45. The speaker claims that following high ethical standards is the best way to
maximize profits in the long run. However, this claim seems to be more of a normative
statement than an empirical observation. The issue is more complex than the speaker
suggests. In my observation, the two objectives at times coincide but at other times
conflict.
In many ways behaving ethically can benefit a business. Ethical conduct will gain
a company good reputation that earns repeated business. Treating suppliers, customers
and others fairly is likely to result in their reciprocating. Finally, a company that treats
its employees fairly and with respect will gain their loyalty which, in turn, usually
translates into higher productivity.
On the other hand, taking the most ethical course of action may in many cases
reduce profits, in the short run and beyond. Consider the details of a merger in which
both firms hope to profit from a synergy gained thereby. If the details of the merger
hinge on the ethical conviction that as few employees as possible should lose their jobs,
the key executives may lose sight of the fact that a leaner, less labor-intensive
organization might be necessary for long-term survival. Thus, undue concern with
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