Issues related to ethics have been there since the time immemorial. Such issues have created a representation of the foundation of various religions and lifestyles. Ethics can be found in all areas and activities of the human being as they have been preoccupied with the quality of their behaviors towards the people who surround them. People are not purposely out and are not willing to improve the way in which they relate to other people. However, they assess their behaviors about how correct they are. Therefore, it can be considered that ethics is a representation of the mental process developed systematically to help to identify and evaluating the differences between how people view the situation and the resultant situation from human action or activity needed to improve how human beings behave in the society.
Ethics has increasingly grown to become a significant part of the economic since the 20th century. Since then, various social groups have manifested in what is about public security against manipulations by the politics of the day and consumer awareness concerning the necessity to be responsible in the organizations to help find fair and lasting solutions for different issues related to ethics. Business ethics refers to the study of the situations and decisions in a business where issues relating to right or wrong are addressed. According to the above definition, business ethics covers the entire area how firms, society, individuals, and state interact. Therefore, this means that business ethics and business are similarly complex. Business ethics refers to how people carry out the affairs of the business from the lowest fraud to the excellence at the highest levels.
There are also some business specialists with the consideration that business ethics begins at the end of the law. Business ethics is mainly concerned with issues which have not been covered by law or where the consensus on whether something is right or wrong is not definite. Discussion concerning ethics within a certain business practice may finally lead to legislation once there is an agreement on some consensus. However, for most of the issues related and of interest to business ethics, the law does not provide guidance at the moment. Why should people, therefore, be ethical? Saying that a person should do something means that something is ethical because if it was not ethical, it should not be done. Probably, when business people ask reasons for being ethical, they have a different thought and question in their mind. What motivates me to be good? Is there something in it for the people?
It is very right for people to know if they will be rewarded for being good. However, it has nothing to do whether a person should be good. It does not make any sense trying to convince people that they need to be good by pointing how they will be rewarded after becoming good. A person should be good because being good is definitely what people need to be. As for the motivation, a person who behaves well is rewarded but not always.
The world has recently seen various corporations making decisions that historically would seem to be at odds with what people would have expected from the leaders of the major companies. In the year 2014, a healthcare retailer in the United States, CVS decided to stop selling cigarettes. The step cost the company close to $2 billion USD. The company stopped selling the cigarettes because the company thought it was the right thing for them to do for the customers and the company which would help the people to a better health. One of the primary reasons why the company took this step was showing the people in the United States and the world over that it cares about the health and well-being of the customers and the whole nation. This is proof that the company cares even more about improving the healthcare of the customers than making profits (Arrow, 1951).
The new change of the company would help put people on a path to a more bright future health-wise. CVS has since grown to become more reliable healthcare provider that it was before taking the step. The stores changed thus becoming more of retail business than health services which were the main purpose when the company was starting. The companyís hope is that it will create more mini-clinics thus strongly encouraging and aiding its customers to visit the pharmacies. Milton Friedman was an economist who won Nobel Peace Prize. Friedman won the prize because he was known to strong defender of the economic model of corporate social responsibility. Additionally, he is famous for ideas regarding individualism. According to him, the business has only one goal which is making profits. Therefore, the management involved in business is solely responsible for maximizing profits for the shareholders. This means that the management will lead the company into success while the owners and the stakeholders of the company will be successful also (Yanbaeva et al., 2007).
Individualism is a principle in which the person is independent and relies on themselves. It favors freedom of action for separate individuals instead of a collective group of people. CVS had always been a financially successful company with a strong positive public opinion. Most people in the United States trust the company. However, instead of the company following the theory of individualism strictly and only concentrate on maximizing profits, the company goes against these ideas. The company gave up $2 billion in revenue from the tobacco products so that could maintain a positive image in the minds of its customers and the members of the public.
Therefore, was it morally and ethically okay for CVS and other companies to profit from products such as tobacco that have an adverse effect on the consumerís health? The answer to this is no. It would be a great thing selling tobacco and maximizing profits for a company. But, on this other hand, there are several and various problems associated with smoking or using another substance that could affect health. Take the case of cigarette which is generally warned against for its dangers to the health. The biggest threat in which smokers put themselves is contracting lung cancer but there are other disadvantages to smoking other than lung cancer.
