Business Ethics: Exploring if Profit is the Only Business Purpose?

This essay delves into the central question of whether profit should be the sole purpose of a business. It examines the evolution of business objectives beyond mere financial gain, emphasizing the importance of customer satisfaction, employee welfare, community development, and environmental responsibility. The essay references various business theories and the works of Peter Drucker to argue that while profit is necessary for innovation and marketing, it should not be the only driving force. It highlights the significance of ethical business practices, corporate social responsibility, and the need to consider the interests of all stakeholders, including customers, employees, suppliers, and the community. The essay concludes that businesses must balance profit maximization with other objectives to achieve long-term success and maintain a positive societal impact.

Should profit be the only
purpose of a business?

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSIONS..............................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
In recent business time, large number of business firm operate in different industry in
order to make customer demand fulfil and attain profit from various business activities. In
general, business is a deeply human institution but its main purpose in not to generate as more
money as possible. Nowadays, various firm provide several beneficial activities to consumer just
for the purpose to feel them special without considering profit as their main motive. In this essay
the discussion about “Should profit be the only purpose of a business” have been discussed.
MAIN BODY
In present scenario, the main purpose of business firm in not to make huge profit this is
because these businesses wants to grow, expand customer base and expand their operation at
global level. It is observed that an economy thrives when large or small organisation are running
well and have diversified business operations. Therefore a firm is to be consider successful when
it is able to earn huge profit in short time, but it is stated that profit is just only one motive that an
organisation tries to attain, over time, other pressing objective that may emerge. The other
objective could involve development, sudden reactions to environmental modification or some
other social responsibilities.
According to Peter. F. Drucker, the main objective of a business firm is must to
accomplish a reasonable and equivalent profit that support to recover the risk of each kind of
economic activity and further support to avoid any type of loss (Peter. F. Drucker, 2019). But it
was also stated that the earning of good and huge profit margin must not be the only objective of
companies any more than eating is the objective of living. Therefore he also wrote, “The client is
the fundamental of a company and support it in creation of good market value. To provide with
the basic requirement and needs of a customer, society pass wealth-producing beginning to an
enterprise”.
There are different reason against the profit maximisation of a firm like when companies
desire to raise profit by huge margin then the directly ignore the basis interest of labour, staff
member, consumer and as well as the society. Different business organisation working within
same industry use to adopt the unfair means of business such as black marketing, hoarding and
adulteration in order to increase profit margin by a good percentage and survive for long in
1

dynamic environment. In resent time it is very common to observed that various companies
adopt such business activities that aid to grow huge profit in short run but the miss to maintain a
decent volume of profit for long term (Bakan, 2012). This is because these companies are not
able to expand business, enlarge its customer share and attain competitive advantage in this
dynamic world and have to stop operation after a few year of start ups. In the upcoming and
present day business environment an organisation can not be efficient and effective with the only
aim of profit growth and maximisation. So these companies also set their target and develop
areas such as consumer satisfactions, welfare for employees, growth and development of
community and also reduces the possibility to harm environmental condition of a place.
There are some sources that reviled many business entrepreneur thought that profit it the
main and necessary objective for an organisation. Such as oxygen is the main source of living for
human body as an individual could not survive without it. Thus the main true of a profit for an
entity whether incorporated as non profit and profit under the law. According to Drucker, profit
supplies an organisation with the support and required elements by providing support for two
basic functions such as innovation and marketing (Drucker, 2012). Only a business concern act
could make a client and that is directly related with innovation, advertisement, strategy,
salesmanship, after sales service and these actions expenditure money which come from the
deviation between buying low and selling high. There must be only one and valid purpose of an
entity that is to expand customer base and provide best services that makes them feel special and
satisfied so that they can grow and enlarge business in future time. So it is stated that if a
business firm is to be attain success and remain successful in it entire life than manager have to
consider that profit is significant to aid and benefit marketing and innovation actions, but at the
same time profit maximisation is not only the main motive and purpose of companies this is
because it can be harmful for society and may also impact the growth in long future run. Thus a
business that is mainly motivated for growing more and more money may grow some time in
long run but not be able to attain good market share and respect in the society. So it is the main
responsibilities of the management of an organisation to give equal importance on other
objective like provide best customer services (George and Wilding, 2013).
In business world companies that deliver best and effective customer services and other
after sales services are able to satisfy customer and also grow and maintain huge revenue. Thus
is is stated that keeping consumer happy and satisfy support to increase brand value, grow
2

