BUSINESS: Ethics and profits are compatible

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WhartonAnother interesting article of the Knowledge@Wharton about the role of corporation in our society. The article is based on some inputs from a documentary film called The Corporation and the corresponding book – The Corporation: The Pathological Pursuit of Profit and Power.

Both are an attempt to create a new definition of goals and responsibilities for the business world consistent with the realities of the 21st century. The key to this reappraisal is the concept of a "sustainable economy.

I don’t know the book and the movie, I found interesting that the authors point out that:

  • As a reminder for all of us, Corporate leaders are legally bound to make profits, not to act ethically.

  • We need a shift in the corporate paradigm from a 19th century emphasis on maximizing profits to a 21st century ideal of sustaining long-term growth.

  • It already exists companies which are acting in this way. One example is quoted in the article – Interface, Inc, the world largest carpet maker (!):

    • Acting to make Interface an entirely self-sustaining and ecologically responsible firm by 2020, [its founder and Chairman, Ray Anderson,] has guided his company to a record of remarkable achievement. In the July 19, 2004, issue of BusinessWeek, data supplied by Interface show that waste produced by the company has been reduced by 80%, water intake is down by 78%, emissions of greenhouse gases down by 46%, energy consumption cut by 31% and use of petroleum-based materials by 28%. The final figure is in some ways the most persuasive, detailing a total savings of $231 million. Ethics and profits are indeed compatible.

    Great concrete example!

    Source: A Critical Look at the Corporation’s Dominant Role in Society

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