does not play ethically, they will start to lose their customers, employees, shareholders.  Word of mouth is a big way people find out about companies, and if the company has a bad rap about being unethical, people might not want to do business there or be employed by them.  Ethical obligation is a thing all companies must do to be able to survive in the business world.  Eventually companies that are unethical in their business practices will fail; sometimes it can take some time but their business practices will come out.  If a company wants to retain good employees, then the company has to treat their employees well.  If employees see they can be treated better at a different company, they will leave.  Companies should want to keep their employees because if you keep training new employees, it is costing the company extra money.  If a company wants to retain investors, they must perform ethical business practices, because shareholders might stop investing in the company if they start to see risk.  There is a theory of social responsibility which is called maximizing profits (Cheeseman, 2010).  This theory says that corporations are obligated to take action that will maximize profits for all the shareholders.  Shareholders are made up of employees, customers, and investors.     

Cheeseman, H. R. (2010). THE LEGAL ENVIRONMENT OF BUSINESS (6th ed.). Upper Saddle River, New Jersey: Pearson Education, Inc.