Business Ethics and the Role of the Corporation
The problem to be investigated is the ethical role that the corporation has when balancing internal strategies with external responsibilities. Dr. Novak explains various responsibilities a business has in his article “Business Ethics and the Role of the Corporation”.
This paper will first discuss why Dr. Novak has two sets of responsibilities in his article on business ethics. Next it will explain what Dr. Novak says about the rule of law and its relationship to business. Finally it will analyze what he means by moral ecology.
Why did Novak Have Two Sets of responsibilities for his Definition of Business?
The first set of definitions included internal business strategies focused on satisfying primary stakeholders along with the needs of the organization. Creating shareholder wealth, growth, satisfying customers with quality products and job creation are mentioned in this first set of responsibilities. Novak refers to “the defeat of envy through upward mobility” (Jennings, 2009) which basically is saying that promotion within the workplace gives people a reason to continue working hard because they will be rewarded. Reward is the basic premise for employment in a capitalistic culture. Because there are few or scarce resources, people will be rewarded according to how hard they work, and how well they work. According to a secondary source Capitalism Crib-Sheet, (Anxiety Culture.com, n.d.) who quotes from the Wealth of the Nations by Smith, “By rewarding the most efficient, competitive people, efficiency and competition are promoted, and everyone benefits more than if inefficiency was rewarded.” (Smith, 1776)
The second set of responsibilities refers to external stakeholder responsibilities or secondary stakeholders. These include: the community which the business serves, political views which shape this community laws, respect for these laws, environmental issues, being responsible for which media the organization supports and thus promotes via television commercials. According to Novak, Social Justice describes a unique balance of “laws and moral and cultural institutions”. How well a company conforms to activities that benefit these cultural institutions while abiding by the laws of society, and, at the same time, still managing to be profitable, is the key to a successful business.
Total Quality Management (2009),
Secondary stakeholders are also important because they can take action that can damage or assist the organization. Secondary stakeholders include governments (especially through regulatory agencies), unions, nongovernmental organizations (NGOs), activities, political action groups, and the media.
The Rule of Law and its Relationship to Business
Novak states in this article, “exemplify respect for the law. Business cannot survive without the rule of the law. Long term contracts depend on their fulfillment of the law.” (Jennings, 2009)...