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

Purpose – 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. Design/methodology/approach – The practices of Australia's Big 4 commercial banks are used to describe the practice of making “good” and “bad” profits. Findings – “Good” profits are made by creating value for customers and dealing fairly with other stakeholders. “Bad” profits annoy or exploit customers and other stakeholders. Practical implications – When “bad” profits are a significant part of a company's overall profitability, then corporate reputation and trust amongst stakeholders degrades. Originality/value – This paper helps managers understand the reputation implications of making “bad” profits.