Quote:
Originally Posted by alpha1 Actually I don't really agree with this.
A company is a profit making concern. REGULATED by laws.
Which means the company is free to do whatever it can in order to increase the profits and improve the returns on whatever money invested, subject to limits prescribed by the Govt laws.
Responsible behavior, ethics are all subjective terms in business, used merely for lip service.
Yes this is sad, but then so is everything else in our confused sometimes competitive - sometimes regulated lives (stipulated by institutions like law & order, religion, society etc).
As an example: what operating profit margin levels do you feel is ethical for a business? If there are means of earning more profit than this ethical limit, should the business pursue it? How would one judge which means are ethical and which are not? Should the seller disclose his costs so that the buyer knows and agrees upon a mutually acceptable profit levels for the seller because he values the product/solution/service of the seller? |
My thoughts are like RDD. That is a very limited view on how to run a business. Many companies the world over, do take a much broader view and many will also be very clear about how things like corporate and social responsibility actually helps them in improving their financials, customer satisfaction, employee retention, etc. etc.
I'm at liberal at heart, so I prefer as few laws and regulations as possible. I prefer to rely on free markter principles. Corporates have a profound effect on what happens in society today. Those that ultemately do well long term, you will find, do of course watch their bottom line, but are able to formulate their own values in terms on how they deal with their customers, their employees and other stakeholders along different lines than only monetary. It is not just buzz words, I work for a very large International Corporation and we take these our corporate responsibility very seriously indeed. Because we believe it benefits our company, customers and employees and we believe its' the proper thing to do.
So, its not a question of margin or social/corporate responsibility it's a question of margin and social/corporate respsonbillity.
On profits; on the whole, in a free market I don't think it can ever be an ethical issues how much margin somebody makes. As long as there is real choice, competition will level the playing field and the prices. Only when there is a lack of competition there might be a need to look at price and margin. That is exactly what happens in the EU and the States for instance.
Isolated, whether somebody makes 1% profit or 1.000.000% profit is of no concern to me. How they go about it, might be of concern to me or at least relevant whether I buy their product or service. Which brings me back to my first point, there needs to be choice.
I work for a large international company; Each and every one of our employees signs a "code of conduct". It is set of very pragmatic valeus and behaviours that we demand of every employee anywhere in the world. From the CEO down to each and every individual on our payrolls.
It defines how we conduct our business, how we deal with one another, with our customers and our vendors and other stakeholders. Everybody is held accountable and your individual behaviour is rated against this set of values as part of your performance discussions during the year. We look at what results employee achieved and how they went about it. So it is very concrete, very measurable and very real. And if you don't abide by it, there is no room for you in our company, anywhere in the world.
And yes, our profits are fine, although we would like it to be more. We believe that our code of conduct will actually help us achieve to do so.
We are certainly not unique, many companies big and small have something similar in place, formal or informal.
Now coming back more on topic: This particular issue is, according to me, more about branding. Where does a brand stand for. Do they need to be pushed by laws or do they have their own sets of values, standards and norms that they adhere to, in addition to whatever the formal legal framework is.
I can't comment on VW in India because I just don't have any insights or hands on experience, but VW has recalled cars before, even though there might not be a "legal" reason for it. They just do it, because they believe its beneficial and the proper thing to do for VW and they want to be known for it.
What I have seen in India is that some of the European brands seems to be struggling to get this sort of attitude in place here in India. Some have suggested in other threads that they don't want to at all. There was a remarkable thread on German car manufactures that just got closed.
Although I don't have any facts to support one point of view over the other, I like to think that the way they conduct their business, what their brands stand for is pretty universal, so the Indian way should ultemately match what they are doing and are know for (or rather wish to be known for) in other markets.
Jeroen