Currently, thinking in business and employment ethics became the major force that influences not only the extend to which corporations and firms influence the life of their workers but also the entire society. The fact that corporations become more and more important for all spheres of life is undeniable so it is of a great importance what ethics determines their behavior.
Ethics of 80th
It is the remarkable period that should be treated with the special attention since it is a good example of what ethics in employment should not be. During this period corporations and big companies discovered that their spending could be cut down at the expanse of their employees.
As the matter of fact the changes in the corporate policy lead to mass dismissals. Since there was no laws forbidding such actions the dismissals took place in may corporations cutting their expanses down.
However, together with the cut in expanses the companies experienced severe decline in profits. The main reason for that was that many workers consumed the goods of their own companies and no one will by the goods from the company that took his or his friend’s job.
According to the concept the managers of the company should do their best to increase the profits of the owners of the companies. This theory stands for the principles according to which the company is not obliged to contribute to the social issues as well as create additional benefits to their workers. According to the theory the company already pays salary to their workers, taxes to the states, provides its customers with goods for fair pay so it doesn’t need no make any further contributions.
Social obligations of the firm are limited to making good on contracts, obeying the law, and adhering to ordinary moral expectations. In short, obligations to nonshareholders stand as sideconstraints on the pursuit of shareholder interests. This is the view that informs American corporate law and that Friedman defends in his 1970 New York Times Magazine essay, The Social Responsibility of Business Is to Increase Its Profits.
Stakeholders theory was to large extend created by Bruce Ackerman and Anne Alstott and it employed by the government of the British Prime minister Tony Blear. The theory considers social orientation of the governmental policy and the protection of the rights of employees. It is also considered as one of the most prospective ethical theories for the U.S. that will make welfare and prosperity system better.
The theory has also found its reflection in business. Developed by Freeman it made major contribution to the forming of the ethical thinking that is both economically and socially efficient:
managers ought to serve the interests of all those who have a stake in the firm. Stakeholders include shareholders, employees, suppliers, customers, and the communities in which the firm operates collection that Freeman terms the big five. The very purpose of the firm, according to this view, is to serve and coordinate the interests of its various stakeholders. It is the moral obligation of the firm’s managers to strike an appropriate balance among the big five interests in directing the activities of the firm.
By making the contribution to the efficiency of the functioning of the entire society the company contribute to its future incomes, success and stability.
Thinking about the ethical theories of employment it is rather easy to come to the conclusion that major competitive advantages can be obtained by the ethical approaches that view the employee as the an important part of the entire system.
As the matter of fact, it is proven by the time that stakeholders approach is one of the most efficient. To large extend it can be explained by its demand creating power. Since the government cares about employee and the company does too, the employee is able to consume more creating healthy demand that contributes to the benefit of both state and company.
At the same time, it is easy to notice that wrong ethical approach can lead to the short-term benefits but to the long-term losses. The ethical approach determines the success of the state or a company at one or another stage.