What Causes a Need for Business Ethics?

Esther Ejim
Esther Ejim
Businesswoman talking on a mobile phone
Businesswoman talking on a mobile phone

The main reason for the application of business ethics in various business transactions stems from the fact that a business world without any ethical considerations would be a chaotic one where anything would go. As such, the need for business ethics is related to the order, consideration and integrity that ethics infuses into the business world. Bearing in mind the fact that while some ethical considerations may be considered universal because they are derived from basic morality, the real meaning of ethics in business is not something that can be referred to as an established set of laws. This means that the perception of ethics in business is somewhat malleable and can have different meanings for companies, especially in the global business community where different cultures and values play an important role in determining the exact business ethics that will guide the operations of the company. The reasons for the application of ethics in business could be for marketing, corporate image or other personal considerations unique to the company.

One of the reasons for the application of ethics in business is the fact that the application of good business ethics helps a company build goodwill among the members of the business community, among consumers, and also among the members of the society where the business is located. A company that develops a reputation for fair practices will have a very high standing among other business men and women who will use this ethical reputation as a yardstick for measuring its dealings with the company. This good reputation is loosely tied to the presentation of the corporate image that such a company is trying to build, something that can also be used as a part of its identity. The desire to develop its image forms a need for business ethics since it will be the foundation for developing the corporate image.

A need for business ethics can be illustrated by using the example of a company that builds its brand based on the fact that it sources its raw materials in a manner that does not harm the earth or environment. This illustration of the need for business ethics can be further explained by establishing a connection between the perception of a company among consumers and the effect that perception has on sales. A considerable percentage of consumers like to think that they are being conscious of issues relating to the preservation of the planet and may patronize such a company based on the view that it is environmentally conscious, leading to an increase in sales for the company.

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Discussion Comments


@SteamLouis-- So do you think that businesses act ethically because they have no choice? Are they playing by the rules just so that they won't lose customers and can continue to make money?


@bluedolphin-- I actually thin that business ethics is often something demanded by employees and customers. Without this demand, I think that businesses would be more likely to engage in unethical practices. This is because business has only one goal and that is to make money. Maintaining moral excellence isn't exactly the mission of businesses.

Thankfully, societies have well established and understood ethical norms. So when a business does things unethically, such as underpaying their employees or engaging in false advertising, they can't get away with it. The way a business conducts itself affects the identity and image of that business by the public. A business that is seen as unethical or unfair will lose customers.


The article author has made a great point, ethics in business is malleable.

Ethics rules in businesses as organizations are not clearly defined and can vary and change. Some people think that ethics equals laws and legal rules that businesses must abide by. Although ethics can be a basis of laws, there aren't laws that supervise every aspect of a business. So establishing ethical practices is partly up to the business and its directors.

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