THE CHALLENGE OF ETHICS IN A PROFIT-DRIVEN WORLD 1
The Challenge of Ethics in a Profit-Driven World
Joseph Hudgens
Liberty University
ACCT 301-B03 LUO
Professor Nicole Miller
THE CHALLENGE OF ETHICS IN A PROFIT-DRIVEN WORLD 2
The Challenge of Ethics in a Profit-Driven World
Introduction
Businesses are under pressure to lead ethically given the current consumer awareness and
the need for the organizations to perform well. They must find new ways to meet the competition
due to the dynamic competitive environments. Modern businesses have been employing their
workforce from diverse backgrounds, and this has contributed the ongoing ethical challenges as
each employee comes in with different goals, values, and perspectives of acceptable behavior.
On the other hand, the customers have become very mindful of the reputation of the businesses
they support. Therefore, maintaining a profit-driven business led by ethics has become a
challenge for most organizations, both large and small, given the requirements of leading an
organization today (Hassan & Prussia, 2013).
The biggest ethical issue faced by most businesses today is that they have let profits
replace ethics as a moral guide. Consequently, they have devalued people along with the required
virtues of empathy, respect, compassion, and cooperation. The bottom-line, pragmatics have
taken over decision-making turning money from a means to an end and people from ends to mere
means. All too often, organizations have continued to show how hard it is to be ethical when
ethics get in the way of profits (Schwartz, 2013). While some businesses try to create a beneficial
impact on society, others uphold practices that put their selfish interests and profits ahead of
ethics.
Businesses that prey on human weaknesses to generate revenue find it hard to engage in
ethical practices, for instance, gun sellers whose sales increase following a mass shooting and
THE CHALLENGE OF ETHICS IN A PROFIT-DRIVEN WORLD 3
decrease with stricter gun control laws. While one might hope that firearm sellers and
manufacturers do not consciously place their profits ahead of human safety, it is clear that the
imposition of stricter gun control laws creates an economic disincentive for them. This example
shows the extent to which businesses take advantage of human vulnerabilities by putting their
profits ahead of ethics. On the other hand, most investors do not consider their investment as a
moral act but a profit-driven move. Instead of seeing the investment as a way of using their extra
money to support businesses that can serve the society best, the investors are only interested in
making more profits. They hence choose investments that will make them more money even
when the values of the companies they invest in conflict with what is moral (Sharma & Kiran,
2013).
Striking a balance between ethics and profits could become even more challenging as
government regulations continue to decrease hence encouraging organizations to test the
acceptable behavior limits. This challenge has been affecting most organizations, including Wells
Fargo, where company leadership committed financial fraud and falsely represented their sales.
However, the punishment given does little to deter future ethical misconducts. Organizations
should use money as a resource that serves the peoples' ethical ends by ensuring that society can
address everyone's needs (Sharma & Kiran, 2013). However, organizations have become so pre-
occupied by making profits that they have lost touch with their ethical obligations to society and
the world. People should be seen for their intrinsic worth; however, economies have chosen to
replace ethics hence reducing peoples’ value very little which allows them to treat them with
little respect. Prioritizing profits over ethics not only dehumanizes people but also disregards the
ethical dimensions of the problems in society (Schwartz, 2013).
THE CHALLENGE OF ETHICS IN A PROFIT-DRIVEN WORLD 4
Leading an organization is no easy task and profits have been prioritized over ethics by
the fact that organizational decisions are complex and so in most cases, leaders do not have time
to reflect on those decisions (Hassan & Prussia, 2013). Moreover, as businesses are expected to
be ethical, they have a financial goal to meet for their stakeholders. So, this pressure places them
in a position where they must choose between meeting the financial targets and practicing ethics.
Businesses today are enslaved by results and driven by the belief that they are what they achieve.
This mentality leads to unethical practices. While some might argue that it is possible to be
ethical and remain profitable, others have argued that ethics and profits are not mutually
exclusive. This is attributed mostly to the competitive business environment, which at times
tends to be brutal to businesses. It is undeniable that businesses make mistakes, but the tendency
of humans to cover them up or deny them makes it hard to promote ethics in a profit-driven
world (Vranceanu, 2014).
