Ethical Principles in Our Personal Management Ethics

Two of the most prominent ethical principles that impact my personal management ethics deal with economic efficiency and self-interests.  According to Hosmer, “Basic rights are meaningless without the essentials of food, clothing, and shelter.”  For this reason, he states that we should strive to maximize necessary output by operating as efficiently as possible.  This can be linked back to the Free Market Capitalism Philosophy of Business Ethics which states that business decisions should be made to maximize shareholder financial value.  Since management cannot possibly be aware of each shareholders individual situation, making decisions based on economically efficient principles is essential to a company’s overall prosperity.

As managers, we run into dilemmas when making decisions because of a condition known as “Pareto Optimality” in which it is impossible to make one person better off without harming someone else (Hosmer).  Since this is inevitably true, managers must also apply the ethical principle of self-interest when making business decisions.  Hosmer states that “our long-term interests are usually very different from our short-term desires,” and this is absolutely true when managers consider strategic decisions for their organization.  Thus, managers should use the principle of self-interests to make decisions based on facts rather than intuition or impulse.


  • Hosmer, L. T. (1995). Brief Summaries of Ten Ethical Principles. Academy of Management Review, 20(2), 396-397.
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