Business Profitability and Sustainability

1

Introduction and Literature Review

Don't use plagiarized sources. Get Your Custom Essay on
Business Profitability and Sustainability
Just from $13/Page
Order Essay

Angel Keyes

Columbia Southern University 2

Business Profitability and Sustainability

Introduction

The profitability and sustainability of a business are both desirable qualities that each and

every business desire to attain. Profitability can enable a business to achieve a return on investment

as a measure of the efficiency of the business based on the resources that are at the disposal of the

business when compared to the alternative investments. However, this could lead to a strain and

depletion of the available resources. A company that has attained higher levels of profitability and

sustainability can help a business secure financing from financial institutions such as banks. For

example, a company that has higher profitability and sustainability levels have a better credit score

which can help them to borrow higher loan amounts that the businesses can use to further develop

and advance their operations. Higher profitability and sustainability levels have also motivated

investors and employees which has increased the investments and costs incurred in the hiring

process when employees leave to work with the competitor firms. The controversy that emerges is

that business profitability and sustainability is important for business because it increases revenues,

improves the credit score that determines the ability of the business to acquire loans and funding

for future expansion, and the number of investors although it comes at a cost as resources may be

depleted in the process. The advantage of business profitability and sustainability is that it can help

businesses improve employee retention by building helping the employees build their reputation,

providing them with an opportunity for career growth, provide training that increases job security,

improve a firm’s liquidity state, and could reduce stress levels among the employees. On the

contrary, business profitability and sustainability require advances in technology which may

exploit and deplete environmental resources as well as leading to higher stress levels among the 3

employees. The objective of this argumentative essay will be to address the advantages and

limitations of business profitability and sustainability in the business environment.

Literature Review

There are several articles written and published about the critical role that business

profitability and sustainability. According to Beato (2017), business profitability and sustainability

could help to improve employee retention. The ability of a company to hire and retain highly

innovative and competitive employees depends on the ability of the company to remain

competitive in the industry. This way, companies that are highly profitable and sustainable are able

to not only attract a talented pool of employees but also retain them. No one employee would be

willing to work for a company that has poor profitability, but is also unsustainable. The author of

this article confirms that one of the benefits of a business is being profitable and sustainable.

Business profitability and sustainability could also enhance career growth and

development. According to Dang et al. (2019), organizations that are profitable and sustainable

provide opportunities for the employees to grow and develop themselves at both personal and

professional levels. Research shows that organizations that are highly profitable sustainable

understand the importance of investing in the employees (Dang et al., 2019). As such, the

organizations may invest in employee development programs through workshops, seminars, and

even morning briefs to motivate the employees. These programs and strategies are important

because they allow the employees to learn new skills and knowledge about various issues. The

result is that the employees are able to achieve career growth and development that could further

contribute towards achieving better employee retention and attracting more talented and skilled

employees. 4

Furthermore, research shows that business profitability and sustainability could help

businesses to enhance job security for the employees. According to Mounteer (2019), business

profitability and sustainability provide training and improving job security. Training equips the

employees with the right skills and competencies to address the various issues that the employees

may encounter at their place of work. This way, employees do not have to worry about getting

stressed that they will be fired because of their lack of competence and skills to perform effectively

at their place of work. Past literature thus shows that employees are able to improve skill level and

competence as a result of business profitability and sustainability ( Mounteer, 2019). The

employees can improve their efficiency and productivity at work. As a result, the employees will

feel assured that their job position is secured, and thus increase job security. It will also minimize

distraction in the place of work because companies that are profitable and sustainable have the

right resources that the employees may need. The employees do not have to struggle from one

place to the other looking for the right resources that the employees may need.

A business that has training and mentorship programs in place for the employees can help

to improve the reputation of the employees. Through training, the employees will be able to learn

the significance of some of the skills such as diversity, teamwork, and continuous education for

career growth and to develop themselves both personally and professionally. This reduces the

possibility of employees being scared and fearful that they may lose their job position to more

competent individuals. They are equipped with the right skills and are up-to-date with the latest

trends in the market. The employees will be very competent to improve their efficiency and

productivity in the place of work.

Most importantly, business profitability and sustainability can help a business enhance its

liquidity of the business. According to Jasmani (2019), the liquidity of the firm can improve 5

drastically when the firm is profitable and sustainable. Businesses that are profitable and

sustainable have adequate assets to efficiently cover their immediate as well as short-term

expenses. By having sufficient assets, the business can have better collateral and thus the ability to

gain higher loans to expand the operations of the business. This way, businesses that have higher

profitability and sustainability will have better liquidity and can thus secure better loans under

better interest rates.

However, past literature also shows that the process of achieving business profitability and

sustainability could deplete the resources. The process of business profitability and sustainability

possess a challenge to the sustainability of the resources (Benitez et al, 2017). As businesses strive

to achieve profitability and sustainability, they may require to implement advanced technologies to

compete with other industry giants. This may lead to the exploitation of resources, which may pose

a risk to non-renewable resources. Further research proves that the efforts towards achieving

profitability and sustainability could negatively impact the environment ( Srivastava et al., 2017 ).

For example, there is electricity in use, industrial processes, transportation of the products, and

burning of fossil fuels which could all emit pollutants into the environment. This way, the struggle

to attain profitability and sustainability impacts the environment and may deplete resources.

Finally, the need to achieve profitability and sustainability may impact the health of the

employees. The industrial processes and activities that companies may go through to achieve

business profitability and sustainability may lead to employees being overworked and stressed out.

Working hard on a daily basis to achieve profitability may lead to employee burnout. This could

reduce the efficiency and productivity of the employees. 6 7

References

Beato, A. (2017). Effective strategies employed by retail store leaders to reduce employee turnover

(Doctoral dissertation, Walden University).

Benitez, J., Chen, Y., Teo, T. S., & Ajamieh, A. (2018). Evolution of the impact of e-business

technology on operational competence and firm profitability: A panel data investigation.

Information & Management , 55 (1), 120-130.

Dang, H. N., Vu, V. T. T., Ngo, X. T., & Hoang, H. T. V. (2019). Study the impact of growth, firm

size, capital structure, and profitability on enterprise value: Evidence of enterprises in

Vietnam. Journal of Corporate Accounting & Finance , 30 (1), 144-160.

Jasmani, J. (2019). The Effect of Liquidity and Working Capital Turnover on Profitability at PT.

Sumber Cipta Multiniaga, South Jakarta. PINISI Discretion Review , 3 (1), 29-38.

Mounteer, S. M. (2019). Increasing Profitability in Healthcare Organizations through Employee

Satisfaction Approaches. Journal of Online Higher Education vol , 3 (2).

Ramos, P. C. (2019). Employee retention strategies for executive operation leaders in an academic

nursing environment (Doctoral dissertation, Walden University).

Srivastava, A., Singh, S. K., Tanwar, S., & Tyagi, S. (2017, September). Suitability of big data

analytics in the Indian banking sector to increase revenue and profitability. In 2017 3rd

international conference on advances in computing, communication & automation

(ICACCA)(Fall) (pp. 1-6). IEEE.

Calculator

Calculate the price of your paper

Total price:$26
Our features

We've got everything to become your favourite writing service

Need a better grade?
We've got you covered.

Order your paper