Question

Question) Describe how ethics and profitability are not matching principles.

In your answer, describe ethics and profitability as opposing principles with examples of businesses (1000 words).

(Please provide in depth analysis of why ethics and profitability are not aligned and contradicting principles (1000 words))

Answer 1

Business Ethics refer to the study of what is right and wrong while doing a business. It is a belief about what is morally correct or wrong. Profitability is the ability of a business to earn a profit. The two principles- Ethics and profitability are strongly opposing. For example Accepting bribe is profitable but completely unethical. Both principles cannot go hand in hand.

Ethics involve honesty . But a business man cannot sell its products without exaggerating qualities of the goods to be sold. For ex. Cloth retailer would claim that product's actual cost is high but he is giving discount and it is the lowest price available in the market. This is unethical but may result in profitability.

Ethics involve fairness. But bieng totally fair may throw business men out of the market where they would be chasing their very existence.For example Fruit vendors may weigh less vegetables and fruits and charge for the full quantity. This is a plus point adding to his profitability but at the same time it is hundred percent unethical.

Ethics involve staying within the boundaries of law. At the same time it may hurt profitability of business. For instance Jeweller gives jewellery without charging GST to customer to impress customer by reduceing his cost thereby increasing his profit. At the same time he acts unethical by bringing a loss to government's treasury.

Ethics is a big sphere which includes accountability within it.

Avoiding accountability increases profitability but makes a business man an unethical bieng. For instance An accountant can earn more money by influencing it's customers that he will take all the responsibility for the return of income filed by him. He made money today but later on refused to deal with income tax department when scrutiny notices arrived.

Ethics involve respect for employees. But disregarding employees by leading them to work for more than ethical working hours , delaying salaries , and asking them to work more than their actual emoluments can bring a rise in profits of business . But it is the most unethical act that a business can do.

In order to be ethical , one has to forego the aim for huge and unworthy profits. But one who needs short term profitability has to forget about ethics and go with undesirable ways to get richer. Thus both principles can never be aligned in short run and contradict each other strongly.

Recent scandals at Theranos, Fiat, and Volkswagen are just the latest examples of companies under investigation for ethical breaches in attempts to maximize profits. This evidences that both principles are completely contradicting.

  Moreover a corporation’s failure to turn a profit is considered as it's failure to fulfill its primary obligation. This further induces business man to go unethical and fulfil its primary obligation i.e earning profits.

We can see various examples in our daily routine such as milkmen adding milk to water i.e getting unethical to gain profit . Had he sold pure milk he would not have earned abnormal profits.

If a business want to survive in long run , it has to forgo it's profit motive and act ethical. For example ZOMATO forgone it's profit motive by charging a very low delivery charges and promptly delivering correct orders without any fraud. Again one principle had to be left behind in order to achieve other.

A concluding example would be the business practices of Toyota when it first introduced its vehicles for sale in the United States in 1957. For many years, Toyota was content to sell its cars at a slight loss because it was accomplishing two business purposes: It was establishing a long-term relationship of trust with those who eventually would become its loyal U.S. customers, and it was attempting to disabuse U.S. consumers of their belief that items made in Japan were cheap and unreliable. The company accomplished both goals by patiently playing its long game, a key aspect of its operational philosophy, “The Toyota Way,” which includes a specific emphasis on long-term business goals, even at the expense of short-term profit.

Thus both principles are contradictory in short run and cannot be reconciled al all.