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Are business ethics or profits more important?

This Debate has 18 articles on the Ethics side and 7 articles on the Profits side. Click here to see all the articles rated and ranked by Helium members.

Ethics

Profits

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Ethics

From my perspective this topic is similar to the long-debated question of "which came first the chicken or the egg." One could make a perfectly logical argument for either view. In a broad sense, profit is the ultimate goal for business-related activity. This is our foundation of capitalism, of which I am in full support. Nonetheless, I think business ethics are more important than profits. I would contend that the most effective way to achieve the goal of generating profits is to participate in behavior that embraces a system of moral values and standards that would make customer satisfaction the first priority. For me that translate into a simple approach of providing products/services that I myself would expect to purchase in good faith in the market place. In other words, what many refer to as the golden rule - "treating others as you would expect to be treated."

As I understand profitability, it is a matter of successful marketing and sales to generate revenue, while at the same time controlling costs associated with producing the end product/service, to yield a desired margin of income, or to maximize returns to shareholders. Looking closely at the basic equation of profit is equal to revenue minus expenses; I think it is critical to maximize resources by controlling expenses to the degree that it is possible on the front and back end. On the front end it means utilizing quality raw materials and practices that focus on that which is best for the end users. Business ethics is important because it facilitates behavior that would for example motivate you to resist the temptation of using cheap or inferior materials for profit sake. After all in the long run that may cost you more evidenced by excessive replacements and re-work. Worst yet, it could also mean losing customers. On the back end it means employing customer service strategies that you yourself would expect by addressing customer inquiries quickly and to a reasonable level of satisfaction. I emphasize reasonable because it is not possible to right every perceived wrong, and it is highly unlikely you will make everyone happy.

The recent corporate scandals we have witnessed in our business environment reinforce the thinking that it is important for companies to be ethically responsible. Not only with regard to how a company treats its' external customers (the end-users), but its' internal customers as well. It is difficult to imagine the decision-makers in those situations thought about anything other than their own well-being. It is obvious they did not think about what was in the best interest of their employees, stockholders, suppliers, or the overall economic health of the industry. All in all, I would conclude that business ethics is more important than profits. Just as it takes a chicken to produce an egg, it takes behavior that embraces a system of moral values and standards to establish an ongoing customer base that in fact produces desired profits.