Also, looking it from all points of view, it is very unethical for a business not to make a profit. This is more of saying like a company which doesn’t make a profit, will obviously make loss because they must have misutilise the resources and they are unable to pay back the creditors, the shareholders, the economy, their social responsibility and also they put the future of its employees at risk. Due to this fact, instead of profits and ethics to be against each other, it can be seen that business ethics must be handle seriously and firstly so as to make the business profitable and also generate dividends for the shareholder and the creditors. The first motive of an ethical obligation which every business must have is to generate revenue for its shareholders, creditors, employees and itself so it can be able to handle its responsibilities and commitments. Business that is disregarding unethical behaviour or social responsibilities is like calling for its downfall. So for the interest of the business itself, it has to remain ethical and responsible. The addiction of profits making only in business had led to different unethical behaviour in business organisation which will definitely lead to the doom of the business. Business and society has been inter-dependent for ages. For a business to survive in a society, it has to make profits. Business without profits will crumble and die on the long run no matter how big the objectives or aims of the business might be. Profit in other view is like the air which every business aim at to breathe, without air, the business will never survive.

 

Although the main motive of a business is to make profit, but the addiction of profits must not overcome the aim of making the environment where the business is taking place feel the impact of the business being around them. An extreme addiction to profit making only could jeopardize the long running of the business organisation. Also this aim of profit alone can cause a problem with them society which they won't really trust the product of the organisation anymore, thereby the sales will reduce drastically, when the business will eventually end up in doom. Thus, business organisation should focus on the society in general by adapting to ethical principles and corporate social responsibility. For example, organisation such as Enron has been led to doom simply because the organisation is only addicted to profit maximization alone without caring about their society responsibility. On the other hand, organisation that implements and demonstrates social responsibilities has survived in the long run. Hence, business organisation needs to show their concerns and care for the well being of their neighbour, and community which they operate. Corporate Social responsibility has earned society patronage that is why a lot of business has been adapting to use CSR. Furthermore, the aim of most organisations today has been to understand and implement corporate governance by adopting CSR. However, profit maximization with a social objective is not without its share of criticism or opposing views (Smith 1776), he (Smith 1776) also favoured profit maximization as the only objective of business. Further according to him, what is good for an individual is also good for the society. Later,(Marshall 1890) refined Smith’s view into a separate economic theory which state that especially under competitive market conditions, profit maximization by firms leads to the most efficient allocation of resources, lower prices and larger aggregate output than under monopoly. The aim of making profit must not overwhelm the societal responsibility. Ethics could be seen as a constraint on profitability. This view indicates that ethics and profit are inversely related (Bowie 1998).They both go hand in hand, so organisation does spend lots of money on CSR by investing in social amenities, infrastructure, community development, charity, etc.

 

In addition to, there are four components of customer value namely (results, process quality, price, and customer access cost), ethics has a strong influence on customers’ perceptions of the level of process quality in doing business with an organization. As customers’ overall feelings regarding the quality of processes in maintaining a business relationship with an organization are based on customers’ general perceptions of five key items (Parasuraman, Zeithaml and Berry 1988):

 

(1) Being able to count on an organization delivering on any promises made to a customer;

 

(2) Feeling that organizations and company representatives will respond to customer needs in a timely manner;

 

(3) Knowing that organizational representatives have the authority to deliver on commitments made to customers;

 

(4) Feeling that organizations see issues and opportunities from customers’ points of view; and

 

(5) Being able to identify tangible results from using organizations’ products and from maintaining business relationships with the organizations.

 

Of these five process quality items, four are related to organizational behaviours grounded in ethical business practices. First, an organization must be committed to delivering on promises made to customers. Second, organizations must quickly respond to customers’ issues (e.g., complaints). Third, when company representatives make personal commitments to customers, the representatives are committing an organization to the promises that are either explicitly or implicitly made. Fourth, it is important ethically that organizations consider the impact of any actions or behaviours on customers. For example, Enron executives made bad internal management decisions resulting in unethical practices. These unethical activities, while primarily internal to the company, had far-ranging impacts in the marketplace on customers and all stakeholders in the company. Ethics in a business is also the foundation of processes by which customers develop feelings of trust in the organizations, very directly impacts customers’ perceptions of the overall process quality in doing business with organizations. While customers might feel they are getting good results from using a company’s products; that the price of the products is reasonable in the market compared to competitive products; and that the cost (time and effort) of attaining the products is in line, if customers do not trust organizations within the context of process quality, their perceptions of value in doing business with the company will be degraded. Overall, customers would rather pay higher prices and maintain business relationships with ethical and trusted organizations than get good price deals from organizations that do not deliver outstanding process quality. As a business goes more ethical, the more the trust the customers will have in their product which simply means their sales will grown up and it will generate a lot of profit for the organisation on its run.

