Whether a company should produce any product for which there is a demand can be seen as equally relevant to organizational management and business ethics. To discuss this statement, one would need to consider the two essential sides of the conversation: feasibility & efficiency and social responsibility. Consecutively, this paper aims to analyze both the profitability-concerned and the morality-concerned sides of the titular question before achieving a conclusion.
From the profitability point of view, the existence of demand does not always justify the production process initiation. Production establishment is a costly process, requiring a massive amount of investment from the company. Even at the very first stage, before the company can adequately analyze whether it is successful in attracting consumers, it needs to fund the market research and product development costs. Marketing expenditure, start-up navigation, and general uncertainty of the first few phases of the product life cycle are challenging and demanding for every firm.
Furthermore, regardless of the demand for a product, market conditions might be unwelcoming to newcomers in a particular industry. Certain businesses possess higher financial barriers to entry than others, which is always a factor in making production-related decisions. Substantial equipment costs and established price ceilings that a start-up would have a hard time competing against must be considered by the firm’s executives (Asl-Najafi & Yaghoubi, 2021). The fast-food industry can be used as an illustrative example of the counterarguments outlined above. Despite the consistently high demand, establishing a new brand in this market would be a complicated process due to its oversaturation and oligopolistic structure.
Certain industries are inherently competitive, and any new entrant would need to attract consumers who have already been using the existing services. Although the prompt specifies the existence of the demand as a requirement, it does not provide a detailed explanation of which levels of demand and market saturation are acceptable. Therefore, a company should not produce anything there is a demand for in the market without considering its resources and risks.
Additionally, the ethical and moral sides of business production, and the firm’s corporate social responsibility might be at stake if one was to agree with the titular claim. Namely, the market demand and potential to monetize the goods exist within a wide variety of restricted or illegal objects (He & Harris, 2020). Such activities as drug trafficking and illegal alcohol turnover illustrate the existence of demand for goods that, for one reason or another, were not legally purchased by the consumer. As Proverbs state, âwine is a mockerâ (James, 2013, 20:1), and a case can be made against its production in general. From this point of view, companies are not encouraged to participate in any illegal activities, even if there is, hypothetically, a market for them. Not only would this kind of production contradict the law, but it goes against the principles of corporate social responsibility, that were adopted by firms worldwide for the general benefit.
Yet on another level, as specified by one of the other students in the course, Christian businesses have an additional level of responsibility in the matter. They glorify god through engaging in creative, inspired, and meaningful commercial practices. Despite the inherent importance of profitability in business management, Christian business owners base their approach on the principles outlined in the Bible. Wine within the biblical canon is repeatedly referred to as ungodly, and hence no Christian business should ever produce it.
In conclusion, the titular claim is thereby denied, since the mere existence of demand is insufficient for a company to make decisions regarding the production of a new set of goods. Other factors must be taken into account both from the managerial and ethical standpoint. Market demand is arguably one of the most important factors that stakeholders consider when initiating a new production activity. But as businesses exist as a part of the commercial and social environment, many other variables must be carefully analyzed before making such a decision.
References
Asl-Najafi, J., & Yaghoubi, S. (2021). A novel perspective on closed-loop supply chain coordination: Product life-cycle approach. Journal Of Cleaner Production, 289, 125697. Web.
James, K. (2013). Book of Proverbs, CreateSpace Independent Publishing Platform, 20:1
He, H., & Harris, L. (2020). The impact of Covid-19 pandemic on corporate social responsibility and marketing philosophy. Journal Of Business Research, 116, 176-182. Web.