Importance of observing good business ethics

By Priya Chetty on February 7, 2012

Business ethics is a value system with the capability to provide an organizations with the guideline within which the management can operate (Fernando, 2009). Business ethics are performed through practices such as performing routine work and are not mere objects (Carter, 2007). Ethical practices in business is important for all the organizations. It is a vital component of an effective business strategy.

Good business ethics

A strong stress on ensuring good practices of business ethics will result in positive inference for the firm. Some of which may be summed up as below.

  • While adopting ethical practices an organization ensures that it takes steps which are presumed correct by their customers, stakeholders, community as well as the society. Consequently, the strategic decision making within the organization creates a positive images for the organization.
  • Nowadays more emphasis is being laid on developing the quality of core management in an organization. This is because it is their responsibility to manage, foresee, adapt, make decision, empower and cope with the changes in the environment. Also, top management executives face the dilemma of doing what is ethically right or what is required to achieve the desired objectives. However, the organizations that implement good business ethics, they experience effectiveness in their strategic leadership.
  • It has been found out by many successful top management executives that exercising ethical practices in their business strategy enhances the clarity of the purpose and results in efficient business process (Ashoor and Mubarak, 2009). That is why for long term survival, inclusion of good business ethics in decision making is a mandate.
  • Implementation of ethical practices not only portrays a positive image of an organization, but it also provides numerous benefits for the organization’s internal environment.  With positive reputation employees will believe in their CEOs’ good decisions and have faith in their organization, which will lead to employee loyalty.
  • Further, loyal customer base will also be developed for the organization as customers will trust the organization and its products. This would further provide the organization with an edge over the competitors.

Thus, observing good business ethics, then can have myriad advantages which are likely to be seen in reputed market position and sustained success through satisfied and loyal customers.


  • Fernando, A., 2009. Business Ethics: An Indian Perspective: Pearson Education India.
  • Carter, C., 2007. Business ethics as practice: representation, reflexivity and performance : Edward Elgar Publishing
  • Ashoor, Z., and Mubarak, B., Applying ethical practices to effectively lead the organization to the aimed success, 2009