LAW 18B Chapter Notes - Chapter Ch. 5 Business Ethics: Profit Maximization, Longrun, Jeremy Bentham

• School: Long Beach City College
• Department: Business, Law
• Course: LAW 18B
• Professor: Professor Bernal

Document Summary

Business ethics: the decisions businesses make or have to make and whether those decisions are right or wrong; how business persons apply moral & ethical principles in making their decisions. Traditionally, the only goal or duty of a corporation was to maximize profits. Today, that view is seen as greedy or inhumane but the theory of profit-maximization still stands. In theory, if all firms strictly adhere to the goal of profit maximization, resources flow to where they are most highly valued by society. Corporations would be able to focus on their strengths. Profit maximization leads to the most efficient allocation of scarce resources. Triple bottom line: a corporation"s profits, its impact on people, and its impact on the planet. Magazines & websites rank companies based on their environmental impacts & their ethical decisions. 5-1b the importance of ethics in making business decisions.