How the tension between “good” and “bad” profits can wreak havoc with a company's reputation

The purpose of this paper is to show that many companies are degrading their corporate reputations because they are making (“bad”) profits at the expense of customer satisfaction.

The practices of Australia's Big 4 commercial banks are used to describe the practice of making “good” and “bad” profits.

“Good” profits are made by creating value for customers and dealing fairly with other stakeholders. “Bad” profits annoy or exploit customers and other stakeholders.

When “bad” profits are a significant part of a company's overall profitability, then corporate reputation and trust amongst stakeholders degrades.

This paper helps managers understand the reputation implications of making “bad” profits.