Business Ethics and Profits


By

Parimalendu Bandyopadhyay
Lecturer
B.B. College
Asansol
 


Frequently the impression of most people is that ethics and profits are mutual, opposed to one another and that if a company is ethical, it may forget about making profits. People also frequently seem to believe that a profitable company must necessarily be unethical. This is like saying that a company can make profits only through unethical means. Nothing can be more have ethical companies made profits, but more importantly it is, only ethical companies which discharged its social responsibilities, that have survived competition and turbulent changes through the years and have contributed to social welfare and have contributed to flourished undiminished.

In fact, considered from all angles, it is unethical, NOT to make profit. It is unethical, for a company, to make losses. Because, a company which can not make profits and makes losses, misutilises scarce national resources can not pay back creditors, does not make wealth for its shareholders, make huge liabilities, upsets the economy, promotes inefficiency and most importantly, can not, at any cost discharge its social responsibility, meet its welfare commitments and jeopardises the future of its employees. Such a loss- making company becomes a nuisance and a burden to the economy and has not right to exist in the market place. Moreover, it has no business to force its employees into economic insecurity, which is highly unethical.

Thus instead of profits being contradictory to ethics, business ethics dictates that the first responsibility of business is to remain profitable and generate revenue fro the shareholders and the society. Rather, it is unethical, not to make profits. Hence, the first and foremost ethical obligation of every business is to make profits for its shareholders, for its employees, for its creditors and most importantly, for itself, so that it can discharge its social responsibilities and welfare commitments. But how much profits to make, the means and methods of making it, and at what cost- that is the ethical question.

No business, however great or strong or wealthy it may be at present, can exist on unethical means, or in total disregards to its social concern, for very long. Resorting to unethical behaviour or disregarding social welfare is like calling for its own doom. Thus business needs, in its own interest, to remain ethical and socially responsible. As V.B. Dys in "The Social Relevance of Business " had stated-

"As a Statement of purpose, maximising of profit is not only unsatisfying, it is not even accurate. A more realistic statement has to be more complicated. The corporation is a creation of society whose purpose is the production and distribution of needed if the whole is to be accurate: you cannot drop one element without doing violence to facts."

Business needs to remain ethical for its own good. Unethical actions and decisions may yield results only in the very short run. For the long existence and sustained profitability of the firm, business is required to conduct itself ethically and to run activities on ethical lines. Doing so would lay a strong foundation for the business for continued and sustained existence. All over the world, again and again, it has been demonstrated that it is only ethical organisations that have continued to survive and grow, whereas unethical ones have shown results only as flash in the pan, quickly growing and even more quickly dying and forgotten.

Business needs to function as responsible corporate citizens of the country. It is that organ of the society that creates wealth for the country. Hence, business can play a very significant role in the modernisation and development of the country, if it chooses to do so. But this will first require it to come out from its narrow mentality and even narrower goals and motives.
 


Parimalendu Bandyopadhyay
Lecturer
B.B. College
Asansol
 

Source: E-mail March 10, 2007

       

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