Professor Freeman’s interview refers to the ‘purpose’ of a business numerous times in terms of money, profits and businesses making money for shareholders. Professor Freeman only ‘thinks’ this is the problem and that there is a need for business, profits & ethics having to link together. “Well it’s a really a little bit of both”. Freeman, E. (2009) Lateline Business.
Profits are more important than ethics. If businesses do not make profits they would not be here today, therefore, you would have no customers, suppliers or employees. Profits are the driving force for all businesses to increase net earnings and returns for shareholders.
Ethics do not make businesses large profits. Ethics do make employees feel respected and rely on the niceties and morality in life when taking on a business transaction. However, ethics do not provide good paying jobs for society and generate personal as well as economic wealth.
Throughout the global financial crises CEO’s were not really hurt. “We didn’t see how lending money to our customers who couldn’t really afford to pay it back did any good”. Freeman, E. (2009) Lateline Business. Clearly the banks have not created value for the customer, employee or shareholder during the subprime crisis.
In today’s business world we would like to think that our responsibility ends at the transaction level. In actual fact it does not take into account what affect the financial industries products have on their end customers and employees. If today’s financial industries do not change their current way of conducting business then the issue will arise that we will have regulation of one size will fit all. This would not benefit the customer by closing markets up to less competition, thus leading to higher interest rates implementing lending controls. This will often drive out innovation and lead to unethical decisions. Financial firms will need to take a step back and regain their understanding for what their basic purpose...
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