Forum Post Article Sample -The Business of business is business -Ethical conduct vs Profit first

The notion that there is no ethics in business and that the business of business is just business has been a long-standing debate in the business world. This concept is known as the “profit-first” mentality, where a company’s sole objective is to maximize profits, regardless of the impact on stakeholders such as employees, customers, and the environment (Rodrigues & Craig, 2017).

Proponents of the “profit-first” mentality argue that businesses are created to generate profits (Friedman, 1962; 1970) and have no obligation to act ethically beyond the bounds of the law. In their view, businesses are not responsible for the well-being of their employees, the environment, or any other stakeholder (Kumar, 2020).

A practical example of this is the actions of Enron, a company that engaged in accounting fraud to inflate its profits. Enron’s executives were only concerned with maximizing profits, even at the expense of their employees’ retirement savings and the trust of their shareholders (CNN, 2013).

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Conversely, opponents of the “profit-first” mentality believe that businesses have a responsibility to operate ethically and consider the well-being of all stakeholders. In this view, a company’s long-term success is closely linked to its ethical conduct, as it builds trust and loyalty among customers and employees (Paine, 1994).

An excellent example is the Body Shop, which built its brand on ethical and sustainable practices. By prioritizing the environment, fair trade, and animal welfare, the Body Shop attracted customers who shared their values and were willing to pay a premium for their products (Body Shop, 2022).

While some argue that businesses have no obligation to act ethically, others believe that ethical conduct is essential for long-term success. With the trajectory of the business environment, businesses must encompass ethics in their operations and activities to remain relevant.

References

Friedman, M. (1970). The social responsibility of a business is to increase its profits. The New York Times Magazine, 33(13), 32-33.

Kumar, S. (2020). Business Ethics and Corporate Governance. Wiley.

CNN (2013). Enron fast facts. Available at https://www.cnn.com/2013/07/02/us/enron-fast-facts/index.html

Body Shop (2022). About. Available at: https://www.bodyshop.in

Paine, L. S. (1994). Managing for organizational integrity. Harvard Business Review, 72(2), 106-117.

Rodrigues, S. B., & Craig, R. J. (2017). Ethics in business and management: Is the nature of work changing? Journal of Business Research, 81, 1-7.