Defending: Ethical businesses have a greater probability of being more profitable than unethical ones?
Introduction
Arguably, the issues of ethics in business have become one of the debatable factors that influence the running of business in the globe. As a matter of fact, many scholars assert that ethical businesses have a tremendous possibility of being more profitable than ethical ones. On the same note, refute this statement claiming that ethics does not influence the profitability of business. Ethical businesses go beyond serving the customer in an ethical manner, it entails conducting various activities in the business according to stated ethical standards. Ethical business conduct themselves ethically by encouraging all the responsible stakeholders to engage in on issues pertaining ethics in business so as to bring in several benefits to the company. It should be noted those who refute the relationship between ethical businesses and profitability are wrong since unethical businesses affects the financial stability of the business and tarnishes the image of the entire business leading to reduction of future opportunities. Various evidence has been raised on businesses that are unethical yet they still make a lot of profits. As a matter of fact, such business will only make profits for a short run, but in the long run the profitability of the business is put in danger. One of the examples of business with such credibility is Enron; they made a lot of profits, but faced a lot of challenges later due to unethical behavior in business. In general perspective, I defend the fact that ethical businesses have a tremendous probability of being more profitable than unethical ones.
Reasons for supporting the debate
Business management team asserts that maintaining ethical standards in the business is can be costly in the short run, but in the long run the move to focus on ethics will yield maximum profit. Ethics without doubt plays a crucial role in the profitability of the business, and it should therefore be part of the business. The existence of business in society today requires the operations to be held in an ethical manner. Perhaps, businesses cannot cannot sustain its profitability when it is conducting business activities in unethical ways (Fleming, 2003). Studies have been carried out on the relationship between the profitability of the business and its ethical way of operations. Evidence shows that most companies and businesses that operate in an ethical manner made a lot of profits as compared to those that run unethical businesses. Heliem.com carried out a study to determine whether ethics play a role in the profitability of the business. The population that was subjected to study was small but the outcome showed that three quarters of the chosen sample believed that ethics was a crucial factor in the profitability of the business (Ferrell et al, 2011).
The profitability of the business is always measured on everything that the business undertakes. One of the greatest measures is the aspect of practicing good ethics in business and outside businesses (Fleming, 2003). In such a scenario there are various factors that make up ethics in business, these include customer relations, respect, integrity, as well as social ability just to mention some. The profitability of the business is linked to this aspect that direct or indirect. The respect that is practiced in the company is reflected on the profitability of the businesses.
In the 21st century, many business focus in attaining a competitive advantage in the market place in order to remain competitive in the marketplace. Perhaps, ethical practices ensure that the business has a positive image in the public and among the consumers. This aspect is reflected by becoming the best in the marketplace leading to profitability. The consumer is always rational and is in a position to choose the best that is offered by the business. Based on the statement, it is focused on the fact that every business must focus on ethical issues before imagining of profitability and success (Ferrell et al, 2011. When the business adheres to ethical issues, it will be automatically reflected through profits. Research has shown that there is a great possibility of achieving good through doing good.
For many decades, many experience in the field of business has confirmed the argument the link between ethics and profitability. There are many businesses that have started small, but have for many decades improved from good to best (Fleming, 2003). In fact, the small businesses that perform ethically win the loyalty of consumers, which leads to increase in sales that lead to increased profitability. Just like in employment, employees who do good things in workplace receive promotions, job opportunities, as well as awards. Therefore, the concept of ethics in business is essential for profitability.
Decisions making in business are very crucial in the profitability of the business. It should be noted that ethical businesses make good decisions that is focused on doing good. The decisions that drive the business to success is guided and based on ethical issues. Ethics will ensure that there is no fraud, misappropriation of funds and corruption within the business. Therefore, general absence of such challenges will automatically grant the organization's profitability. Hence, it is evident that ethical businesses have a tremendous probability of becoming profitable as compared to unethical businesses (Ferrell et al, 2011).
High degree of integrity and honesty among the business representatives is reflected in the rate of return. The business always receives higher return as compared to those that lacked integrity and honest. It is essential to comprehend that the strong base of ethics in business comes from integrity and honesty. Ethical business that bases its activities on honesty and integrity have the potential of becoming profitable. For example, the cost of fraudulent and unethical activities committed by employees in the United States is approximately US$400 billion per year (Ferrell et al, 2011). Such losses are significant to the business success and profitability.
Business ethics are beyond the legal system, this is because it develops trust among responsible stakeholders, which is the business and individuals. Establishing trust and confidence in business depends on how ethical the business is, which is then converted to profitability. Ethical environment in business ensures that the resources of the business, and activities are done in the right manner (Ferrell et al, 2011). When this takes place, there will be no waste of resources of the business, which leads to profitability.
Conclusion
In conclusion, it is evident that ethical businesses are in a position of making more profits as compared to unethical ones. The main crucial move that businesses should do is to ensure that an ethical environment is developed in the business. Since it is essential that business ethics should be put into consideration, business stakeholders must create awareness on issues pertaining to ethics. Leaders and the management team must be able to ensure that the decisions made in the business are ethically oriented. The leaders must also be the role model and set a good example of ethical concerns. Based on my experience in the field of business, I am in a position to develop an ethically oriented policy that will ensure that businesses make profits by adhering to ethics. The studies carried out shoes that businesses that operate in an ethical manner enjoy the competitive advantage over other unethical competitors in the marketplace. Ethical businesses must always update its activities by adapting the upcoming ethical issues so as to remain competitive in the marketplace.
References
Ferrell, O., Fraedrich, J & Ferrell, L. (2011). Business Ethics (8th ed.). Boston: Houghton Mifflin
Fleming, J. (2003). Profit at any cost?: Why business ethics makes sense. Grand Rapids, Mich: Baker.
