Business ethics Term Paper

This essay has a total of 973 words and 7 pages.

business ethics

The statement has been made that "ethics has no place
in business" and the implications of this statement and its
inferring characteristics provide a complex issue in the
operation of national and multinational corporations.
Because ethical decision making is often not as profitable
as choices that do not embrace ethical elements, the
perspective has emerged that the nature of an effective
business mindset inherently brings about unethical behavior.
In order to consider this statement and its
implications, it is necessary to recognize the ethical
decision-making processes of a number of companies, and
reflect upon the fiscal, organizational and operational
implications of ethical choices and then relate this process
to the perceived outcomes if the opposite choices were made.
As an element of this evaluation, it is also necessary to
consider the nature of morality and the progression of moral
underpinnings for business operations and the implications
as companies expand into multinational arenas.
Ethics can be described as: "the activity of examining
one's moral standards or the moral standards of a society,
and asking how these standards apply to our lives" (11).
The application of ethics in business is generally perceived
as the evaluation of individual and collective moral
standards, a reflection of societal morality, and then the
determination of business decisions that are not only based
on the efficacy of business operations, but also on these
moral standards. The problem that many corporations
perceive when pursuing the application of ethics in business
is that ethical choices are not always the most sound
business decisions. For example, when the pharmaceutical
corporation Merck discovered that they could research and
develop a drug that would end river blindness in millions of
people worldwide, but that there would be no financial
benefit and high costs involved with this process
(especially because those who need the treatment are members
of the poorest communities in the world), the ethical choice
to pursue this drug had clear implications in terms of
business efficacy (3). But unlike many corporations, Merck
recognized a moral obligation reduce the suffering of
millions of people, and as a result, made a costly but
ethically sound decision to pursue research, development,
production and distribution of the drug.
Many business theorists would argue that Merck's choice
may have been ethically sound, but that it did not reflect
appropriate business acumen. The choice was costly,
impacted competitiveness for the company at a time when
risking declining sales was not in their best interest, and
put the company in risk of liability (4). But the company
also had an obligation to their shareholders to make
business decisions that represented their best interests,
and the conflict between the interests of those outside of
the corporate structure and the shareholders, employees and
administrators of the company demonstrate the reason that
ethical choices are not applied more freely in the business
arena. It can also be argued that by making ethical
decisions in favor of drug development, that Merck was also
inherently making unethical decisions in terms of their
obligation to the shareholders and the standards of behavior
based in their agreed contractual relationship. Because
corporations are primarily economic institutions, the
question of whether they can be expected to apply moral
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