Last Updated 17 Jun 2020

Ethical Business Conduct

Category business
Essay type Research
Words 805 (3 pages)
Views 402

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With the increase in competition in the business environment, businesses are setting their standards and policies which will ensure that they attract and retain a substantial market share. The promotion of ethical business conduct is a critical part of operating a well regarded and profitable business. This paper will look at various issues surrounding ethical business conduct, which will include advantages and disadvantages of being involved in business ethical conduct.

Ethical business conduct refers to the compliance of legal and administrative standards. It involves the adherence to the set internal rules and regulations as businesses and corporations are being held accountable for their actions. When a business pays attention to ethics, it improves the image of its brand name as it meets its obligations to customers, suppliers, creditors, shareholders and other parties that relate to the business. In every kind of business, ethical behavior is paramount as fairness, integrity, and honesty is maintained in business dealings (FMLink Group, 2008).

There are numerous advantages which accrue to a business as it conducts ethical business. It becomes easy to attract customer’s loyalty as customer increases trust on the company’s products. Transparency and reliability is enhanced in ethical business conduct. This means that customers are able to obtain quality information from the business that the customer can rely upon. The customer will feel fulfilled when he obtains quality service and is well appreciated in a business. He thus feels that the products obtained from that business are worth the cost. This practice increases repeat purchases and acts as a method of retaining and attracting customers. Ethical business conduct means that there is fairness in terms of employment. The employees will be motivated when the employer is fair unto them. Equal chances of promotion and employee growth and development are among business ethics that businesses engage in. The business has a lot to gain with the right motivated employees (FMLink Group, 2008).

It is sometimes difficult for businesses to exercise ethical business conduct. This is because of circumstances that bring about conflicting morals. According to Luftig & Ouellette (2009) a moral choice does not necessarily mean is an ethical choice and vice versa is true. If you are faced with a situation whereby a test shows you that the products do not meet a certain specification, either legal or otherwise, but your supervisor insists that you have to pass the product regardless. Conflicting goals arise and it becomes difficult for a business to maintain a business ethics in such circumstances. In some cases business ethics entails a sacrifice of a company’s goal of profit maximization as it will mean that the business has to incur an extra expenditure in order to meet a certain specification which may not have a direct value addition to the business.

In order for a company to develop an ethical business conduct, it has to develop a code of ethics which shall be known to all employees and members of the company. The management should also be involved in clarification of company’s expectations, listening and responding to various queries and respecting other people’s views on various issues. It requires being consistent in handling of organization conflicts in order to promote fairness and ensuring that the company is a free from harassment and inequality zone. In general, every person in the company should uphold the code of professional ethics, and promise to protect the well being of the entire public (FMLink Group, 2008).

Luftig & Ouellette (2009) argues that in order for a company to establish an ethical business conduct, it requires more than just putting the policy down on paper. Adherence and support in order to enforce the standard is required by those who instigate the standard and those who are required to follow this standard in their day to day endeavors. A company cannot claim that it is involved in ethical business conduct by the mere fact that such is stipulated in policy statements of the company or otherwise, but its relation and practices with other parties either internally or externally will exhibit this involvement.

In my opinion, the conduct of business ethics may be surrounded by quite some few challenges. It would mean a sacrifice of high profits in order to meet certain specifications and standards. This would nevertheless surpass the benefits which accrue to ethical businesses. They are able to have customers’ trust and confidence. They can easily penetrate new markets and they have a good public image which gives them an upper hand in marketing and sale of their products and services. The performance level which is stimulated by employee motivation enhances quality and abolishes bottlenecks in processes and procedures in the running of the business.


FMLink Group, (2008).The Business of Ethical Behavior. Retrieved 18 May 2010, from

Luftig, Jeffrey, T. & Steven Ouellette, (2009). The Decline of Ethical Behavior in Business. Retrieved 18 May 2010, from

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