MORAL ISSUES IN BUSINESS

According to Alfred Marshall, economics is defined as the study of mankind in the normal life of business. Economics aims at studying as a science between the human behavior and as a connection between maximising scarce resources which have alternate uses. Ideally, economics is considered a social science which seeks to make an analysis of how production, distribution and the consumption of goods and services occur and the analysis of how households, corporates and governments make decisions on allocation of resources to maximize and satisfy their needs. On the other hand, ethics involves the study and analysis of values, adherence to the rule of law and the entire environment. (Stark, Andrew (2013)). Believers of this theory advocate that agents will act on decisions that will eventually harm the shareholders but don’t foresee the event that the same managers may exercise in cheating, lying and stealing to further advance their own self-interests.

This is not good for business or the economy because in the future it will lead to bankruptcy and collapse of business. On the other hand, ethics can be a friend to economics in the sense that a businesses’ code of ethics can be its assets. Although having and applying a code of ethics to a company does not bring a significant impression of the company to the public eye. Specificity of the asset for a company is however low bearing in and that it is easy to copy the code of ethics. Establishment of these new ideas has lead to increase in competition for market. More market means more industries which means more competition in that line of production. This in turns leads to reduced market prices as a way of coping with the increased competitors.

This may end up in rivalry between product users or even companies and end up in hatred and dislike for each other. (Emerald, 2011) The idea of “scarcity” has led to fight for the limited resources. Currently, economic security is violated, with more emphasis being on the market freedoms without social responsibility. Competition has led to increase in productivity and general increase in product or service quality. Competitive advantage as helped in lowering the prices of goods sold since there are many offering the same product, with same quality but al lower prices. This helps reduce the cost of buying basic commodities, lowering the cost of living to a mere manageable value. This also leads to diversity of a single product or services in such a way that it is able to satisfy the consumers demands and needs.