The Significance of Business Ethics

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A business’ ethical behavior reflects its culture, a mutual set of morals and guiding ideologies deeply rooted throughout the firm (Ranjit, 2015). Business ethics is significant in creating a firm’s image that greatly influences the company itself and the surrounding society. While many companies have synonymized ethical behavior through just following the rules, others are determined to function morally and initiate codes of conducts for workers to abide.

Acting morally does not guarantee a profitable result while immoral business act does not imply the company will be penalized. But, in the contemporary world, firms are being managed wisely, and moral business acts are anticipated from the society. Besides, acting morally impacts the business positively as the business accrues benefits than firms that function unethically. In this essay, we shall discuss the importance of ethics in business and the types of business ethics.

Luus (2015) strongly argues that in a business working environment, business ethics evaluate, direct the choice, and behavior of a company’s operations. Principles of business ethics are used in examining the firm’s actions to critic if a certain act is morally justified or not and proscribes immoral activities. There are a few individuals who feel that since personal morals are in existence, a company should not have ethics as it is not a person. However, business ethics differs from personal ethics because firms comprise of more than one individual. Whether it is a large scale or small-scale business, it is a set of individuals joining hands to run it. A company’s triumph or failure affects all the people involved and the surrounding society (Luus, 2015). Moral standards frame the firm’s culture, impacts the employee’s morale, creates a good depiction of the society, strengthens customers’ trust, and attracts more potential clients. It goes without question that trust is what directs firms in choosing their partners, and maintaining the loyalty of the customers. Additionally, people tend to be more willing to trust a business well known for its moral culture.


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Salehi, Saeidinia, & Aghaei affirm that ethical companies will certainly have many benefits compared to their opponents (2012). Firms that fail to abide by the ethical standards may encounter the ruling of the law or public criticism. According to the law, an act is not classified as crime till proven guilty, but the image of a company may be tainted negatively in the public even before judgment is given by a court of law. Defilement of business morals exists in various forms: corruption, deliberate utilization of dangerous substances, environmental pollution, disparity, and desecration of promises.

When an enterprise defiles the law, it also defiles the business moral standards (Salehi, Saeidinia, & Aghaei, 2012). The prevalent legal cases against large enterprises are corruption, environmental pollution, disparity and unsafe working environment. Unlawful activities are fined, and businesses incur losses through these fines. The challenge with this type of punishment is that the fines imposed on the businesses are small relative to the profits they make. Consequently, many firms fined severally continue running their activities in the same conditions that landed them into problems. For instance, the Computershare Australian Stock Firm was penalized $322,500 in 2015 because of numerous breaches of regulation (Salehi, Saeidinia, & Aghaei, 2012). The company broke the law knowing that they endangered their customers’ assets. Going by the firm’s yearly report, their profits did not experience a high drift. By June 2013 they recorded a total profit of 2,019 million dollars, by June 2014, they had 2,015 million dollars, and in 2015, even after being penalized, their total profits stood at 1971 million dollars (Salehi, Saeidinia, & Aghaei, 2012). Although it declined, the decline is negligible.

Unethical business conduct does not imply it is unlawful. For example, McDonald’s firm in America is well known for its disreputable meanness towards its workers. The workforce who toil for long hours in this big food merchandise is poorly paid to the extent that they cannot afford to sustain their families. But the company’s activity is undeniably legal.

Good moral practices by firms are essential in the achievement of organizational goals. A company that holds ethical acts of carrying out its affairs is more likely to attain workers’ commitment, allegiance and gratification that in turn lead to high quality and increased performance. Such companies will also depict good organizational values to shareholders and stakeholders.

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