A value-based corporate leadership in the areas of conflit between profit maximization and business ethics

Abstract

A corporate leadership aims at maximizing profits in order to secure long-term existence. The concept of a value-based corporate leadership includes a concept of increasing value, which refers to the enhancement of shareholder value. Leadership behavior and value-based leadership is primarily based on the profit interests of a firm’s shareholders. Investments in the firm are mainly focused on increasing shareholder value. This monistic focus on maximizing profits contrasts with economic ethical guidelines, which evolves in the context of sustainable responsibility and business ethics, since these two concepts diverge due to their different objectives. To practice ethics in the capital market, it requires renunciation and long-term rethinking. Economize cost-effectively and gaining profits is the first objective of any firm. However, it is an inherent ambivalence of a mutual condition of the economy and morale, which is reflected in the market economy and in the economic middle class. Nowadays, more and more firms get involved with regard to social responsibility and corporate leadership. Monetary and material donations for public facilities are provided, volunteering or free services are offered. This selfevident, social engagement is receiving increased appeal and hearing in public. As a result, firms not only demonstrate their social responsibility, but at the same time improve their image. But is this sufficient to withstand a value-based corporate leadership in the areas of conflict between profit maximization and business ethics? A value-based corporate leadership has to succeed in connecting the responsibility of the firm and its entrepreneurial and ethical perspectives, so that it serves in a supportive way and pursues a common goal. This attitude is justified in arguing that firms are not only necessarily dependent on operating profitably, but also on gaining social acceptance, which legitimize its economic actions. A successful corporate leadership has to go hand in hand with the concepts of profit maximization and the moral commitment of a firm. Moral commitment strengthens the foundation of legitimacy of entrepreneurial actions. The later presented Holistic Value Driver Scorecard is the main content of this work and the author´s contribution to science. The aim of this work is to provide firms a managerial tool to improve their business processes and detect value drivers as well as destroyers.