The unique opportunities and challenges that organizations, especially the small
businesses encounter put them in a position where they are tempted to part from ethical practices
when dealing with their stakeholders, particularly the employees. Most organizations are
vulnerable to unethical behaviors due to limited funding and resources, size, difficulties in
building a strong business reputation and relying on short-cuts. Such businesses usually lack
long-term plans and focus more on short-term plans. Moreover, lack of financial resources to
promote a formal ethical culture among some organizations leads them to adopt unethical
practices to remain afloat (Schwartz, 2013). Others even accept lower-priced contracts than they
should as there are no rules that govern their operations. Much of this ethical challenge is
brought about by the fact that ethics are not regarded as part of the decision-making process in
most organizations.
THE CHALLENGE OF ETHICS IN A PROFIT-DRIVEN WORLD 5
When experts make decisions, they tend only to consider their limited field and overlook
the consequences of their decisions on others. For instance, a marketer decides what can be done
to make sales regardless of how this would affect manufacturing, and how it might create
hardships on other departments or be harmful the environment (Sharma & Kiran, 2013). Aside
from that, individualism has contributed to the high disregard of ethics while chasing after
profits. Everyone, especially those in executive positions, usually have their own agendas which
they want to push for their personal gain. Therefore, they tend to feel bothered by the ethical
ideals that may interfere with their dealings. With such people in company leadership, the
company ends up being morally corrupt (Hassan & Prussia, 2013).
The manifestation of ethics in various organizations does not make it easy to uphold what
is right. This is mainly because; organizational leaders demand that ethics should be profitable
since if they are not, the governing body would find it unacceptable. Consequently, ethics are
reduced to external limitations imposed by the media and society. While the goal of any
organization is to make profits, growing profits ethically is also very crucial. However, this is
always a challenge for most organizations that maximize their profits unethically by slashing
employee benefits or sending their profits to offshore tax havens. Payroll in most industries
constitutes the most significant percentage of the overall company costs (Vranceanu, 2014).
Slashing the employees' expenses and taking away their benefits can create ethical issues
that can lead to poor work morale. The impact of poor morale can yield devastating results for
the organization, mainly if the business only employs a handful of workers. While cutting
employee benefits and pay to increase profits might be unethical to many people, most
organizations use this strategy since it is proven, quick and effective (Schwartz, 2013).
Companies can also compromise the quality of goods sold yet continue selling the low-quality
THE CHALLENGE OF ETHICS IN A PROFIT-DRIVEN WORLD 6
goods at the same price to maximize profits. Such actions defy ethical business practices, and
such a move can damage the reputation of the organization. Small businesses rely on the
consumers' trust and respect, and so losing both can lead to limited growth and decline in
revenue.
Furthermore, the production process has some form of environmental impact. Therefore,
most organizations that put profits ahead of ethics tend to engage in unethical environmental
practices like contamination of water, pollution, among others. For them, it is less costly to
impact the environment negatively than positively (Sharma & Kiran, 2013). A small business, for
instance, might not have a lot of extra funds to spare and so it would be less costly for it to
operate a plant that causes much pollution than to build or remodel a safer one.
Moreover, while companies are expected to follow specific environmental laws, these
laws often prevent excessive damage to the environment, not moderate or mild damage.
Unethical behavior has indeed become a norm in most businesses today, and it can cause risks to
the business and their stakeholders. The small businesses are increasingly embracing unethical
behaviors since the large organizations have set the example for them to follow. This has,
therefore, influenced their perceptions and made them more open to dishonesty. The small
businesses, in some instances, regard these unethical practices as critical to their survival
(Schwartz, 2013).
According to Melé and Fontrodona (2017), maintaining business ethics is core to every
business operation. Moreover, businesses have a moral obligation to ensure they serve humanity
by wealth and ensure they are not ruled by wealth as the Bible states in Matthew 6:24, “You
cannot serve God and wealth”. Therefore, businesses should use their economic wealth as a way
THE CHALLENGE OF ETHICS IN A PROFIT-DRIVEN WORLD 7
to create higher human ends. The Bible is adamant on the importance of promoting human
dignity; a concept that has been employed in business ethics. Human dignity is part of the Ten
Commandments, which is a set of moral duties, some of which involve human rights. The Bible
also invokes other significant business ethics, including practicing the golden rule of doing unto
others as you want them to do for you in Matthew 7:12. This rule encourages humans, including
business owners, to practice benevolence towards others (Melé & Fontrodona, 2017).
