The triple bottom line is a concept describing the principle of a triple social responsibility of companies in financial well-being, environmental impact, and social responsibility. Usually, managers do not give equal attention to their responsibility in the spheres of the planet and people. However, the development of a system of managers’ ratings measuring their success under these indicators can improve the companies’ performance.
Many entrepreneurs deliberately inflate expenses to subsequently demand higher deductions and reduce the actual amount of taxes. Sometimes peers can put pressure on the entrepreneur to expand expenses, and raise actual earnings and wages. Entrepreneurs should understand that expanding expenses cannot go unnoticed, since the IRS requires receipts for expenses and, in the absence of receipts, does not recognize the data provided. Moreover, the IRS can impose fines on dishonest entrepreneurs, which will affect my choice.
Under SEC rules, large corporations must report the ratio of their CEO’s salary to their average employee’s salary. Many company representatives consider such a requirement unreasonable and lobby against this rule. Likely, the refusal to disclose data on the salary of the CEO is not an ethical position, since the salaries of corporate executives and members of the board of directors should be adequate to the salaries of top managers and middle managers. It is unethical to raise the salaries of board members so they exceed the salaries of average employees in dozens of times.
Maximizing the company’s shareholder value is generally recognized as its primary responsibility. Initially, this position was dictated by the rather aggressive behavior of the first US corporations in the middle and late 19th century, who were monopolists in their fields. Even at those times, understanding the maximization of shareholder value as the main goal of business activity could not be an adequate position for members of the board of directors. The evolution of demands in local markets and the globalization of the economy mean an increased responsibility of shareholders to society, the planet, and the well-being of company employees.
Ethics training and strong ethical leadership both have a strong positive impact on long-term ethical behavior in organizations. Interestingly, scholars note that long-term employees engage in unethical practices “as a way to advance or maintain their status within the organization” (Lee et al., 2020, p. 2). Scholars also recognize that unethical behavior can be reduced by adopting ethical practices and ethical leadership.
Reference
Lee, J., Oh, S. H., & Park, S. (2020). Effects of organizational embeddedness on unethical pro-organizational behavior: Roles of perceived status and ethical leadership. Journal of Business Ethics, 1-15.