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Think of situations when successful short term results may not be sustainable and beneficial in the long term

Finance Jan 04, 2021

Think of situations when successful short term results may not be sustainable and beneficial in the long term. Can you explain how business ethics can help organizations and Banks to balance between the pressure to deliver short term results and to at the same time meet long term goals in the best interest of all stakeholders?

Expert Solution

Short term decisions are not always beneficial for the company in the long run because it can lead to creation of the value in the short run, but it will lead to overall destruction of the value in the long term as companies can enter into various unethical projects which are related to environmental destruction and positive net present value in the short run but it will be leading to loss of the reputation of the company in the long run and it will also lead to a discounting of the valuation of the company in the marketplace in respect to the other industry players.

Undertaking of other projects with other suppliers who are engaged in various kinds of fraud which will be leading to profitability for the company in the short run but it will also lead to more unethical practices and loss of business reputation of the company run.

Business ethics will help the company to select all such best projects which are not just unehical but they are also value related projects which will create value for the company in the short run and it will also enhance the benefits to the company in the long run so it will maintain a balance between selection of the project and profitability of the company.

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