The &Ldquo;ethical Paradox” Theorem, by Marcy George-kokkinaki
In observing companies which were found guilty for financial scandals, a similar pattern of conduct was observed. This pattern led to the development of the “ethical paradox” theorem.
According to the “Ethical Paradox in Business and Marketing”, when firms violate the “Code of Ethics” to a certain degree, the imminent profitability acts as a motivator to further deviate from the Ethical Conduct.
In section 5C, it was verified that the majority of customers are not influenced by corporate lack of ethics, as long as product’s “value for money” is not afflicted. However, as unethical practices spread within the organisation, inner corporate loyalty tends to diminish. Competitors play a significant role at this stage, as they gradually gain a powerful competitive advantage over the “unethical” company, through corporate preservation, unanimity and sustainability. (Aggressive Advertisement may also be applied).
With lack of ethics, corporate vision and mission are distorted, disabling corporate orientation, and causing productivity degradation, i.e. In terms of quality and/or quantity.
This schismatic pattern eventually leads to quality deterioration of firm’s product or services. However, customers’ purchase motivators towards products or services are heavily based on quality and price, i.e. “value-for-money”. At the point where un-ethical conduct affects quality and price, customers lose their purchase motivator for the specific product. Consequently, in an effort to reach corporate goals via lack of ethics, firms become confined in a pattern of “unethical conduct”, which eventually leads them to quality degradation and self-destruction.
The “paradox” lays to the fact that although corporate profitability and expansion are the reasons for unethical conduct, pursuing a pattern of unethical practices eventually leads the company away from the aspired success.
The issue of ethics may not be pertinent solely to illegal commercial transactions, harmful or unsafe practices. The “Ethical Paradox” is also encountered in firms where Departments, Teams or Individuals have opposing strategic objectives.
