Ethical Behavior of Companies - Essay Example

Business EthicsIn shaping ethical behavior, companies are subjected to several principles that guide business integrities. Specifically, these policies define the association between the organization and its stakeholders as well as describe its level of integration into the society in which it operates. In my opinion, companies should be guided by the principle that advocates responsible shareholder-value optimization. According to this code, the business should give a priority to its shareholders’ long-term interest, but meet the social and environmental expectation of the public.

Fundamentally, this policy meets the interest of the investors, its support for ethical actions and responsibilities, and its inclusion of the Corporate Social Responsibility (CSR) within its strategy.Honoring the interest of the shareholders is the priority of any business investment. Investors expect to yield maximum profit from the venture by maximizing revenue and minimizing cost. However, balancing these parameters leads to adverse consequences that result in social or environmental conflict with other stakeholders.

Therefore, the integration of a CSR framework comes in handy to solve the conflict created by the business operations.The Corporate Social Responsibility model requires the firm to be responsible for its business practices that affect the community or the environment where it operates. However, this does not come at the expense of the enterprise success. For this reason, the value optimization is the ideal practice because it embraces social, economic, and environmental accountability to its stakeholders.

The responsible shareholder-value optimization principle supports ethical actions and responsibility of the business to its stakeholders. Under this principle, the organization is responsible for any social, economic or environmental inconvenience caused by its maneuver. As a result, this role gives the business a mandate to ensure ethical practices that are within the expectation of the shareholders, the community, and other stakeholders.