Question

Are profitable ethical businesses profitable because they are ethical, or are they ethical because it can lead to profits? Consider companies such as Ben & Jerry’s, Body Shop, and Timberland in your answer.

Answer 1

Because it leads to profits, hence profitable businesses are ethical, is a very awkward way to even look at this because it shall hardly work that way round. It is to be also noted that even the companies like Body shop are profitable at the home countries far more than that in host countries. When a retailer intends to expand its horizon beyond the domestic boundaries, it is very essential that the host country consumers have a brand recognition to the retailer’s brand so that it becomes easier to strike a chord with the potential customers of the new market. In fact, the retailers primarily need to push themselves to establish themselves as a brand to be reckoned with rather than being concerned with the actual sales in the overseas markets. However, the issue with many retailers is that they failed to understand this requirement of investing a considerate amount of money to build brand recognition instead of pushing sales through setting up of markets on the international front. Therefore, irrespective of whether Body Shop is ethical or not, it doesn’t really do exceptionally good globally. However, the company is still making profits in the home market. This is so because, they do not compromise with the code of ethics in their Organizational culture. The home country consumers look up to companies like Body Shop and it is due to their ethical code of conduct that consumers trust their products whole-heartedly thereby helping them boost their sales and hence make them profitable businesses.