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Ethical Situations In Business Essay

1484 words - 6 pages

Ethical Situations in Business
The chief goal of any successful business is to increase shareholder wealth. As a result, the vast majority of business decisions are driven by the basic objective of increasing net profit. These types of decisions are supported by financial data, and are often pretty straightforward propositions. For instance, if a company can gain efficiency via a more automated workflow, it may be able to reduce labor by 10%, thus decreasing operational expense and increasing profit. While these types of decisions are relatively easy for business leaders to agree upon, there are decisions to be made in regard to a company’s social responsibility that are much more ...view middle of the document...

The grocery store chain could have taken action to improve financial performance in high-crime areas, but instead chose to close stores. The grocery store chain could have taken action to help feed the hungry in their community, but again chose not to do so. The basis of these decisions were strictly financial. While these decisions may or may not prove to be in the long term financial best interest of the company, there are other considerations that may have yielded better outcomes. These alternate decisions are primarily focused on the good of the community where the company does business, and can yield both direct and indirect results that also support the financial well-being of the company. There are countless ways that a company can be a more conscientious member of the community. These can include employment practices, charitable donations, establishment and/or participation in non-profit organizations, and sponsorship of community events. However, these options do not always offer a clear cut alignment of social responsibility and corporate finances. Since company Q’s actions are a clear indicator of its emphasis on decisions that are exclusively revenue driven, I will focus on three actions that could lend credibility and change the employee perception regarding the link between the two seemingly opposite objectives. This shift in individual employee perception is the key to the desired shift in organizational attitude and policy.
The first action that Company Q could take to improve the attitude toward social responsibility would be to more effectively communicate with its employees regarding their role within, and dependence on the community. For instance, it is critical that both management and frontline employees understand that their future employment is dependent on the revenue generated by customers in their community. If Company Q has a poor reputation, it is more likely that shoppers will choose to spend their money at one of the competing grocery stores. This obviously will have an adverse effect on employment, as Company Q is forced to react to continued reduction in business by reducing staff, or even closing its doors for good. The perfect example of this would be to cite the two stores that recently closed in high-crime areas. These could serve as examples of why price and service may not necessarily be enough to solidify a robust customer base and guarantee profits. It is also very important to earn an identity as a company that is an integral part of the community, a company people want to do business with. This alignment between company and community values, could mean the difference between flourishing and folding. In addition, this relationship starts with every employee understanding their role. Once the employees of Company Q understand the correlation between good will within the community, the corporate bottom line, and their future employment, they will be more likely to make choices that support policies of...

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