Do Business Ethics Pay?

Asking whether business ethics pay may be the wrong question to ask. Behaving ethically should

happen because it is the right thing to do. However, companies large and small are in the

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business of making money, so the question is not an unreasonable one. Good ethics carry many

benefits, not the least of which is financial good health. Companies that “outbehave” the

competition ethically will also tend to outperform them financially. [8]According to an Institute

of Business Ethics report, companies with a code of conduct generated significantly more

economic value added and market value added than those companies without a code,

experienced less price to earnings volatility, and showed a 50 percent increase in average return

on capital employed.

Business ethics also pay in other ways that will improve the workplace climate and, ultimately,

positively impact the bottom line. They can “reduce incidents of corruption, fraud, and other

malpractices; enhance the trust of customers, suppliers and contractors; enhance the credibility

of buyers and salespersons; and enhance the loyalty and goodwill of employees, shareholders

and customers.”

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