Analyzing Rothaermel's Ethical Issues

The term “ethics” is often used within business environments to promote and encourage organizational employees to make fair and honest business decisions daily. However, some scholars argue that, a majority of organizations in today’s business environment use the term “ethics” loosely to meet the current social status quo of business practices, but do not actually enforce the importance of ethical practices with their organization. In order to explore this argument further, a sample business ethics issue will be examined and a Christian worldview will be applied to the ethical issue as a method to correct the business ethical topic.

Ethical Topic Exploration

A sample business ethics issue identified in the textbook, “Strategic Management Concepts” by Frank Rothaermel can be found in Chapter 11. According to Rothaermel (2017), “many public firms are under intense pressure for short-term (such as quarterly) financial improvements. How might such pressure, in combination with output controls, lead to unethical behaviors?” (p. 394). This is a great example of ethical issues faced by several organization

today; therefore, this ethical topic will be further examined.
First, the term ethics needs to be clearly defined. According to Oates and Dias (2016), “ethics is defined as being concerned with judgements involving moral decisions which refer to normative judgements that imply whether something is good or bad, or right or wrong” (p. 97). In other words, ethics are the moral compass of an individual or organization in determining what is right and what is wrong. With this definition of ethics, the ethical issue identified above will be examined.
In the ethical example identified by Rothaermel, employees who work in organizational environments, where their output directly affects the overall financial success of an organizations, often experience managerial and personal stress on a daily basis to achieve high output gains. Sometimes, when an employee experiences too much managerial or personal stress, they deal with their stress in unethical methods. Some examples of unethical methods used by employees in this type of environment are: taking shortcuts in the production of a product or service, falsifying information, and takin unnecessary safety risks to achieve output results.
In the same manner, organizational leadership ethics can also be influenced by the demand of financial gains. In the current business environment, companies are expected to constantly increase their quarterly financial earnings. This environment creates a constant pressure on organizational leaders to produce more and more revenue. As a result, when organizational revenue success is lower than expected, sometimes organizational ethics are violated, by the leadership team, to achieve the desired increase in earnings. Some examples of ethics violations exploited by organizational leadership are: placing high levels of pressure on employees to produce higher yields, falsifying financial reports, and taking shortcuts to achieve quicker results.
Whether it is an employee, organizational leadership, or both that is violating ethical business practices within a business, it all creates the same results: a discredited organization. According to Oates and Dias (2016), “corporate collapses and scandals have damaged public confidence” (p. 95). From nationwide factory recalls of automotive airbags experienced by Honda to the financial collapse of Enron, unethical practices within organizations leads to public shame and hardship for consumers. Therefore, it is important for organizations to practice ethical business practices and enforce ethical employee performance.
Biblical Exploration
The Holy Bible is filled with examples of ethically correct methods to deal with real world situations and decisions. An example of this can be found in 1 Timothy 6:10, “For the love of money is a root of all kinds of evil, for which some have strayed from the faith in their greediness, and pierced themselves through with many sorrows.” (NKJV). In this verse, Paul, the author of 1 Timothy, states that the “love” of money leads to “all kinds” of unethical decisions; which leads to greed, pain, and sorrow. Also, Paul states that “loving” money causes Christians to stray away from God, replacing their relationship with God with the desire to earn more.
It should also be noted that this verse is often the most misquoted scripture from the Bible. Often, this verse is quoted as “money is the root of all evil”; however, this is not what Paul states. Paul clearly states it is the “love” of money that leads to the root of evil. In other words, money is not evil, loving it is evil because it creates situations that lead to unethical practices and it replacing the need for God in an individual’s life.
Applying the Bible to the Ethical Topic
1 Timothy 6:10 can be directly applied to the ethical issue identified by Rothaermel in the above section.

The ethical issue identified above states that some organizations and employees may make unethical decisions due to the requirement to achieve higher quarterly financial gains. When applying 1 Timothy 6:10 to this ethical issue, Paul clearly states that the “love” of quarterly financial gains will result in “all kinds of evil”, “greediness”, and “sorrows”. In other words, if the ultimate goal of an organization is to meet their quarterly financial goals, no matter what, ethical standards will mostly like be violated. However, if an organization focuses their “love” on quality, safe, and morally sound businesses practices, they may not always meet their quarterly financial objectives, but they will void the pitfalls of evil, greediness, and

sorrows.
Following the guidance of 1 Timothy 6:10 may not always lead to quarterly financial success for an organization, however, it will lead to organizational trust, both internal and external, and the possibility of success in the future. According to Kujala, Lehtimaki, and Puctait (2016), when an organization is considered ethically correct in their business practices, this creates an environment for trust and “trust builds and supports long-term relationships and generates supportive behavior both inside and outside of an organization, and therefore it is regarded as a central element of a company’s ongoing success” (p. 701).
Therefore, it can be concluded, the Bible is not just a book to be used only on Sundays. It is the living word of God and it has daily applications for individuals and organizations. In one verse, 1 Timothy 6:10, Paul identified the ethical issue faced by millions of individuals and thousands of business on a daily basis; the love of money. However, Paul also identified the solution to this ethical issue in1 Timothy 6:11, “ But you, O man of God, flee these things and pursue righteousness, godliness, faith, love, patience, gentleness” (NKJV). By focusing on “righteousness, godliness, faith, love, patience, gentleness”, Christians, non-Christians, and organizations alike will not fall victim to the “temptation and snare” known as the “love of money”.