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09/08/2019

Should firms be ethical? If so will they be more successful?

QUESTION
Should firms be ethical? If so will they be more successful?
What ethical theories can i link this essay question to? And is it possible to give a definite answer to this question because different firms have different corporate culture, it might not always be about the profit.

ANSWER
In simple terms:

Yes businesses could and should be more ethical. Many of the larger corporates do now have a code of ethics although, in my experience these are more of an *rse-covering exercise and an attempt to look “concerned” and “environmentally aware”, than a real attempt to change the attitudes within the company.

It is impossible to answer the “will they be more successful?” question as it depends on what business they are in.

Anita Roddick with “Bodyshop” made a positive virtue of her ethical attitude and this enhanced the marketing because it fitted the product. The companies I have worked for are largely engineering biassed with a slant towards the Defence sector – clearly an ethical attitude is not going to win any extra business in this arena.

In some instances, a code of ethics can have a negative financial effect. It costs money to run these types of scheme and, once you have a code, you have to ensure everyone knows about it, and that it is constantly monitored and updated. So there is a cost attached which may not be recovered by an increase in sales revenue. As regards the employees – they don’t give a rats, unless they see some positive benefits for them and, that, as I suggested in the first paragraph, is highly unlikely.