The purpose of business is to generate maximum returns for its owners and shareholders. So therefore should the business pursue all activities that enhance profitability and increase the value of the business for the owners and / or shareholders?
I also believe that a business should behave ethically in achieving the above purpose. It is not right just to operate within the letter of the law. Businesses should also try and serve their local community and help its employees lead better lives. They should examine every decision they make based on profitability, long term business value and social responsibility.
By having real policies in place that take care of your employees and the local community it might be argued that long term this will enhance your business brand and over time lead to higher profitability.
By constantly training members of staff and wherever possible promoting from within the organisation will lead to employees that feel empowered to work harder and make better decisions. Having regards to the true well being of your employees will lead to a healthier and therefore happier workforce.
By reducing waste and promoting recycling at every opportunity, overheads will be reduced and in the longer term lead to better shareholder value. It is staggering how much resources including energy are wasted by larger companies. Having a regular energy audit and investing long term to reduce demand can only serve to make the business more efficient.
Many businesses try to serve their community by supporting local charities and sponsoring local people to better their lives. There are many ways to do this including education, sports and the environment. In the short term there will be very few perceivable benefits in terms of profitability but these actions will serve to enhance the business brand and increase profitability over the longer term.
Greed is no longer good and focusing purely on profits is unacceptable to your existing and potential customers. By embracing business ethics and social responsibility the business can benefit from increased goodwill.
