In: Operations Management
Hurwitz says that he doesn't book bands as favors. presumably at least some of the favors he's talking about would be to friends. do people who run their own company have an ethical responsibility to separate friends from business
Yes, people who run their own company have an ethical responsibility to separate friends from business.
This is because of the concept of business ethics. While running a business there has to be a clearly defined as well as a properly justified set of priorities that will help the business to achieve its objective in the long run. Each and every business seeks to create value and is run with a commercial purpose and objective. Here the set of priorities has been well defined by Hurwitz and he is clear that his business will not do shows that will lose money for the club.
As such Hurwitz has a principle under which he will not book bands as favors. The criteria for booking bands is a straightforward one – the band that is being considered should be a band that people want to see and should be a band that will not charge too much amount to perform at the club.
Both these criteria enable Hurwitz’s business to optimize its profitability and this is the business’ main objective. Losing money is against the business principles of Hurwitz and by booking bands as favor the club will face the risk of making losses from the performances of those bands that have been booked as favors.
As such this is against the ethical responsibility of Hurwitz who as the owner of his club has to ensure that the business is making profits and is booking bands that are in demand and that will make money for the club.