Make Money or Serve Society

"If the primary duty and concern of a corporation is to make money, then conflict is inevitable when the corporation must also acknowledge a duty to serve society."

From your perspective, how accurate is the above statement? Support your position with reasons and/or examples from your own experience, observations, or reading.

From my perspective, the above statement is inaccurate. 

The statement seems to imply that any industry that acknowledges a duty to serve the society will do so at the cost of getting detracted from its primary duty of making money. 

The case of Muhammad Yunnus of Bangladesh, who won a nobel prize for his micro-finance business, illustrates how wrong this assumption is. His business lent small amount of money at a nominal interest rate to small-scale social entrepreneurs in villages. These were generally women who would employ other women in a village based small scale industry like making baskets, knitting etc. Not only the business was profitable, it created prosperity at the bottom of the social ladder. The desire to serve the society did not conflict with profitability.

What is true for social entreprenuers like Yunnus, is true for other industries as well. Anybody who has a doubts just needs to see that Bill Gates's Microsoft, Narayan Murthy's Infosys and Richard Branson's Virgin Group are involved in a lot a charitable activities. Acknowledging a duty to serve the society has not led to any conflict in case of these very successful companies. Hence, any claim to the contrary is not credible.

The desire to serve the society and the desire to make money are not necessarily at odds with each other. If it was not so, a lot of successful companies and social entrepreneurs would not have made any money what-so-ever. The very fact that these entities are profitable in spite of serving the society clearly exposes the inaccuracy of the statement. 

Need For Stronger Control and Ethics

The following is an excerpt from a memo written by the head of a governmental department:

"Neither stronger ethics regulations nor stronger enforcement mechanisms are necessary to ensure ethical behavior by companies doing business with this department. We already have a code of ethics that companies doing business with this department are urged to abide by, and virtually all of these companies have agreed to follow it. We also know that the code is relevant to the current business environment because it was approved within the last year, and in direct response to specific violations committed by companies with which we were then working-not in abstract anticipation of potential violations, as so many such codes are."

Discuss how well reasoned . . . etc.

The above reasoning not only lacks data, it is also seriously flawed at a few counts.

The first part of the argument is built around the presence of an existing code of ethics and the agreement of all relevant companies to follow it. This, however, does not tell us if the companies have actually followed the code of ethics. Action, and not words, alone can warrant concessions. It does not matter what the companies say. What matters is what they have done. If the companies have not followed the code of ethics, making enforcement mechanisms stronger would be the logical recourse. 

Then the writer talks about the code being approved within the last year. The relevance of the code, however, is determined by when the code was made and not when it was passed. Without that information we cannot say for sure if new and stronger ethics regulations are needed or not.

The writer further mentions that the code was formulated in direct response of violations committed by companies with which the department is working. Since the companies have committed enough violations, there is absolutely no case for arguing for not bringing in stronger enforcement mechanisms. The violations show lack of fear due to absence of a deterrent. Mere word of companies that have blatantly violated the code of ethics cannot be trusted. 

Concluding, at best the writer can argue about not bringing in stronger ethics regulations if it is established that the current code was made pretty recently. On the other hand, as far as enforcement mechanisms are concerned, the writer does not have a case - by his own admission the companies have committed violations in the past.