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Profits

by Laurie Mueller

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Are business ethics or profits more important?

A business exists to make a profit. If the business doesn't make a profit it will cease to exist. That's the bottom line, the most basic fundamental about business.

That being said, ethics can have a major effect on the profitability of a business. Customers can, and do, purchase with ethical considerations. Laws are written to ensure that businesses act above a certain ethical line. Ignoring those things negatively impacts the bottom line, and could even force a company to close.

An excellent example of a business using ethics to its best advantage would be the recent advertisements of pharmaceutical companies. A few years ago there was a lot of backlash against pharmaceutical companies. There customers were purchasing their product in foreign countries and online because of a large pricing disparity. Insurance companies were successfully arguing that the large price increases in pharmaceutical costs were forcing them to pass increases on to their customers. Municipalities were encouraging their employees to purchase their prescriptions from Canada. Congress was considering laws to shorten patents and interfere with pricing policies. People weren't able to afford the prescription drugs they needed to keep them alive. In response the pharmaceutical companies added programs to help low income people obtain needed medications. Those programs are a central part of their advertising, along with making sure the public knows about how they supply aids drugs in Africa and help get antibiotics to suffering children worldwide. The ads also inform us of the life saving research done by the companies.

The problems existed long before they made headlines. These companies didn't react until these problems made headlines and caused a reaction that affected their bottom line. If people were going to Canada to buy prescriptions where they were cheaper, the company made less profit on each prescription. If laws were passed limiting the amount the companies could charge for new drugs, the companies would be forced to change their pricing policies, making less profit. The companies responded to the pressure on their bottom line, not the ethical needs of the community. Watch the recent ads for the oil companies and see how they're using the same techniques.

A good business knows how to respond to the ethical needs of its customers, and how they affect its ability to keep a solid bottom line.

Learn more about this author, Laurie Mueller.

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