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 The Importance of Business Ethics

Kirjoittanut: Aman Kumar - tiimistä SYNTRE.

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 The Importance of Business Ethics



One beacon of hope endures in the maze-like corporate environment where choices determine one’s fate: business ethics. It serves as a compass that points businesses in the direction of accountability and integrity rather than just a set of rules. The necessity for ethical behaviour becomes more and more important as we navigate the intricate currents of the globalised commercial world. This investigation explores the significant importance of business ethics, analysing how it affects organisational performance and revealing how moral leadership contributes to the development of an integrity-driven corporate culture.


2.Setting the Stage: Questions Unveiled

We need to start by asking some basic questions in order to understand the essence of business ethics. What impact does moral behaviour have on a company’s credibility and reputation? What benefits does ethical leadership offer and how does it affect organisational performance? These inquiries, akin to a puzzle, establish the framework for our investigation.


3.Importance of Business Ethics

3.1 Fostering Trust and Credibility

The cornerstone upon which a company’s reputation is constructed is business ethics. It weaves confidence and trust among stakeholders, including consumers, employees, investors, and the larger community, going beyond profit margins. When a business practises ethics, it communicates a dedication to concepts that go beyond financial gain and draws in supporters of these ideas.


3.2 Long-Term Sustainability and Profitability

Not only are ethical practises a moral guide, but they are also a tactical advantage. They protect businesses from the perilous seas of legal and reputational threats. Businesses that navigate with integrity secure long-term viability and profitability, fending off waves of instability that could topple their less morally-aware competitors.


3.3 Talent Magnet

Ethics are a draw in the highly competitive talent landscape. Organisations that place a high priority on ethics attract talent—people looking for more than simply a job. Workers are more willing to dedicate their time and energy to companies that uphold moral principles and social responsibility rather than just profits.


  1. Impact on Organizational Performance

4.1 The Ethical Advantage

Empirical evidence presents a strong argument: businesses that prioritise ethics perform better than their rivals. The two main pillars of success—customer satisfaction and loyalty—are strengthened when companies act morally. This results in higher sales and a favourable brand image, starting a positive feedback loop that leads to success.

4.2 Safeguarding Financial Health

More than just a moral compass, ethical behaviour is a strategic financial safeguard when negotiating the turbulent waters of the business world. Any organisation that is involved in a legal dispute or faces regulatory penalties faces enormous and potentially financially crippling costs. On the other hand, moral business conduct serves as a strong barrier that greatly reduces the possibility of falling victim to such traps. Companies that follow ethical standards build a wall that safeguards not only their brand but also the organization’s financial stability and resilience, all of which contribute to a prosperous and sustainable future.

5.Role of Ethical Leadership

5.1 Setting the Tone

Being an ethical leader is not just a theoretical idea; it is a practical requirement. Leaders at the helm who navigate with integrity set the course of the ship. This type of leadership is a practical, everyday activity rather than just an ideal. As moral role models, leaders set the standard for behaviour in the workplace. Employees are guided to consistently uphold ethical standards in their decision-making by their actions, which have a powerful influence. The symbiotic relationship that exists between leaders and the workforce fosters integrity and responsibility throughout the organisation by making ethical behaviour not just a guideline but an embedded part of the culture.


5.2 Transparency, Fairness, and Accountability

Transparency, equity, and accountability are given top priority by ethical leaders because they are the builders of corporate integrity. Their dedication goes beyond words; they are creating a workplace where moral issues are incorporated into daily tasks and long-term planning. This strategy is ingrained in the organisational DNA rather than being an afterthought. Integrating ethics into business strategies allows ethical leaders to foster a corporate culture in which upholding moral standards is ingrained in all employees and not just an option.




In the grand tapestry of corporate governance, the thread of business ethics weaves through, connecting reputation, performance, and sustainability. Companies that prioritize ethical conduct aren’t just navigating the corporate landscape; they are shaping it. Ethical leadership acts as the loom, crafting a culture of integrity and responsibility. As we unravel the importance of business ethics, one truth becomes evident: in the modern corporate landscape, ethics isn’t a choice – it’s a necessity. It’s the compass that guides companies not just to success but to a legacy that transcends profits, contributing to the greater good of society. As we navigate this intricate web of ethics and business, one must ponder: How can we, as individuals and organizations, contribute to this tapestry of integrity? The answers lie not just in words but in actions, for in the realm of business ethics, actions echo louder than words.




  1. Treviño, Linda Klebe, and Michael E. Brown. “Managing to be ethical: Debunking five business ethics myths.” Academy of Management Executive 18.2 (2004): 69-81.
  2. Ferrell, O.C., Fraedrich, J., & Ferrell, L. (2019). Business Ethics: Ethical Decision Making & Cases. Cengage Learning.
  3. Treviño, Linda Klebe, and Katherine A. Nelson. “Managing business ethics: Straight talk about how to do it right.” John Wiley & Sons, 2016.
  4. Ethical Decision Making & Cases by O.C. Ferrell, J. Fraedrich, and L. Ferrell (2019).
  5. Managing business ethics: Straight talk about how to do it right” by Linda Klebe Treviño and Katherine A. Nelson (2016).


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