Business is to maximize profits.
business
Description
Introduction
- Summarize the argument: The purpose of business is not necessarily just profit maximization, it can commit to the higher purpose of creating value for society
- The classical business theory assumes that the only purpose of business is to maximize profits. It further assumes that people are self-interested but that self-interest is actually beneficial to society.
- Limited reasoning about the purpose of business has lead to all sorts of unethical business practices that have caused all kinds of human suffering and exploitation and given business a bad reputation.
- With advances in communication, technologies society is increasingly holding business to account.
- Business has responded by implementing various initiatives informed by ethical theories such as Codes of ethics (a bureaucratically implemented response), CSR, and stakeholder initiatives, as well as strategic philanthropy (post-bureaucratically aligned initiatives).
- Codes of ethics are limited in their capacity to actually change behaviors. Window-dressing is another risk, where CSR and stakeholder rhetoric is only a communication tool and not a real objective.
- To change corporations complex and critical ethical reasoning is required, as well as virtuous character, and a commitment to a higher purpose for business beyond profits.
