Economics Assignment Paper on Are profits the only business of business

Are profits the only business of business

    The popular idea that the sole purpose of a business is to make profit was developed by Milton Friedman. However, Robert Almeder was of the opinion that morality must be maintained at the market place (Roy). It is widely believed that a business that is making super profits is the most successful business. Most people start businesses with the thought of making profits ranking as number one on their wish list. Even though the urge to make profits should motivate a businessperson or a company to work even harder, it should not be the only factor that sustains the spirit of doing business. Proponents of the argument that the sole responsibility of doing business is to maximize profits believe that a business will do anything to please its consumers and eventually earn profits. They also insist that in case a business produces a product with harmful consequences, consumers will identify the consequences and act rationally. On the other hand, the business will make the necessary corrections (Roy). However, the idea of prioritizing profits has led to unsafe products, global warming and massive pollution. Additionally, when most companies realize that they are making super profits, they are normally willing to bend some rules to sustain the profits at the expense of the health and wellbeing of the consumers. Therefore, it is logical to reason that companies should not only be profit oriented but also be socially responsible.  

     Unlike in the past, where consumers were only concerned about the quality of products, currently, most companies are racing towards a sustainable economy. Therefore, the companies are under immense pressure from the consumers to act responsibly and ethically. Gone are days when a company executive would involve himself in a morally degraded behavior without anticipating a backlash from the consumers. Moreover, the fight against corruption has been on the focus of late. Companies want to compete on a level playing field. Hence, they cannot just focus on profits while forgetting other aspects of their operations (Roy). When a company works ethically, it tends to outpace competition. Once customers are aware of the company’s ethical behavior, they will see the company as a trusted partner and therefore, the company will not have to worry about the loyalty of the customers.

     It is also worthy to note that there is another side of the coin. When a company is in the business of selling a commodity and the consumer is not concerned about the innovation or service involved in producing the commodity, but only wants to buy the commodity at the cheapest price, the business-for-profit approach may work. The company executives may decide to make the product cheaper than competitor’s products and even pay the lowest wages without worrying about the high turnover that may result from such a decision (Erica).

     Monopolies are the only businesses that are sure of surviving as profit-only businesses. This can be attributed to the fact that there is no competition. Therefore, even if the company decides to reduce the quality of their products or sell them at a higher price, they are sure of selling and making profits. Nevertheless, in the wake of corporate social responsibility and legal suits against large companies for malpractices, most companies are shifting their philosophy from being profit-oriented companies to companies that embrace social responsibility. Recently, large companies such as Walmart have been sued by a number of consumers who are determined to get the best services from their most trusted supermarket. In a nutshell, while every business aims at making profits, such issues as social responsibility and ethics also determine how much the business can make in terms of profits.

Works cited

Erica, Andersen. What Happens When Leaders Only Care About Money? December 18, 2013

Web June 10, 2014. Retrieved from http://www.forbes.com/sites/erikaandersen/2013/12/18/is-greed-good-and-does-it-work-in-business/

Roy, Jacobs. Good business: Why placing ethics over profits pays off.March 2014 Web June 10,

2014. Retrieved from http://www.philips.com/e/innovationmatters/blog/Good_business_Why_placing_ethics_over_profits_pays_off.html