The Case for Implementing Strong Business Ethics

The idea of implementing and enforcing a strong code of Business Ethics in for-profit organizations may sound like it could only be appreciated by New Age gurus and Marxist rebels operating in the jungles of South America, but it actually makes good business sense, can save companies their hard earned money, and protect their reputations.

There are advantages to implementing and enforcing a Business Code of Ethics. Corporate culture starts from the top and works its way down through the ranks, and most workers tend to adopt the business values of the corporate leadership. Implementing and enforcing a strong set of Business Ethics makes it easier to retain good employees who know they will be treated fairly, and will be heard if they speak up about potential wrong doing. On the other hand, lack of Business Ethics could encourage employees and management to cover up or hide problems. This may work in the short term, but could cause much larger problems in the long term. (Wadhwa 2013).

Second, implementing strong Business Ethics can attract good customers and vendors. Customers are more comfortable knowing they are buying services or products from a company that acquires materials and utilizes labor in a responsible and ethical manner. Some people buy their coffee based on whether or not it’s picked in a sustainable manner, by people who are paid a decent wage. Companies that practice and enforce Business Ethics are less likely to get in trouble for poor behavior. (Joseph 2013).

One example of corporate misbehavior is the recent General Motors recall of faulty ignition switches in several automobile models. In February 2014, General Motors finally began a recall of 2.6 million cars for a problem that was first detected in 2001 – thirteen years ago. This faulty ignition switch could automatically turn the car’s engine off and prevent airbags from deploying while the car was moving. GM itself believes that the faulty ignition switch is responsible for 31 crashes and 13 deaths. (Basu 2014). If GM had owned up to this problem when it was first detected, those fatalities may not have occurred, and its reputation untarnished.



Basu, Tanya. Timeline: A History Of GM’s Ignition Switch Defect. March 31st, 2014. (accessed April 5th, 2014).

Joseph, Laran. Importance of Business Ethics and Corporate Social Responsibility. December 10th, 2013. (accessed April 5th, 2014).

Wadhwa, Vivek. Wall Street Journal: Corruption in Business and the Importance of Ethics. June 29th, 2013. (accessed April 5th, 2014).

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