Antonio Argandoña’s blog gives a clear idea of why being ethical in business is really hard. He focuses his points on one main idea: the nature of the tasks involved in leading a business makes ethical decisions really difficult.
I particularly found this blog interesting because the author argues that there are many psychological reasons why firms do not engage in ethical decisions. For instance, he mentions that firms resist to accept evidence that goes against their beliefs. This is called cognitive dissonance. This action has the effect of making firms continue with their decisions even though they might be unethical. Additionally, the author mentions that firms rationalize behaviors. Unethical decisions done by the vast majority will be presented as correct and since everyone does it, it is acceptable for a firm to also do it.
I especially support and agree with one of the author statements. He says that there is an abundance of inertia; since “that’s how it’s always done”, firms will continue doing the same thing. The author claims this as the “success trap”. Once firms find themselves in a position where everything is going their way, there is no tendency to change, no tendency to act ethically. In my opinion, this should be assimilated as an opportunity for firms to differentiate themselves from their competitors. While some may feel satisfied for what they have already achieved, changing and trying to diversify the firm’s actions should be considered.
From this blog post, I have realized that although ethics is hard, it is necessary. The reason why it is hard is because there is usually a tradeoff in the short run between increased profits and acting ethically. Firms demand ethics to be profitable but this is not always the case. However, consumers are continuously taking more into consideration the firm’s ethics when making purchasing decisions so this is a great opportunity for firms that do not fall under the “success trap” to start acting differently.
Reference:
http://blog.iese.edu/ethics/2015/07/09/why-is-it-hard-to-be-ethical-in-business/