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The Oxymoron of Business Ethics

 

            Many people associate business and its practices with greed and love for profit, which most of the times is directly related to immorality. In this paper I will try to answer the question "Is business ethics an oxymoron?" by examining four ethical approaches: Utilitarianism, Kantianism, Virtue Ethics and Machiavellianism and their evaluation of the morality of a business. In order to answer this question in the simplest way I will discuss each of the ethical approaches in the light of the ultimate purpose of business: profit and shareholders' value maximization. This way we will find out if a business can exist by following one of these ethical theories.
             In order to answer this question we have to answer some other questions before that such as: "Why does a business exist?" and "What is its ultimate purpose?" The answer of the first question is simple: business exists to provide goods and services to whom may need them. Or in other words, to provide resources in exchange of money or other resources so people can cover their needs and continue their development. The answer of the second question has been repeated many times by our professors and parents. The ultimate purpose of business is profit maximization and share holders' value maximization. Profit maximization is the short-term goal of the business no matter if it sells a product or provides a service. Shareholders' value maximization is the long-term goal of the business. This is why a business cannot expect to increase its shareholders' value by maximizing its profits by the usage of fraud or theft. For example, if a car manufacturer starts to make its cars with cheaper materials and still asks the same price for these cars, this will maximize the profit of the company in the short-term. But this company cannot expect to increase its shareholders' value in this way because once the customers realize that these are not the same cars as before, they will stop buying them which will affect the business negatively in the long-term.


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