engleski

Is ethical Behavior Profitable in Construction? A Theoretical Framework

There are two main competing theories concerning relationship between business ethics and profit. According to Nobel prize-winning economist Milton Friedman, managers should not take care about business ethics at all. Their only duty is to maximize profit. In contrast, according to the theory of "school of enlightened selfishness", the manager is responsible not only to shareholders but also to the wider community. In other words, according to this theory, the manager should take care about business ethics. Accordingly, the main purpose of this article is to apply these two theories on construction business and to check validity of these theories in construction. Or, in short, the main question is whether is it better for a civil engineer to follow the principles of business ethics or not. This analysis will be based on the game theory and rational choice theory. The main conclusions are, first, that an ethical behavior is profitable in situations when a long term cooperation with business partners, workers, customers and wider community is expected. However, second, construction business also provides many incentives for an unethical behavior that could be very lucrative. This article will explains under which circumstances one may expect an unethical behavior in construction. In the final part, this article will outline methods for empirical research about profitability of ethical behavior in construction.

business ethics ; profit ; ethical theories ; construction ; game theory ; prisoners’ dilemma ; tragedy of commons

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