Most people have
the incorrect belief that ethics and profit maximization are non-congruent or
parallel goals that cannot be pursued by a business simultaneously. No, profit
maximization and ethics are not mutually exclusive. The truth is, ethical
companies can be profitable, and very profitable indeed. When ethics and profit
maximization are combined, the output is responsible business. 
Ethisphere
Institute – the global leader in defining and advancing the standards of
ethical business practices and standards that fuel corporate character,
marketplace trust and business success, in its 2014 release of the world’s most
ethical companies listed many globally recognizable mega corporations like
Microsoft, T-Mobile USA and Delphi. This defies the misconception that ethical
companies cannot be very profitable. Ethics is also of utmost important for the
bottom line Small and Medium sized Enterprises (SMEs).
When customers,
investors and other stakeholders lose trust in a business because of the
business’s unethical ways, the business’s financial performance tends to
suffer.
Customers will abstain from buying from a company that sells
contaminated products and misleads customers. Investors will likewise shy away
from buying the shares of a company that lies in its financial statements,
which limits the business’s potential to grow and maximize profits.
Partner
integrity, fair employment, customer transparency, and community relationships (corporate
social responsibility) are ethical endeavors that would normally lead to profit
maximization.
Partner Integrity: Your business partners and associates expect that
your profit-generation should be ‘ethical’. Why? When you operate without
integrity, this damages their reputation. Suppliers expect honest communication
from you, timely payment of bills and ethical use of their products. Being fair
to your suppliers in the short run may be costly at the beginning butas time goes by,
your business will build strong partnerships with those suppliers which can provide
benefits to the business and its brand in the long run.
Customer
Transparency:
Most issues in profit maximization focus on customers, given that customers are
a direct revenue source to a business. Profit maximization may dictate that a
business should attract customers and create sales at all cost. But ethics
suggests transparency, honesty in a business’s dealings and a customer-centric
attitude. A business may miss sales by being honest in the short run. However,
building a good reputation can benefit a business in the long run with customer
loyalty and greater long-term profits.
Fair
Employment:
Labor costs are among the most burdensome costs to any business. When a
business embarks on a blinded pursuit of profits, it may be tempted to hire
illegal workers, pay extremely low wages, evade from paying workers overtime
hours, etc. This has its own legal
implications though the business may be saving in the short run. When the
working environment is unethical and inconducive for employees, they do not
work effectively which negatively affects long-term productivity and
profitability.
Running your
business in an ethical way stewards your business to success.
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