Question

How does Adam Smith’s self-interest theory affect business ethics? Do we see ethics violations in today’s business world? Why or why not? How does Emmanuel Kant’s notion that some actions are just right and some actions are just wrong, compare to what Adam Smith said?

Answer 1

The self interest theory of Adam Smith affects business ethics negatively as it attempts to normalise and validate the actions of business undertaken solely to meet its self interests without taking into consideration their impact on environment and other resources. Therefore the self interest theory might result in non compliance to many business ethics theory as the business intends to fulfill only those motives and objectives which represent the best economic benefit of business irrespective of the interests of other stakeholders which might affect them negatively.

Yes we do see ethical violations in the way today's business conduct themselves. Even the big reputable organisations violate the ethical norms with respect to customer safety standards, environmental policies, labour laws, quality standards etc. to pursue their personal gains. This is because the business organisations today pursue self interests aggressively and engage in various activities that will accomplish their profit motives which in turn might harm the welfare and wellbeing of stakeholders of business. Businesses today find loo holes in law and engage in market gimmicks to create a good social and ethical image while internally undertake all such practices which are harmful to their customers and environment. This trend has started due to profit making objective of business which has undermined the social responsibility towards parties affected by the business.

Emmanuel Kant's notion that actions are either right or wrong, compares to the Adam Smith's self interest theory in the way that Adam Smith considers acting in self interest as the best way to maximize individual welfare and welfare of all while as Emmanuel Kant believes that acting only in self interest might harm the interest of others and is unacceptable and morally wrong. Emanuel Kant puts stress on moral duties, rules which are universally acceptable while as Adam puts stress on actions which bring greater personal benefits.

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