Ethical Value Of A Business Corporation Essay

1844 Words Dec 19th, 2016 8 Pages
Historically, the purpose of business was defined as generating as much profit for shareholders as possible. However, given numerous negative externalities created by business and the impact businesses have on their other stakeholders, this definition of a business corporation is limiting and no longer correct. Profit and wealth are great motivators for individuals and businesses, but measurement of success cannot be simplified into “the bottom line”; thus, profit should not be the sole motivator for corporations and individuals. The negative externalities associated with this mindset are recurrently highlighted in the news—poor working conditions, global climate change, layoffs due to unethical decision-making, and more. These externalities are clearly the result of unethical behavior of corporations, corporations adhering to short-termism, and corporations emphasizing economic value over ethical value. What many corporations do not realize is that emphasizing ethical value—valuing the impact of their decisions on all stakeholders—and considering longer time horizons can be extremely beneficial for their brand/reputation as well as their stock price. In other words, focusing on creating ethical value will return the greatest economic value. While implementation of changes to move away from shareholder centric corporations is difficult, it is necessary, as any business’ purpose is to balance and maximize value for all stakeholders over the long-run.
How Profit as Purpose…

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