The question that whether the companies should put the ethics and their social responsibility ahead of profit making or not is a very old question on which no conclusive answer could yet be given. Although most of the organizations are contributing to the society there are still two schools of thought on the idea of ethics and social responsibility put ahead of profit making. For the purpose of clarifying the argument I would highlight the point of views of both the schools of thought and then will explain my point of view.
As per those who favour this idea of putting ethics and social responsibility before profit making the organization is a part of the society like all other parts of the society the organization should also contribute for its welfare. Moreover, they say that there is a direct relationship between the growth, profitability and other economic factors and the treatment of the organization to its employees, customers, suppliers and other stake holders which means that if the treatment of the organization to all the above mentioned people is improved the profitability and the growth of the organization is also expected to show an increasing trend.
On the other hand those who think that the prime objective of the organization is to earn a good profit for its share holders say that the organization or the mangers in the organisation are liable to the shareholders only coz only the shareholders are the one whose investment is stuck in the organization. Moreover, the shareholders invest in any company for the purpose of gaining profit and not for the purpose of benefiting the society. In net shell their point is that why the investment of the share holders should be used for the benefit of the society. Thus, one should not be benefitted at the cost of another.
After presenting the point of view of both the schools of thought I would like to present my opinion. In my opinion the organization should put ethics and social responsibility before profit making. I say this because the fulfillment of ethical and social responsibility enhances the company’s profitability. For example a company who has joined hands with any non-profit making for the development of a welfare project from the sale of each unit it produces, will be able to sell more of its units once the consumers are informed about the company’s collaboration with such a non-profit making organization.
Moreover, by doing such an act the company will be able to gain a good image in the market and even after the collaboration with the non-profit making organization lapses the company will be able to make good profit due to its goodwill. Moreover, if the company is not doing any unethical act the company is always safe and is never accused by the regulators neither does it has to pay any sort of penalty or fine. Thus the company is in benefit if it follows the ethical guidelines.
Moreover, if the company proves to be an equal opportunity and ethical employer it can retain its highly qualified and skilled labour for a longer period. Otherwise any highly qualified and experience personnel would not like to join the organization which does not have a good reputation in the industry, market and also with the regulators. Thus, after the above discussion I can say it with great confidence that a company is always benefitted even if it keeps the social and ethical responsibility ahead of the profit because this may be an indirect way of increasing the company’s profit.
Moreover, if the company is not doing any unethical act the company is always safe and is never accused by the regulators neither does it has to pay any sort of penalty or fine. Thus the company is in benefit if it follows the ethical guidelines. Moreover, if the company proves to be an equal opportunity and ethical employer it can retain its highly qualified and skilled labour for a longer period. Otherwise any highly qualified and experience personnel would not like to join the organization which does not have a good reputation in the industry, market and also with the regulators CONCLUSION
Ethics and corporate responsibility has become very integral in today’s world where there is a lot of pressure to the company’s to work for the betterment of the society where they are operating. Companies’ have realized that in order to make their mark in to the society they have to give something back to the community where they are operating. The various approaches that have been discussed are all the ways by which an organization can show its concern towards the society either in the form of abiding the laws by the government or by going an extra mile to prevent the society from the future troubles.
Thus out of all the approaches the social responsiveness approach is though the most acclaimed one as it does not only includes abiding the laws of the government but at the same time the company pays an extra attention to the future problems of the society. In the question of whether profit making or the social corporate responsibility is important I favored the latter one as according to my opinion it automatically leads to profit making.
By acting in a socially responsible manner the company is able to build good image which in return boosts the sales and consequently have an impact on the profits. Thus in the conclusion I would say that one can never ignore the fact that the ultimate purpose of any organization is profit maximization but at the same time the organizations also have a responsibility towards the environment where they are operating.
Anderson, B. (2004). Bringing Business Ethics to life. Miami. Anderson, B. (2000). Root Cause Analysis.Birmingum. enviornment, O. a. (2000). John. Keith. Queenstown. http://fbi. cqu. edu. au/FCWViewer/view. do. (n. d. ). Retrieved July 30, 2010, from www. fbi. cqu. edu. au Iyer, G. K. (2000). Teaching International Business. Madras. Kaplan. (2008). Business Studies. London: PBP Publishers. louis, J. (2007). American Code of Corporate Conduct. The Business , 45-47. Philip Kotler, N. L. (2003). Professional Ethics and Social Responsibility. Birmingham. R, R. (1999). Ethics and Corporate Responsibility. Amsterdam.