customer base, promote good in market and generate profit for future growth. Companies such as
Amazon, Filpkart provide various after sales services like return of product in any case of
damage and dislike of product, easy refund process, asking for feedback for future modification
in existing product. This makes customer feel satisfied as they are free to choice any product and
helps company to maximise profit and expand business at global level. Profit maximisation
should not be treated as the only and sole objective but company must also focus to improve and
maintain good and effective Goodwill. Large and small business firm strive to maintain good
brand image and build strong goodwill in the existing market. So these organisation desire the
masses to view as favourable in long run and develop services and activities that can be
beneficial for both society in which they operate and grow profit in short and long run. Therefore
it is observed that to attain with this purpose an organisation need to comply with beliefs, moral,
legal and ethical standards (Lawton, 2017). The Worldwide regulation for various companies
must intensify that the relation to the society and environment in which enterprise function "an
important factor in their cognition to proceed and direct various business activities effectively. It
is also progressively being utilized as a measurement of their overall performance within a year
and support to make suitable changes for future growth and development.
The business also operate for some other objective like employees satisfaction, this
emphasis that various policies and rules must be made for team member working. As staff
member are satisfied with companies internal process they give their entire support and put more
and suitable efforts for the achievement of desired objective and expand business at fast pace. In
an organisation employee are consider to be pillar of development and growth so it is the
responsibility of management to develop effective schemes for the benefit and growth. So the
business must develop different ways to build the job interesting for employees and challenging
that force them to put entire efforts which would lead for the development of human resources.
Companies not only satisfied their employees by giving various opportunists but also bring
satisfaction by putting right candidate to the right job role and giving them fair chances of
promotion and advancement in development of careers. Thus it is observed that a satisfied
employees help in better functioning with company, give importance to allotted task completed
project on time helps to make product and services as per the demands that directly support
business entity to serve with the best to their customer and maximise profit. Companies either
medium size or big also work with the motive to meet the financial goal in an accounting year.
3

It is observed that when an organisation expand its business and grow in size the main
objective also modify from just growing profit to increase its market share and produce more
sales for produced goods (Mackey and Sisodia, 2014). On the other side when an organisation is
completely new in industry and have huge competition in market then they have to sell their
product at lower cost or sometime on break even point just to survive and manage good position
in market. Similarly, in case if companies faces reducing profit then management must try to cut
the expenses or increase the income to regain the profit margin in order to maintain and meet the
desired financial objective. Therefore it is stated that an organisation have to take decision to
develop the process and activities in order to fulfil the desired demands of customer. To
maximise profit companies can be harsh and develop strategy that only benefits them thus not
able to survive for long in competitive world. It is responsibility of manager to adopt and apply
the strategy of product differentiation that provides customer with a unique way to choose
product as per their demands and feel satisfied. Various companies also applies the concept of
cost effectiveness that is providing a cheaper goods and services to consumer or more value for
their money. These overall basic aim support an organisation and guide the strategic objective
that actually set by the management of companies.
It has been also observed that many business firm are entitled to meet different social
responsibilities that also help grow business bring faith among customer. For example, assorted
community wants companies to serve them with best quality of goods and services and at a
decent prices. Similarly the customer actually wants business firm to consider animal rights,
human rights and the overall impact of production of various goods and services on environment.
Different large organisation such as Unilever response to corporate social responsibility by fixing
various programs in disaster prone areas within world and deliver product to customer at a
decent price just for the main motive to fulfil the customer requirement not to earn huge or any
profit at that specific time period. The one of most important of an business firm rather than
profit maximisation is to meet the actual expectation of stakeholders. They must give equal
importance and consider the basic and main objective of their stakeholders that includes
customer, employees, supplier, government and investors (Shackle, 2017). It is observed that
employees work with the main objective to earn more salary and acquire new, effective skills
thus companies must fulfil these requirement by allotting work as per the knowledge. On the
other side customer actually requires product with best quality at a reasonable prices, desire of
4

government is to receive taxes form companies at regular time interval, supplier desired to
prompt payments and the demand of public is to produces less pollution so that environment
must be pleasant for future sustainable and growth (Wilson and Post, 2013).
Thus form the overall objective it has been classified that an organisation not only
established for the motive of more and more profit but there are other equal aim that support in
future growth and development.
CONCLUSIONS
From the above report it has been concluded that companies do not have the only
objective of profit maximisation but it gives equivalent to importance on customer satisfaction,
community development, satisfy the demands of stakeholders.
5

REFERENCES
Books and journals:
Bakan, J., 2012. The corporation: The pathological pursuit of profit and power. Hachette UK.
Drucker, P., 2012. Managing the non-profit organization. Routledge.
George, V. and Wilding, P., 2013. Ideology and social welfare. Routledge.
Lawton, T. C., 2017. Cleared for take-off: Structure and strategy in the low fare airline business.
Routledge.
Mackey, J. and Sisodia, R., 2014. Conscious capitalism, with a new preface by the authors:
Liberating the heroic spirit of business. Harvard Business Review Press.
Shackle, G. L. S., 2017. Expectation, enterprise and profit: The theory of the firm. Routledge.
Wilson, F. and Post, J. E., 2013. Business models for people, planet (& profits): exploring the
phenomena of social business, a market-based approach to social value creation. Small
Business Economics. 40(3). pp.715-737.
Online
Peter. F. Drucker. 2019. [Online] Available Through:
<https://www.hrexchangenetwork.com/hr-talent-management/columns/the-purpose-of-business-
is-not-to-make-a-profit>.
6

7