Page 55 - Business Principles and Management

Unit 1

is caught in the dilemma of revealing the future
plans of the company versus ensuring business
as usual. Philosophers have debated the issue
of right and wrong for centuries. One well-
known approach is to ask the question: What
is the value or worth of a specific behavior for
society as a whole? The best behavior is that
which does the most good for the most people.
For example, assume a company employed
200 people and it eliminated 50 people so that
PHOTO: © GETTY IMAGES/PHOTODISC. retaining their jobs.
it could continue to operate. Although 50
people were left jobless, 150 benefited by
Businesses are constantly faced with ethical
dilemmas of various kinds. Should a lumber
company cut down a forest if doing so would
endanger a rare species of bird that nests there?
Should oil drilling be permitted off a coast,
thus destroying its natural beauty? Should
a manager accept a request by a foreign official
to arrange for his daughter’s admission to an
Offshore drilling is an important American university if the company wants to land a contract? Should a business
source of crude oil. Can you hire a woman to win support from women’s groups? How businesses handle these
name some environmental issues determines whether they are acting in an ethical manner. Notions of what is
drawbacks of offshore drills? right or wrong change over time. Answers often are not clear-cut.
Because values also differ among nations, problems sometimes arise for firms
involved in international business. Firms have to choose between the ethical
practices of the foreign country and of their home country. For instance, it is an
accepted business practice in Japan for employees to give expensive gifts to their
bosses. Such behavior in the United States is generally discouraged. Should an
American company behave in Japan as it does in the United States, or should it
follow the Japanese practice? Answers to such questions are not readily appar-
ent, and managers have to find ways to reconcile conflicting goals.

CHECKPOINT
Describe why ethics is important to a business.

Social Responsibility of Business

A question often raised is: What is business’s responsibility to help solve soci-
ety’s problems? The answer is not simple, because the profit motive of a busi-
ness often collides with what is good for society. Should businesses accept lower
profit, for instance, in order to keep jobs in a declining community? In such cases,
businesses must decide for themselves what is right and wrong.
The primary goal of business is to make a profit for the owners. Businesses
cannot survive for long if their owners are not rewarded for their investment.
Although profit plays a key role in our business system, businesses today also
emphasize another business goal—social responsibility. Social responsibility

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