‘Ethical Standards Constitute Good Business, Not Financial Metrics’
New Delhi, Nov. 18 (IANS): What is a good business? It’s certainly not traditional business metrics such as ‘Financial Performance’, ‘Market Leadership’, ‘Profitability’ or ‘Growth’ but more about having ‘Ethical Standards’, ‘Caring for the Community’, and ‘Inclusivity’.
These are the findings of the ‘Mahindra Good Business Study’, involving over 2,000 respondents across 10, Tier 1 and Tier 2 cities. The study aimed to better understand respondents’ perception of what actually makes for a ‘Good Business’ and how this shapes their expectations and decision-making as potential consumers, investors and employees.
According to the study, 62 per cent of respondents believe that ‘Good Business’ constitutes more than a financial return, 14 per cent associate the term with qualities such as environmental consideration and community commitments (CSR).
Also, more than 45 per cent of young Indians aged between 18 and 25 give priority to ethical standards, caring for the community and inclusivity, rather than just profits. Conversely, ‘transactional and ‘performance’ metrics like profitability, growth and market leadership tend to increase (48 per cent of respondents) among older respondents aged over 46.
Interestingly, 46 per cent of Tier 2 cities respondents cite ‘Care for the Community (15 per cent)’, ‘Ethical Standards (20 per cent)’ and ‘Inclusivity (nine per cent)’, as the first thing that comes to their minds when they hear the term ‘good business’; as compared to 47 per cent of Tier 1 respondents, who associate Good Business with business metrics such as ‘Financial Performance’, ‘Market Leadership’, ‘Profitability’ or ‘Growth’.
The study, commissioned as part of the Mahindra Group’s 75th anniversary celebrations, has revealed interesting insights about people’s ideas of what makes a ‘good business’ particularly during these paradigms shifting Covid times.
The study uncovered that what constitutes a ‘Good Business’ is a deeply personal view, based on individual values and life experiences. Understanding this is no longer a matter of reputation — it has now become a key business issue.
According to Anand Mahindra, Chairman, Mahindra Group, “The wider role, purpose and meaning of what constitutes ‘Good Business’ has never been more relevant than today. A company’s social and community impact is being discussed as loudly and frequently as its balance sheets; and by more people than ever before.”
“I absolutely believe that these broader, more inclusive expectations — whether from customers, shareholders, employers or other members of society — can be perfectly compatible. The principle role of business leaders today is to find that mutually beneficial, common ground — for me, that is the essence of Good Business.”
From a gender perspective, some differences also emerged in the study. Some interesting findings included — from an employment perspective, nearly half (49 per cent) of the respondents chose salary and employee benefits, career and growth potential and climate change policies and environmental commitments as the top three considerations for a ‘good’ business’.
And 35 per cent of respondents would ‘always’ reject an offer to work for a company they didn’t consider to be ‘good’.
While a similar proportion, 34 per cent, claim their top considerations are ‘good’ community related factors such as good environmental policies, inclusivity and ethics, and CSR programs, when they were choosing a new job in the future.
Additionally, 81 per cent of women would reject a job offer if they did not consider the business to be a ‘good’ one, compared to 74 per cent of their male counterparts.