University of Makeni Sustainable Enterprise – 2 Leadership and environmental ethics Ethical leadership

Traditional profit-based business models

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Traditional profit-based business models, which arose and came to dominate global commerce from the beginnings of industrialisation, inherently do not require a socially responsible element, other than compliance with the law, and a reflection of public reaction for pragmatic marketing (and ultimately profit) purposes.

Ethical business or investment is concerned with how profit is made and how much profit is made, whereas traditional profit-centred free-market based business is essentially only concerned with how much profit is made.

Traditional profit-centred business seeks to maximise profit and return on investment with no particular regard for how the profits are made and what the social effects of the business activities are.

The ethical approach to business and investment seeks to maximise profit and return on investment while minimising and avoiding where possible negative social effects.

In this context 'social' and 'socially responsible' include related factors such as:

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