Introduction To Business Ethics
In business ethics our goal is to do the right thing. Period. However, this isn’t always easy because sometimes we are faced with some extremely tough choices. And we don’t just serve ourselves and our customers, we also serve our shareholders, employees, communities, and country. Often different choices favor one group over another group. Choosing the best choice for the situation is often labeled moral relativism because morals are typically absolute do this or do that with no exceptions. Sometimes we do get stuck between morals and we cannot just walk away, we have to make a decision that we are going to have to live with.
As an example, we had heard that our dietary supplement may have caused serious health consequences and or death long before we stopped selling it. Who did we hear this from? Mainly we heard it from the media. Based on the information we had at the time, we believed the news stories were directed at other dietary supplements that contained similar ingredients, and they were just referencing our product because it was the most popular dietary supplement at the time that contained the ingredients. We had also questioned the MLM company president about it and we were assured that nobody was reporting health consequences from taking the product. In addition, only one of our customers had reported health side-effects from taking the product and we sold a ton. The one customer in question believe that the health problem was related to taking the product, but we knew based on the particular problem that it could not have been the product. In fact, the product probably saved their life by bringing the problem front and center.
So we were pretty sure that our product was causing virtually zero health problems and it was helping tons of people lose weight. Several people reported that it was helping them control their diabetes and lower their blood pressure. One customer asked their doctor if it was ok to take and the doctor told them that it couldn’t hurt. Overall, the information that we had is that the product was benefiting the public and not harming anybody. We stayed on the safe side and advised our customers to take the product only as directed.
Many companies face ethical choices, especially in a tough economy. Should we risk bankruptcy or lay people off? Should we accept money from the government (or give people bad mortgages) or lose competitive advantage? Should we sell this product when we know that some people will die from using it? For the last question, consider automobiles. Auto manufacturers know that some people will die because of automobile accidents, yet they still manufacture them. Does it make sense to shut down the company because of automobile accidents? Perhaps a better choice is to make the car safer and eliminate any safety defects.
It is very important to follow the law even when it is hard. Still, management at large companies have found themselves in hard situations. Should I report the correct numbers or save my shareholders from a huge loss? Remember that some company shareholders are retirees and pension plans, not just rich people trying to get richer. Still, in this case we are preventing future shareholders from a serious loss because we are disclosing correct numbers.
The goal of ethics in business is to do the right thing. We must do the legal thing. We are obligated to do the best thing we can for all of our stakeholders such as owners or shareholders, management, bond holders or lenders, our employees, the community, and our country. It is not always easy but we gather all of the information we can and make the best decision possible.