The issue whether company should maintain high ethical standards is a controversial one. It is especially interesting today, when so many firms were caught crossing the line just in order to secure more net income. Many people believe that the goal justifies the means. Other feel that the way the company reaches its goal is more important, than the goal itself. There are several reasons why I am more inclined to agree with the latter.
To begin with - for many people and firms alike, it is very important to do business with respectable companies. Reaching not so far back, I believe that all those investment banks, that bankrupt on Wall Street just a couple of months ago, will have a hard time getting with regaining their reputation. Nowadays, because of the actions of Lehman Brothers, Morgan Stanley or Bear Sterns the whole financial market is filled with companies who do not trust each other and are not very willing to lend money to one another. Moreover, organizations in general do not like when they are associated with another company, which is known for shortages in ethical standards. Several years ago the brand TYCO was one of the most sought after in toy industry - almost everyone heard about the company and wanted to do business with. After the scandal, which revealed creative accounting practices, stocks of the company felt down and most its contracts got cancelled, mostly due to bad press.
While considering whether being ethical is important, the company also has to think about its current and future employees. People are the most vital and important assets for most companies. People are more eager to work for companies that maintain certain level of ethical responsibility than to work for one that respects nothing and no one. Very often lacking in ethical standards has a direct effect on how employees are treated. From the professional perspective, having worked for a bad company may be a potential career killer, especially in ethically aware industries.
Admittedly - there are many reasons, some of them profit related, why some companies choose not to be ethical. Even though they are able to secure more profits this way, it comes with a price. Very often bad perception of the company will hurt the firm in the long run, especially if the firm conducts business in the public sector. No public official wants to be associated with the firm of bad reputation, which would simply kill his chances for another term in the office. During the last presidential campaign, George W. Bush’s connection to oil & gas industry, known for the unethical and aggressive business practices, did not help in his reelection.
Until recently, the issue whether to stay ethical was for the company to solve. The managers had to decide which is better for the company in both short and long time frame. Nowadays, the current market conditions, laws and amount of competition practically forces organizations to behave appropriately and adhering to higher ethical and moral standards is pivotal to the firm's success. Too bad that some of those companies are very slow learners.
To begin with - for many people and firms alike, it is very important to do business with respectable companies. Reaching not so far back, I believe that all those investment banks, that bankrupt on Wall Street just a couple of months ago, will have a hard time getting with regaining their reputation. Nowadays, because of the actions of Lehman Brothers, Morgan Stanley or Bear Sterns the whole financial market is filled with companies who do not trust each other and are not very willing to lend money to one another. Moreover, organizations in general do not like when they are associated with another company, which is known for shortages in ethical standards. Several years ago the brand TYCO was one of the most sought after in toy industry - almost everyone heard about the company and wanted to do business with. After the scandal, which revealed creative accounting practices, stocks of the company felt down and most its contracts got cancelled, mostly due to bad press.
While considering whether being ethical is important, the company also has to think about its current and future employees. People are the most vital and important assets for most companies. People are more eager to work for companies that maintain certain level of ethical responsibility than to work for one that respects nothing and no one. Very often lacking in ethical standards has a direct effect on how employees are treated. From the professional perspective, having worked for a bad company may be a potential career killer, especially in ethically aware industries.
Admittedly - there are many reasons, some of them profit related, why some companies choose not to be ethical. Even though they are able to secure more profits this way, it comes with a price. Very often bad perception of the company will hurt the firm in the long run, especially if the firm conducts business in the public sector. No public official wants to be associated with the firm of bad reputation, which would simply kill his chances for another term in the office. During the last presidential campaign, George W. Bush’s connection to oil & gas industry, known for the unethical and aggressive business practices, did not help in his reelection.
Until recently, the issue whether to stay ethical was for the company to solve. The managers had to decide which is better for the company in both short and long time frame. Nowadays, the current market conditions, laws and amount of competition practically forces organizations to behave appropriately and adhering to higher ethical and moral standards is pivotal to the firm's success. Too bad that some of those companies are very slow learners.
