The paper “ Unethical Businesses Are Not as Successful as the Ethical Businesses" is a dramatic example of coursework on business. In the UK, there has been a salient emphasis on the need for businesses to operate in an ethical and responsible manner. The institute of business ethics established in 1986 has been focusing on ensuring that all the businesses adhere to the codes of ethics. As a requirement, businesses should have a company code of ethics that conforms to the United Kingdom law, and that promotes corporate social responsibility. Business ethics are a critical part of corporate social responsibility.
It ensures that businesses make ethical decisions in an effort to maintain favorable relationships with all the different types of stakeholders. Prior to the establishment of the institute of business ethics, many businesses focused on maximizing profits without giving attention to ethics (Webley & More 2003, p. 66). Over the years, some businesses with an elaborate code of ethics have failed to adhere to it, opting to rely on decisions that bring forth short-term profits. The leaders of such businesses opine that operating ethically does not make businesses successful.
Although there is a misconception that ethical businesses are not as successful as less ethical, a close analysis of some examples in the United Kingdom reveals that ethical businesses result in success in the long-term. This paper will highlight that ethical businesses prove to be more successful. In addition, the paper will also highlight that the less ethical businesses eventually collapse. As highlighted above, many businesses did not recognize the value of ethical behavior in the past. Therefore, corporate leaders made decisions that promoted the interests of the shareholders.
In the view of such leaders, businesses only had the responsibility of maximizing profits. Many businesses indulged in unethical and irresponsible behavior causing adverse effects on the environment as well as to the consumers. However, after the establishment of the institute of business ethics, businesses had to adopt a broader view of the need to operate ethically. It was a requirement for businesses to have a code of ethics that governed their operations (Cernușca 2011, p. 39). However, many of the businesses put in place a code of ethics but continued to operate unethically.
The example of the Enron Company depicts how unethical behavior can cause the collapse of a business. The executives of the Enron Company focused on profit maximization without giving regard to the established code of ethics (Moore & Robson 2002, p. 33). Although the company flourished for a while, a scandal emerged that took it down. The executives of Enron Company received jail terms for their unethical behaviors. The example of Enron is one of the many scandals that have ruined the reputation of unethical businesses in the United Kingdom.
Businesses that operate unethically have a bad reputation, which eventually affects their financial performances (Fauzi 2008, p. 240). On the other hand, businesses that have embraced the value of ethical behavior and corporate social responsibility have integrated their business strategies with their CSR strategies. Notably, there is evidence that adopting ethical behavior serves as a long-term strategy for improving the profitability of a company. Ethical businesses attract loyalty from customers a factor that ensures that the business will register increased sales and profits.
In addition, ethical businesses are more likely to retain talent within the organization because employees are willing to stay with the organization (Floyd et al. , 2013, p. 764). Ethical behavior and an evident CSR strategy serve to attract more investors to the business. For this reason, the increasing number of investors contributes to the rising share price of the company. On the contrary, unethical behavior can lower the share price and cause disinterest in investors. The case of the BP Company and its unethical behavior that triggered the oil spill served to discourage investors.
The company’ s share value went down immensely (Sun 2012, p. 472). In addition, the company’ s reputation was ruined, and the public criticized the leaders. Companies that have focused on maintaining ethical behavior have proved to be highly successful. It is unfortunate that many companies focus on increasing profits in the short term without giving attention to the long-term effects of unethical behavior (Mellahi, Morrell, & Wood 2010, p. 88). ConclusionUnethical businesses are likely to register increased profits on a short-term basis because they focus on profit maximization.
However, unethical behavior causes the collapse of such businesses in the long-term. With the increasing emphasis on business ethics and CSR, the United Kingdom does not condor unethical business practices. Over the years, unethical businesses have been exposed to scandals that have ruined their images. With a bad reputation, a company’ s sales and profits decrease. The company’ s share value is also affected adversely. On the contrary, ethical businesses register financial success in the long-term. Through the implementation of their ethical and CSR strategies, such businesses develop effective relationships with all the stakeholders, a factor that contributes to success.