 

Heskett et.al. (1997) explains that this customer satisfaction leads to higher levels of customer loyalty. It should be pointed out that customer satisfaction and customer loyalty are two very different variables in the model. Customer satisfaction represents an attitude. That is, how does a customer feel about the business relationship with a business organization? Customer loyalty, on the other hand, is an action. That is, customers maintain business relationships and continue to do business with organizations. It is this customer loyalty that leads to three very profitable behaviours by customers. First, loyal customers purchase more from organizations over a given period of time generating higher levels of revenue compared to not-so-loyal customers. Second, loyal customers repeat purchases from organizations on a more frequent and longer period than do other customers. Third, loyal customers refer other prospects (e.g., friends, relatives, neighbours) to the organizations they trust and are highly satisfied with. These referred customers then become more satisfied and more loyal in a shorter period of time than did the referring customers. These customers that are highly satisfied and highly loyal (based on perceptions of high customer value) to organizations are much more profitable than other less loyal customers. As indicated above, loyal customers generate more revenue. These loyal customers, however, cost much less to market to. Business organizations with high percentages of satisfied and loyal customers can invest less financial resources in costly marketing programs aimed at these customers. For example, high investments in promotions – as compared to attempting to increase market shares by attracting customers from competitors – are not required when marketing to a loyal customer base. Additionally, salespeople are not required to contact these loyal customers as often and the contacts that are made are to maintain positive and profitable relationships rather to directly sell products. Thus, these organizations that have delivered high levels of customer value through maintaining higher quality relational processes based on ethical behaviours have the potential to generate sustained growth and higher revenues over a longer period of time while incurring less marketing expenses resulting in stable and growing quarterly and long-term profitability.#p#分頁標題#e#

 

外部目標市場—External Target Market

 

CUSTOMERS

 

Satisfaction Loyalty

 

Value concept

 

OVERALL VALUE

 

內部群體的滿意度—Internal Cluster of Satisfaction

 

PRODUCT ORGANISATION EMPLOYEES

 

Revenue,

 

Growth &,

 

Profitability

 

The customer value profit chain model (Journal of Business & Economics Research –November 2006 Volume 4, Number 11)

 

Example, based on the concept of the value profit chain, the role of business ethics as it relates to process quality and resulting customer value perceptions is very apparent.(LeClair, Ferrell and Fraedrich,1998) describe five well-known successful companies that have invested organizational resources (both financial and people) in developing cultures of business ethics and integrity. One of these five companies is highlighted below:

 

Waste Management has a small trash collection service. Today, the company is the largest solid waste and disposal company in the world with annual sales of over $9 billion. Several years ago the company was fined $2 million for antitrust violations and another $12 million for violation of pollution ordinances. Waste Management is working hard to establish a culture of ethical business behaviours. The company developed a code of ethics and established training programs to insure employees understood exactly what the company expected of them when faced with ethical issues. Employees are continually reminded that the characteristics of fairness, honesty, integrity and trust lead to a marketplace reputation of delivering high levels of value to customers. This reputation has resulted in a high level of satisfaction and loyalty among the company’s customers.

 

According to my findings, it has been well explained that companies of nowadays don’t show curiosity about the profit level at any point in time, rather they focus on their customers because their satisfaction alone will definitely result to them being loyal to the company and thereby bringing in more customers where they will eventually make profit on the run. It’s a way of showing that they have great concerns about their customers. Customers feel cared for, listened to when the organisation respond to their complains because the company must show that they are not only concerned about their own sales alone, but at the same time they are concerned about the customer satisfaction of the product they are buying. It’s very safe for a company to be more ethical so it can also be profitable over the long period of the running, but a company that is unethical is much likely run at loss because customers will lose interest in them. Also we have several examples today of companies that have suffered financially for ethical lapses. ENRON, Global Crossings, and World Com are either gone from the business landscape or exist in very different forms. These examples of ethical missteps didn’t cost just the companies’ customers. The negative financial impact on employees who had invested their retirement in the companies was astronomical. Additionally, investors lost millions of dollars due to the negative impact these companies had on the financial markets.

 

總結—Conclusion

 

There are still organisations that still believe unethical behaviours will not have a negative impact on the organisation. There are still two good reasons that business organizations should be concerned about their ethical reputations (Business Ethics 2003). One is that if a business is with unethical practice, one they become public, it can simply lead to government intervening in statement of account. For example, a company trying to adjust its statement to show they are making loss just to try and avoid tax, as soon as their statement of account are being released for their shareholders, having paid their dividends, if government get to know, they will definitely intervene and this can lead to the damaging of their image. An ethically responsible organization is one, which has developed a culture for caring for the people and for the better environment as a whole. Ethics has a considerable influence on the economy for efficient and smooth functioning. Ethical behaviour enhances the quality of life.

 

建議—Recommendation

 

It is a must for a company to stay ethical simply because it has a long role to play in the life of its environment. A company that is ethical will gain a lot of trust and faith from the customers and the public, having gained that; there will rise in the sales of the company which will definitely bring about profit for as long as the company is running.

 

參考文獻—REFERENCES

 

Adam Smith (1776); The Wealth of Nations.

 

Alfred Marshall ( 1890): Principles of Economics.

 

Bowie, Norman E., (2000), Companies Are Discovering the Value of Ethics,Business Ethics 00/01, 12th ed., John E. Richardson Editor, McGraw-Hill/Dushkin, Guilford, Connecticut, pages 150-152.

 

Business Ethics (2002/2003), 14th ed., John E. Richardson Editor, McGraw-Hill/Dushkin, Guilford, Connecticut.

 

Heskett et.al(1997);The Service Profit Chain.

 

Journal of Business & Economics Research –November 2006 Volume 4, Number 11

 

LeClair, Ferrell and Fraedrich (1998),, Integrity Management.

 

Parasuraman, A., Zeithaml, V.A., Berry (1988): 'SERVQUAL: A Multiple-Item Scale for Measuring Customer Perceptions of Service Quality'.

 

William K. Frankena(1973) : Ethics,second edition.