The Bible is also very categorical about environmental stewardship through the creation
story where God gave Adam leadership over the Garden of Eden. Therefore, all businesses have
an ethical role in preserving the environment by ensuring their operations do not compromise the
environment's sustainability for the future. The business domain over the universe should,
therefore, be understood as a form of responsible stewardship as this could lead to the creation of
environmental responsibility (Melé & Fontrodona, 2017). Furthermore, Melé and Fontrodona
(2017) argue that the Gospel emphasizes service in leading others. Matthew 20:27-28 states that
whoever seeks to be great must serve others. This idea forms the root of servant leadership
without which, businesses cannot operate ethically. Unless business leaders rethink their
leadership roles, the business will continue experiencing fraud, corruption and treating
employees unfairly (Schwartz, 2013). Servant leaders would put away any selfish interests aside
and ensure they uphold normative business ethics.
The relationship between profits and ethics is tenuous, no matter the definition of ethics.
Being moral is no more or less likely to be rewarded than heavily investing in research and
development or having exemplary labor relations. Therefore, ethics are not necessarily a barrier
to financial success; neither are they prerequisite to success. Corporate ethics might improve
organizations' economic performances (Vranceanu, 2014). However, they cannot be regarded as
THE CHALLENGE OF ETHICS IN A PROFIT-DRIVEN WORLD 8
critical factors to organizational success. Ethically responsible companies might report poor
performance in a decade while the far less responsible one performs exceptionally well.
Moreover, many businesses will not find themselves under pressure to cut corners if good ethics
implies good business. Basing ethical conduct on economic self-interests makes the concept of
ethics trivial. In addition to that, by equating immoral conduct with business judgment errors
takes ways the moral choice element in business decision-making (Schwartz, 2013).
It would be wrong to assume that being ethical is always cost less. There will always be
ethical challenges among businesses that put profits ahead of their moral duties. It is evident that
in such organizations, managers and employees are ill-equipped in handling ethical matters in
their work environment. According to Vranceanu (2014), the absence of moral awareness from a
normative perspective can increase the risk of employees and managers acting immorally. It can
also increase the ethical misconducts in the business organization. Therefore, moral awareness
serves as the compass to one’s ethical decision-making and moral behavior.
Organizations can no longer ignore the consequences of business ethics on their profits.
Many businesses have failed following unethical practices, especially with their employees and
top executives (Hassan & Prussia, 2013). This has hence affected the survival and reputation of
businesses regardless of their size. With the growing amount of consumer awareness, businesses
can no longer continue promoting the selfish interests of businesses that jeopardize their lives
and employees.
Conclusion
Businesses must, therefore, practice good faith as their business foundation while
engaging with stakeholders. This would mean acting honestly and according to the set ethical
THE CHALLENGE OF ETHICS IN A PROFIT-DRIVEN WORLD 9
standards as well as abiding by the law. They must also refrain from taking advantage of their
customers, employees, and others. It is possible to adhere to ethical requirements and still
achieve the needed profits. However, for this to happen, the top management must lead by
example and ensure they do not engage in anything fraudulent. They could also employ an open-
door policy where all employees can be involved in the decision-making process to help come up
with ethical ways of meeting sales targets and achieving financial success.
References
Hassan, S., Mahsud, R., Yukl, G., & Prussia, G. E. (2013). Ethical and empowering leadership
and leader effectiveness. Journal of Managerial Psychology.
Melé, D., & Fontrodona, J. (2017). Christian ethics and spirituality in leading business
organizations: Editorial introduction. Journal of business ethics, 145(4), 671-679.
Schwartz, M. S. (2013). Developing and sustaining an ethical corporate culture: The core
elements. Business Horizons, 56(1), 39-50.
Sharma, A., & Kiran, R. (2013). Corporate social responsibility: Driving forces and
challenges. International Journal of Business Research and Development, 2(1).
Vranceanu, R. (2014). Corporate profit, entrepreneurship theory and business ethics. Business
Ethics: A European Review, 23(1), 50-68.
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