Q. What is the underlying cause of most unethical managerial behavior and the resulting externalities that occurs in corporate America?
Ethics in general examines human behaviour and actions with regard to what is right and wrong, fair and unfair, just and unjust. Thus, business ethics examines issues within the context of the business environment
A corporation is simply an artificial legal structure, but the people who are engaged in
It, whether the stockholder, whether the executives in it, whether the employees, they
All have moral responsibilities.
The most obvious reason for the corporate to act unethically is the never-ending urge for profit. The desire to improve the bottom line has resulted in harming the society in variety of ways. Externality is an effect of transaction on third party who has not consented to, or played any role in, the carrying out of that transaction. The externalities due to unethical behaviour are as follows:
Negative Externalities:
Harm to Workers: Workers are made to work in horrible conditions .They are paid less compared to the money earned on items produced.
Safety: Producing chemicals that will kill humans and harm animals.
Harm to Biosphere: Polluting the river with paper mills effluent.
Environmental Imbalance: Environmental imbalance has been caused by the production of new chemicals by Monsanto which created environmental disaster causing disorder among mankind and animals causing birth defects and even cancer
Positive Externalities:
Eliminating Starvation: Though employees were paid low wages they could to some extent provide them food.
Charity: A part of proceeds from sale of garments was donated to children.
Fines: Imposing fines on corporations found guilty of criminal charge ...