Good Ethics in Good Business Assignment Example | Topics and Well Written Essays - 3000 words

Good Ethics in Good Business - Assignment typeThere atomic number 18 conflicting studies regarding the link between good ethics and profitability in the misfortunate term, however, it does appear that good ethics puke help a company achieve a hale long-term line of work model. Conversely, in the cases of Enron, Parmalat, and Merrill Lynch for example, a line of descent ethics-related scandal can cost billions of dollars and until now the destroy a company. Empirically, ethics or the lack thereof, can be a wild-card factor that can either improve or cost a business. More or less, good ethics serve as an insurance policy against corporate implosion and can help establish long-term customer and employee loyalty. In todays business culture, however, profitability is still the trump card, even amongst a trend toward greater corporate fond responsibility.To understand what good ethics atomic number 18, a clear definition of ethics must be made. The domain is that among others, there are two major separate and at times, conflicting paradigms regarding a preferred business model. The prevailing model in modern business, an open- trade model, relies philosophically on Adam Smiths lassiez faire approach, that unadulterated market competition will always yield the most effective results. In theory, a pure open market system abhors any form of market interference, as it will only work counter to the maximation of an economic system. On a practical level, this type of competition finds its way into the investment markets. Large corporations are constantly under pressure to showcase their value in the form of stock prices, earnings reports, and prognoses for increase profitability in the near future. It would be considered unethical in this model to interfere with the natural air of business. Advocates of this model are by nature, against regulation. The other model, which focuses on corporate social responsibility, is a more holistic approach that includes th e social consequence of a company beyond its shareholder obligations. Therefore, good ethics are measured by the benefit to all entities that come in contact with a company today or indirectly, from shareholders, to customers, to employees, to subcontractors, and to the environment. This type of model, which has been recently adopted by the United Nations, is challenging the traditional bottom-line approach and redefining the heart and soul of good ethics in business. The open market model has been the prevailing model of big business since roughly 1980, following international economic turmoil, believed to have been caused by an over-regulating economic philosophy from both sides of the Atlantic Ocean. Deregulation, desperation, and temptation have invited many ethics scandals in recent memory, from European scandals in the 1980 and 1990s to the U.S. based global corporate scandals in the early 21st Century. Lloyds of London for example, one of the largest insurances providers i n the world, narrowly avoided bankruptcy as a result of allegedly misrepresenting its profitability and the amount of liabilities in the early 1980s to its Names, or wealthy individuals who insure their policies. The scandal led to over $8 billion in losses as it rocked Londons financial markets, and as Tony Blair claimed, Lloyds has committed the largest, most extensive and pervasive fraud in history (McClilntick, 2000). Another large European company, Parmalat, has been accused