Managerial Ethics

Managerial Ethics
Managerial ethics illustrate a rather sensitive issue. The
recent business history has proven ethics as a rather
challenging objective of larger organizations. The
following topics / views may illustrate fundamental issues
in the current debate. The current competing views include
"Maximize Profit" and "society's welfare" .

Maximizing profits illustrate the greatest commitment to
shareholder and stakeholders. In this particular theory,
the managerial staff is only committed to maximize the
bottom-line in terms of profit: a mean to an end in order
to achieve the highest possible profits. Society's welfare
illustrates a common goods approach.

In this particular approach managerial staff attempts to
achieve a balance between the bottom-line and social
welfare of the society and employees. It is of great
interest to explore the theoretical aspects of managerial
issues and compare them to real practices.

The two above name theories assume that managerial issues
are constrained and objective; stakeholders vs. society. On
the other hand, the reality proves a rather multi
dimensional reality; stakeholders vs. society vs. culture
vs. religion vs. politics vs. diversity vs. personality vs.
globalization vs. many other unpredictable factors.
Further, both of theories appear to be better suited for
larger organizations: small businesses encounter more
immediate issues such as revenue and cash flow rather than
managerial ethics.

Most small businesses ran by savvy business people are less
concerned about ethics. Out of extensive experience in
consulting small businesses, I can confidentially stat that
I have never met a small business owner that was not
willing to take unethical actions in order to maximize
profits. Given the fact that this is not a scientific
statement, it is important to view this statement in terms
of personal experiences, which conflicts with the academic
management practices.

Moreover, there is more to the issue of ethics. Given the
fact that both competing theories consider some sort of
managerial responsibility to some one or some group,
illustrates a major weakness of both theories. Both
theories fail to point to the necessity of "perception". It
is hypocritical to expect only one segment of a society
i.e. businesses to create value or consider societal
consequences.

Thus, most business simply attempt to create a perception
of societal responsibilities rather than genuine concerns
In terms of creating profits, it is important to understand
that in practical terms, it is difficult to create social
awareness or consider social issues without being able to
prove their value to the business shareholder or
stakeholder. Thus, any managers' first priority should be
profits, Once the objective of achieving the highest
possible profits have been achieved, an organization can
effort to pursue alternate goals of societal concerns and
improvement.Some people may argue that societal benefits /
concerns may have a direct influence on the bottom line of
any given business.

However, it is important to point to the fact that it is
extremely difficult to quantify the direct impact of
societal charity work on corporate profits. It is merely
possible to use anecdotal and qualitative data in order to
assign arbitrary real value to such social actions.

Ultimately, it is important to consider the main goal of
any given company i.e. profits. It is further important to
allow for businesses to pursue and achieve their goals
before they can be expected to become beneficial corporate
citizens.

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Managerial Ethics
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