The main existence of companies is to generate money for the shareholders and the owner. Their primary goal which is also their driving force is generating more profits. Some companies may choose short-term profits over long-term success while others may opt to concentrate on the long-term success. Either way, I feel that good ethical behavior in a company can facilitate the improvement of the financial performance of the company. According to the Ethical Investment Research Service (EIRIS) report (Havemann & Webster, 1999), ethics-related news positively or negatively affect the share price of a company for up to 3% of the share price. Businesses that have strong ethical identity are likely to highly satisfy the stakeholders, positively influencing the company in regard to financial results. On the contrary, without personal and professional ethics, a company’s financial results can be negatively affected (Havemann & Webster, 1999). The stakeholders are likely to limit their investments if they have little or no confidence in the management of a company hence adversely affect the growth of the business.
Sometimes the management of a company can act ethically by making a business decision that serves a public interest but in the long run increases the profitability of the company. For instance, a company can increase its long-term profits through green environmental practices. A company can decide to remodel its production plant making it safer in regards to environmental pollution. It may further decide to clean the already polluted environment such as water sources. With time, people will become aware of the positive impact of the company on the environment and more investors will want to engage in business and be associated with a company of good values. In the long-run, the company will see an increase in funding from various investors which will boost its grow...
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