The aim of this essay would discuss on whether ethics is required or optional on business. On this essay it will analyse four ethics theory, namely Milton Friedman, R. Edward Freeman, Albert Carr and Carroll. Milton Friedman and Albert Carr illustrate that ethics is required whereas Edward Freeman and Carroll state ethics is optional. After analysing these theories, it is difficult to find out that whether ethics is optional or required.
However choosing on whether ethics is optional or required would depend on the objective and personal characteristic on managers or leader. Furthermore this essay would state on the understanding on ethical behaviour or being a ethical organisation. By defining the meaning of business ethics, Crane and Matten (2007) illustrated that business ethics is the study of business situations, activities, and decision where issues of right and wrong are addressed.
Society often expects organisations to behave an ethical behaviour toward their stakeholders such as employees or suppliers. However the amount of expectation from business to the society is not clear. There have not got an obvious bottom line on whether the amounts of ethical behaviour need to achieve from business or could business avoid providing ethical behaviour in some part of business. The debate between ethics is required or optional are never been terminative.
By considering ethics in business as a whole, this essay will discuss whether ethics is required or optional on business Other theorist, Freeman, believe that management has a fiduciary duty to all its stakeholders and that the interests of the stockholder ought not to have priority over the interests of the other stakeholder (Bowie and Werhane, 2005) which know as the stakeholder theory. This is unlikely the two theories mentioned before, the concept of this theory concentrates on stakeholder rather than the Corporate social responsibilities.
By understanding this theory, it seems that business needs to certain moral obligation toward the stakeholder if the obligation would benefit the business. Furthermore, other theorist, Carroll, stated that ethical responsibilities are an optional. According to the Carroll’s four-part model of corporate social responsibilities, cited in Crane and Matten (2007), economic responsibilities and legal responsibilities are the required by society whereas the ethical responsibilities is the expected by society.
As Carroll mentioned, ethical responsibilities therefore consist of what is generally expected by society over and above economic and legal xpectations. It seems that economic and legal responsibilities are the basic need for ethical responsibilities and more important than the need of ethics. Some business would describe their behaviour is ethical in term of their behaviour toward the stakeholder. According to Bowie and Werhane (2005), manager stated that they pay taxes and provide jobs and that these activities are sufficient to meet their obligations. However it seems that this statement is misunderstanding on the meaning of ethical behaviour as pay taxes and provides jobs are their obligations, not ethical behaviour.
In term of the ethical behaviour, businesses need to provide reasonable wages, good benefits and job security for employee. On the external environment, businesses need to ensure that their behaviour is ethical, for instance support the public services. Furthermore, Bowie and Werhane (2005) mentioned that if business firm commit to supporting the community because it is profitable, then there is nothing ethical about the commitment. In conclusion, after analysing the four ethical theories, it is more likely that the major responsibilities for business are providing profit and following the law.
However it is difficult to conclude on whether ethics is optional or required on business. By choosing on whether ethics is optional or required would depend on the objective and personal characteristic on managers or leader. If managers or leaders more concern on profit and legal, then ethics is required. On the other hand, if manages or leaders concern more level of expectation stakeholder, then ethics is optional. Furthermore, business needs to understand the way of being ethics. As mentioned previously, if business misunderstands what is ethical behaviour, this would lead business become unethical.