Overview of the Article
The article “Are ethical leaders good for business?” by Celia Moore explores the topic of ethical decision-making in the corporate sphere. The author states that the COVID-19 pandemic showed how ethical decisions made by politicians such as New Zealand’s prime-minster saved the lives of people (Moore, 2020). Moore says that companies need to follow the examples set by such politicians and engage in ethical decision-making. The author articulates the idea that although the reliance on ethics may entail certain costs for businesses, the ultimate reward for such behavior is still more significant. Moore offers an example of Johnson & Johnson, which, despite considerable losses, recalled millions of bottles of its painkiller drug because some of the items contained cyanide.
The author insists that by making ethical decisions, companies can obtain more benefits than in the situation when they avoid making their customers a priority. The ultimate sacrifice which every company needs to make when acting ethically is focusing on the needs of their clients instead of the demands of shareholders (Moore, 2020). Essentially, Moore argues that ethical companies can earn the trust of their customers and become their favorite brands by not only producing quality products and services but also by having strong moral principles and values.
Response to the Article
The article written by Celia Moore contains important ideas which are hard not to agree with since ethical decisions are always much more beneficial than non-ethical ones. First of all, ethical decision-making is a positive phenomenon when analyzed from the perspective of the business. In the current markets, the competition is strong, and companies no longer can earn their share by delivering low-cost products and services. Essentially, all companies must demonstrate their exemplary commitment to a customer-oriented philosophy. As a result, they need to discover a new source of a competitive advantage which can provide them with superiority in relation to other businesses in their segment. Ethical decision-making can be a proper source of competitive advantage since it can demonstrate to customers that the business genuinely cares about them and their experiences. When people see that companies from which they buy products do not simply try to maximize their profits but wish to bring pleasure and convenience to their customers, they become more loyal to such brands. Alternatively, when customers encounter inappropriate business practices from businesses, they become less inclined to purchase their products.
As employers, businesses also can benefit from ethical decision-making when it comes to human resources. Ethical hiring practices have become an integral part of modern HR departments because they positively affect organizational performance. For instance, when businesses pay proper wages and salaries to their employees, the staff members become more motivated and dedicated to their work. People do not want to invest all of their time and efforts into projects for which they are not rewarded accordingly. In fact, when people see that their company does not pay them as much as they deserve to be paid, they decide to leave their places of employment. Therefore, it is vital for employers to rely on ethical decision-making in matters concerning remuneration. Competitive salaries prevent people from searching for new jobs and allows companies from losing valuable staff members able to generate profit. Another situation where ethical decisions have to be made is workplace diversity. Essentially, employers must not discriminate against candidates based on any of their immutable characteristics. Moreover, ethical hiring practices can enable companies to have more diverse teams with members who can share their unique perspectives.
At the same time, the idea of ethical decision-making also can be critiqued since it does not guarantee instant benefits. In other words, when companies decide to make ethical decisions, they risk facing high costs, which ultimately have a negative impact on their shareholders. For instance, Johnson & Johnson recalling millions of products provided by Moore negatively impacted the financial performance of the company (Moore, 2020). Those who support the idea that ethical decision-making should not be applied are certain that any focus on values or moral compass contradicts every company’s goal of maximizing profits. In fact, in certain cases, ethical conduct on the part of companies may jeopardize their financial performance and make their operations not viable economically.
The response to the critique of the idea of ethical decision-making in business should be based on the fact that social responsibility is one of the key elements for consumers and employees nowadays. In other words, to be successful and experience continuous growth, companies cannot avoid engaging in ethical behavior. Modern consumers, especially in developed countries, possess sufficient resources to be able to choose between companies. In this situation, when several companies offer similar products, some consumers will be more likely to choose brands which they trust the most. Brand loyalty is a component which is impossible without ethical decision-making. Therefore, modern companies do not have any other choice than to act ethically when interacting with their clients.
Similarly, from the perspective of an employer, every company must make ethical decisions concerning its human resources policies. Companies compete for competent professionals who, nowadays, can choose among numerous employers. When people see that their potential place of employment acts ethically, they may be more inclined to apply for a position at such a company. Alternatively, when businesses do not rely on ethical decision-making principles, they risk losing valuable employees and failing to attract high-quality specialists. Thus, ethical decision-making is a major element which needs to be addressed by every business.
Reference
Moore, C. (2020). Are ethical leaders good for business? Forbes. Web.