In the above case of cigarettes, it is a common knowledge known to all people that tobacco affects oneís health. There are at least deaths of 350,000 people each year from the illnesses associated with tobacco. Additionally, tobacco is directly responsible for about 85% of all deaths from lung cancer. Cigarettes are also addictive which makes people continue using them even after they have known that they are bad for their health. According to a recent report from the Surgeon General, smoking is as dangerous as heroin and cocaine. This makes one of the reasons why selling cigarettes and other products are morally and ethically not correct.
Cigarettes have cost the society dearly. According to a recent report from the government, smoking cigarettes is responsible for more than $23 billion in healthcare costs every year and over $30 billion losses in productivity. Additionally, cigarettes contribute to residential fires in most countries where there are heavy smokers. Tobaccos companies have been making money from the products that are not only destroy individuals but also destroy the whole society. The huge healthcare costs and losses in productivity combined with negative health effects of using tobacco individually and other people via second and third hand smoking makes tobacco one of the worst products to ever been sold (Jacobsen et al., 2005).
It is also manipulative and deceptive to advertise for cigarettes. According to critics of the tobacco industry, images related to independence are used by cigarette manufacturing to sell products that help to create a profound dependence. This means that images related to life are used in selling products that immediately cause deaths. It astonishes everyone what tobacco manufacturing companies can do to boost their profits. The companies knowingly deceive customers into buying products that can cause them so much harm and death at the same time.
People saw tobacco companies as good and defensive stocks with a strong solid track record in the how they perform. This destroyed the moral and ethical questions associated with supplying and selling drugs which are addictive and cause cancer to children and other vulnerable adults. This creates stronger and wider points about investing ethically which is mainly the screening out of industry sectors and organizations which are not ethical. Tobacco is one of the sectors that most people commonly avoid. Other sectors include gambling, trade, and pornography among others.
Ethical investment is hugely important. However, this will not change the world into a better living place for the pace people may require. Additionally, there is always going to be some people on the other side of the fence willing and ready to passionately argue that profit is the only thing that counts when someone is making an investment. We should not be seeing a conflict of doing ethically and morally right thing and commercial success. There should also not be complex interaction of some factors that are characterized by paradox. This means that there should not be a situation where opposition tendencies come into close contact. The companies and organizations investing in the production and selling of products that affect the human health should be fundamentally challenged to use such situations to inform their creative situations which would lead to innovations and industry growth instead of succumbing to paralyzed indecision and calls of poor judgment as told by McWilliams & Siegel (2000).
Companies need to apply triple bottom line comprised of three parts which are:
i. Social component (People)
ii. Environmental component (Planet)
iii. Economic/financial component (Profit)
The above pillars of sustainability are principally designed to help the companiesí management and executives to keep the three priorities balanced.
People refer to how labor and the community in which the businesses operated should be treated fairly and beneficially. The planet is having sustainable practices within the community and profits refer and represent the economic value that people create after they have deducted their expenses which are the traditional and known notion of profits. The underlying factor is that companies make money when they engage in environmentally, and socially positive economic activities and then they plough back the money back into the society by investment or projects which should benefit the community.
As the analysis has shown, there are some dilemmas that companies need to face. Being morally and ethically correct while conducting a business known as corporate social responsibility does not increase the margins of profits. When executives and management of an organization or a company implement act that promote profits they are just being minded of the profits, they are making instead of the community they should be serving. The correct way in which companies should approach morally and ethically right activities are asking what they are responsible for after which they implement the activities which need to promote ethics and morals in the operations and processes. What companies need to put before anything is the value of human life. Although selling products such as tobacco increases profits, it pays even more by not engaging in such activities and thinking about its effects in the community.
Arrow, K. J. (1951). Social choice and individual values. New York: John Wiley & Sons, Inc.
Jacobsen, L. K., Krystal, J. H., Mencl, W. E., Westerveld, M., Frost, S. J., & Pugh, K. R. (2005). Effects of smoking and smoking abstinence on cognition in adolescent tobacco smokers.Biological psychiatry, 57(1), 56-66.
McWilliams, A., & Siegel, D. (2000). Corporate social responsibility and financial performance: Correlations or misspecification. Strategic Management Journal, 21, 603-609.
Yanbaeva, D. G., Dentener, M. A., Creutzberg, E. C., Wesseling, G., & Wouters, E. F. (2007). Systemic effects of smoking. Chest Journal, 131(5), 1557-1566.