The purpose of this paper is to investigate whether profit maximizing behaviour can be defended from an ethical point of view, and what possible restrictions should be made on following this interest.
The main structure of the paper is as follows. First, it states the problem. Second, it considers which ethical theory is relevant for evaluating the situation at hand, and argues that rule‐consequentialism is the most appropriate one, but that some constraints in the form of, e.g. protecting human rights must be used as a supplement. Third, it analyses the consequences of profit seeking and profit maximization, and argue that these have a number of beneficial effects. The methodology and approach is one of critical argumentation.
Profit maximization as a firm goal has traditionally been meet with suspicion in the literature on business ethics, being seen as either immoral or amoral. It is argued herein that this practice should be evaluated according to rule‐consequentialist ethics, but supplemented with elements that are more of a deontological ethical character. When seen from this point of view, profit maximization may be seen as ethical. This requires, however, that a number of institutional and other requirements are fulfilled.
In stead of arguing, or taking as a premise, that profit maximization is inherently unethical, researchers should argue which ethical point of view should be used to evaluate such a goal, and then argue whether business practices are ethical or not. In addition, business ethics literature should incorporate basic insights from economic theory.
The paper provides new insights in the ethical nature of profit maximization as the main corporate value. More generally, we argued that, given it is in the owner's perceived interest(s), it is ethically justifiable for executives to take profit maximization as their ultimate goal in running their businesses, as long as they do not violate law, norms or social customs.
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