Ethical Practices On Long-Term Profitability

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Benefits of Ethical Practices on Long-Term Profitability During my years of study in college I have been taught many different aspects of business that have to be taken in to account in order to insure long term profitability. These topics range from accounting, management, operations, finances, marketing and economics. All these aspects are truly important when running a business but in today's market, I believe that having an outstanding organizational image has evident benefits on long-term profitability. I would define organizational image or "reputation" as the collection of actions and decisions made at all levels of the company through its years of operation. This specific feature of a company has an increased importance because currently every individual has immediate access to information and thus if any company does some wrongdoing, consumers will surely find out and this will greatly affect the company's future profitability. Some might argue that creating a good image for the company is a waste of time since it pulls attention away from the main goal of any company, which is generating profits for its shareholders. I would say that since companies generate money off consumers and depend on them for the generation of profits, they should strive to meet at least the most basic of the level of corporate social responsibility and give back to the communities. In my life, I have seen many examples of how a weak ethical standards have damaged many prominent companies. A good example of this would be a Dominican Company that wanted to open a cement factory in a environmentally protected area and Dominican citizens did not allow this to be constructed, leaving the company no choice but to exit the Dominican market. (Pozo, 2... ... middle of paper ... ...of some sort, a transaction that is purely based on trust. If consumers and investors have any sort of doubts on the ability of the company to keep its promises, the company runs the risk of having a massive withdrawal of funds. Due to this, financial institutions must assure that at all time their employees and managers are acting ethically. In conclusion, I believe companies should implement strong ethical policies in order to ensure that their reputation will stay intact. Besides that, I believe that a good ethical policy will also provide organizations with the competitive advantages of innovation, lower cost production, generation of new revenue streams, increased investor confidence, attract higher quality employees and strengthen employee retention. Overall, ethical policies are important because they are the foundation of decision-making by top management.

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