Ethics and Decision Making in Firms

Abstract

Ethics in business is necessary, because it is present in each and every one of the human decisions. People who take part in a firm look for different results and act for a variety of motivations. This means that managers should take into account the several dimensions of their actions, including material results but also psychological, social and ethical variables. This is an endogenous way to introduce ethics in the firm: it is a kind of equilibrium condition looking not just for short term profits but mainly for consistency, i.e. for the firm’s capacity to yield also long term profit, because it improves the persons’ capacity to take better decisions.