Today’s high-intensity business environment makes it more imperative than ever to incorporate ethics into the business strategy. The complex environment of organizations is challenging the way in which organizations respond to social pressures. In light of this, society has developed rules to guide businesses in their effort to comply with society expectations of what is right or wrong. Studies suggest that organizations must balance their aspirations to make profits along with the high ethical standards required by the social order. As more firms recognize the benefits of cultivating business ethics, a firm’s social responsibility, compliant culture, and moral decision-making can positively affect organizational outcomes and financial performance.
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“If one unethical lapse isn’t discovered immediately, this may lead to a distinct bias in risk analysis management” (Atlas, 2013, p. 53). In other words, without exception, all organizations are vulnerable to unethical conduct. Even those organizations that have a strong code of ethics may be a target from wrongdoing and misbehavior. When unlawful activities or abusive behavior are not detected, the firm may experience a deteriorating impact in their organizational ability to comply with their stakeholders’ responsibilities. In fact, firms that fail to comply with legal actions or are found guilty of unethical practices are sanctioned by mandatory law. Punitive sanctions may be in the form of fines and lawsuits. As a result, the public loses confidence in the organization, and the business’ reputation is critically damaged. Some researchers conclude that building an honorable reputation may take years, yet put an end to it only a few …show more content…
Opportunities stem from an organizations or society’s ability to enact punitive measures for immoral behavior or offer rewards for ethical practices. A business that makes moral decisions and participates in cooperative social responsibilities stands to gain a great deal. First, consumers only purchase from companies that treat them fairly. Consequently, practices such as overcharging or producing inferior product quality discourages repeat customers. Undoubtedly, a loyal customer base is one of the critical factors for successful businesses. A company with a reputation for ethical behavior can leverage competition since the existing clients attract new customers by word of mouth. Secondly, a company that makes moral decisions has a higher chance of retaining its competent employees as compared to unethical organizations. All employees, regardless of their position, desire to be compensated fairly for their efforts and competence. They desire to be part of a firm that promotes individuals based on personal merit rather than favoritism. Further, companies that are open and fair in their dealings with its staff are more likely to retain competent
“If one unethical lapse isn’t discovered immediately, this may lead to a distinct bias in risk analysis management” (Atlas, 2013, p. 53). In other words, without exception, all organizations are vulnerable to unethical conduct. Even those organizations that have a strong code of ethics may be a target from wrongdoing and misbehavior. When unlawful activities or abusive behavior are not detected, the firm may experience a deteriorating impact in their organizational ability to comply with their stakeholders’ responsibilities. In fact, firms that fail to comply with legal actions or are found guilty of unethical practices are sanctioned by mandatory law. Punitive sanctions may be in the form of fines and lawsuits. As a result, the public loses confidence in the organization, and the business’ reputation is critically damaged. Some researchers conclude that building an honorable reputation may take years, yet put an end to it only a few …show more content…
Opportunities stem from an organizations or society’s ability to enact punitive measures for immoral behavior or offer rewards for ethical practices. A business that makes moral decisions and participates in cooperative social responsibilities stands to gain a great deal. First, consumers only purchase from companies that treat them fairly. Consequently, practices such as overcharging or producing inferior product quality discourages repeat customers. Undoubtedly, a loyal customer base is one of the critical factors for successful businesses. A company with a reputation for ethical behavior can leverage competition since the existing clients attract new customers by word of mouth. Secondly, a company that makes moral decisions has a higher chance of retaining its competent employees as compared to unethical organizations. All employees, regardless of their position, desire to be compensated fairly for their efforts and competence. They desire to be part of a firm that promotes individuals based on personal merit rather than favoritism. Further, companies that are open and fair in their dealings with its staff are more likely to retain competent