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The relationship between business and ethics is like circular logic. Upper management realizes that their existence is based on the main objective of increasing shareholders value. These managers realize that if there is a choice between navigationg their corporation through merky business practices and receiving a extraordinary spike in the profit margin or taking the high road and in return gaining a modest return on investment, the manager will more than likely choose to take his chances in the merky side of business. There are many reasons for this decision, and most will be based on the bottom line; however, in this litigious age the laws that govern corporations leave room for wide interptretations. The managers therefore can rely on its Risk Department and Legal Department to calculate the impact a strategy shrouded in unethical practices will have on the bottom line. Remember the first two things a student learns in graduate business school is:
1- "The job of a manager is to increase shareholders' value."
2- "In order to be successful in busines you have to take risks; high risks, high rewards."
The managers nowadays have been very savvy in shielding themselves from receiving bad criticism or press when it comes to unethical practices. The managers develop community initiative programs which provide a positive service for the localized, regional, or global community, and this action turns a corporation into the star of the community. Many company's management do this to accentuate their image which attracts custimers and potential customers alike to buy a product or servive. Whether it be to give free pharmaceuticals to developing countries or provide low cost oil to high need urban areas, these actions are for the main objective which is to maximize shareholders value.
Circular logic is where the logic stars at one point and travels in a circular motion until it comes back to the original starting point. In business and ethics; as cynical as it must read, the managers starting point is profits for the corpoation and formulating a strategy to achieve this objective will lead them right back to the original point. Whether the strategy is to inflate their earnings to fool the business community to raise their stock price or to help families in a devistated community, the ultimate goal is profit. Ethics is just a concern for Risk departmentss and Legal departments of the world.
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