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The Role of Ethics in Business Evolution

In: Business and Management

Submitted By bromobutane
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The Role of Ethics in Business Evolution
Reconciling works of Managerial Literature, Business Ethics Writer and Catholic Social Teaching, Domènec Melé argued that a firm should be considered as a wholesome person and suggested the ethical implications of his view (Melé, 2012). The concept that a firm should be regarded as a legal person, and not just a profit seeking entity, was brought forth by the House of Lords in the (Salomon v. A. Salomon & Co. Ltd., 1897) case, paving the way for modern firms. Melé’s argument was revolutionary in that he considered the firm a wholesome person, bearing moral responsibilities for communities that it may potentially affect. This response paper aims to analyse Melé’s paper, further discuss his ideas, and finally incorporate the role of ethics in human evolution to project the possible direction of business evolution. The article started by suggesting that there are two views of the firm. The former views the firms as a nexus of contracts, implying that the firm functions as an aggregate of agreements. The latter views the firm as an aggregate of interests, adding a human element of desire to the soul-less assembly of agreements. Extending the addition of human element into the firm, Melé argued that the main constituent of a firm is social bonds, and thus, a firm should be regarded as a community. Personally, I think that the progression of arguments is well organised. Contracts stem from self-interests, and self-interests are derived from interactions with other people in the community. Within a firm, individuals have their self-interests in mind but in a community of other firms, the interest of the firm takes precedence. The concept of contract stemming from self-interests is pretty intuitive, and as social beings, humans not facing survival threats generally derive and pursue their wants and needs based on social...

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