Business Ethical Barriers

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When we speak of “barriers” in business ethics, we speak of those situations built into the system of competition that cause ethical dilemmas. In other words, the free market, based on competition and profit-seeking, contains inherent ethical problems. Since all firms in a competitive market seek to protect themselves from competitors while still maintaining their market share, firms are under constant pressure to adapt or die. This is inherent to the system of market capitalism.

Sales

Salesmen in retail are under constant pressure. Often, their paycheck derives from commission, which means they must sell or suffer financial hardship and even lose a job. The problem here is that salesmen must constantly promote products to everyone and anyone who will listen. Since sales is always under pressure to perform, salesmen can find themselves exaggerating the usefulness of a product to make a quick sale. They might even lie for the sake of a sale. In other words, pressure from managers, as well as other incentives, can force an otherwise decent man to lie about a product in order to make a sale.

Profits

Both board members and managers need to deal with the question of profits. In modern capitalism, many stockholders want quick returns or substantial capital gains. There is pressure to create quick profits over the long term with steady growth. Quick profits can get media attention, market attention and keep customers loyal by receiving substantial dividends on their stock holdings. The ethical issue here is that there is great pressure on managers to squeeze more out of employees to increase productivity and make their own management techniques look good. At its worst, the ethical barrier here is to use quick profits to feather one's own managerial nest at the expense of the long-term stability of the firm or the safety or welfare of the employees.

Communications

Another major ethical barrier is employee privacy. Few will deny that employees often waste time surfing the web, emailing friends or playing on Facebook. The barrier refers to the response of management. If there is a grounded suspicion that employees are wasting time online, then the decision to install surveillance software on their computers might make some sense. Yet, there is an issue of privacy, as well as the possibility of employee distrust of management if this is done. In this case, employees are clearly not given the proper incentives to work, and rather, find it rational to waste time on YouTube.

Local Business

Local, small business struggles to compete with the large chains. The larger chains are often cheaper, yet small business can be an integral part of the local economy. Again, here is a barrier built into the system of competition: a firm can buy supplies from a big chain, hence forcing smaller firms to go out of business. On the other hand, the firm can pay a little more to support local suppliers and businesses. The market mentality would demand that one simply buy from the cheapest supplier. Business ethics, however, sees a barrier thrown up by the system of competition and might well suggest that the firm buy from local businesses for the sake of local employment and economic stability.

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