Ethics And Profitability Case Study

Since the Indian economy is growing; the standards of people are growing; and here comes the role of business organisations in uplifting the both. Nowadays there is a big competition which is seen in the past decades in the field of business; giving rise to challenges like competition with different business organisations and to be positioned better in the eyes of their customers or rather the consumers of their product. Business organisations are looking for other and better methods to meet and stand in the competition with their competitors and making good profit than the traditional methods of better quality {as consumers feel that competitive products are comparatively equal in terms of quality}, to provide more facilities on sell {which

Some managers feel that following ethical programs is expensive and time consuming and only reward society by it; doesn’t do any great to organisation but at the same there are many who think that following ethics program gives various benefits to all the stakeholders; be it customers, employees or public and also to the organisation; for example: loyalty from employees, product of perceived quality, customer loyalty and retention and also better financial performance. There are studies which were undertaken to see the link between ethics and profitability. A study of DONALDSON 2003 was summarised with 52 research projects which studied the correlation between ethics and profitability. The study was in favour of those who supports that there lies a positive link between ethics and profitability as out of 52, 33 research studies indicated a positive correlation between business ethics program and profitability, whereas 14 studies reported that there exists no effect and 5 showed a negative relationship. Even in the case of meta-analysis of 82 studies; Allouche and Laroche {2005} indicated that corporate social responsibility has a strong and major positive impact on corporate financial performance which inturn help the company to increase the profitability of the organisation. The concept of profit, is extensively covered by the literature in