Ethics and Profitability: Can They Coexist?

Satyendra Singh

Chapter Chapter 4 in Business Practices in Emerging and Re-Emerging Markets, 2008, pp 69-87 from Palgrave Macmillan

Abstract: Abstract This chapter examines the effects of two moral ethical philosophies—deontological and teleological—on profitability. Drawing on the source-competitive advantage-performance theory, it is argued that firms that are perceived ethical are more likely to have a positive impact on profitability than firms that do not. Based on data from Indian businesses, the results of the regression models indicate that ethical business practices lead firms to a superior profitability through acquisition of the competitive advantage. However, the results also suggest that the effects of such ethical practices on profitability are initially negative but turn positive with higher levels of ethical orientation. Implication for managers is that they can command, even in emerging markets, a premium price for their products, if their firms are perceived ethical.

Keywords: Business Ethic; Social Responsibility; Unethical Behavior; Foreign Firm; Market Orientation (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-61101-6_4

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DOI: 10.1057/9780230611016_4

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