http://reputationalcompliance.com/2012/06/20/the-road-to-downfall-the-most-common-unethical-business-practices/
While browsing my classmates’ blogs, I came upon this article by Raza Razi, in which he, while responding to another classmate, Farwah Ahmed’s blog, argues that social responsibility and ethical practices leads to increased profits, while unethical behaviors leads to a poor reputation and as a result reduced profits.
While I agree with this argument in specific situations, he gives an example where two competing companies sell soap and one company, Company Y, uses a cheaper ingredient to save money, but it is “not great for one’s skin and could cause skin irritation”. He then postulates that this would lead to increased sales initially, but it would decrease over time as people noticed the quality decrease.
I have two issues with this example. One, I do not believe this necessarily constitutes an ethical issue. Companies are not socially irresponsible if they do not use the finest ingredients in their products and there is nothing inherently wrong with trying to reduce costs. In addition, as long as they notify their customers that their product is not suitable for everyone’s skin, they are not necessarily responsible for any harm caused. Furthermore, even if this is a issue of social responsibility, Company Y still made extra profit through acting unethically, which disagrees with Raza’s main argument. Overall, while I believe that social responsibility is an important characteristic for companies to hold, it does not always lead to profit, and oftentimes, unethical choices directly lead to increased profits.
Works Cited
Can Ethical Practices Increase Profits? A Response to Farwah Ahmed’s Blog
https://blogs.ubc.ca/farwahahmed/2014/09/10/corporate-social-responsibility-beneficial-or-detrimental/
