LINKING ETHICS BEING THE CORNERSTONE TO BUSINESS SUCCESS

Longman Business Dictionary (2017) defines ethics as “moral rules or principles of behaviour
that should guide members of a profession or organization and make them deal honestly and
fairly with each other and with their customers”. Thompson, Strickland and Gamble (2008:318)
define business ethics as “the application of ethical principles and standards to business
behaviour. Ethical principles in business are not different from ethical principles in general.”
According to the School of Ethical Relativism,” different societal cultures and customs have
divergent values and standards of right and wrong – what is ethical or unethical must be judged
in the light of local customs and social morals and can vary from one culture or nation to
another”,[ CITATION Rux17 \l 2057 ] . According to the School of Universalism, “the same
standards of what’s ethical and what’s unethical resonate with peoples in most societies
regardless of local traditions and cultural norms; hence, common ethical standards can be used to
judge the conduct of personnel in companies operating in different societies, markets and cultural
circumstances”,[ CITATION Rux17 \l 2057 ] .

Unethical behaviour
It is important to know how some businesses tend to be unethical in their business before we see
how ethics are the cornerstone for the business success. Ray, Hornibrook and Skitmore
(2000:140) stated that “the basic concern of ethics is the meaning and justification of utterances
about the rightness and wrongdoing of the acts in particular: and/or means, the praise-worthiness
of the acts themselves; ends, the positives or negatives or consequences to which they give rise
to; and the character of the agents that perform them”, [ CITATION Rod10 \l 2057 ]. In today’s
Malawi construction industry, people working in the industry are affected by its moral climate
but, at the same time, they mirror current societal morality in their behaviour. For those working
in the construction industry, much attention is concentrated on competitive tendering, a process
whereby a sequence of promotion, pricing, product and distribution decisions take place; these
are the contractor’s core marketing function. The contractors need to market themselves and the
pressures involved in winning the tender lead to the unethical practices.

Business success
To understand how ethics leads to business success we have to know what is business success.
There are many points of view about business success which shall be discussed below but what
we know for sure is that success always brings an award for those who hold it. In fact, this award
is the one who triggers people for gaining success. But an exact recipe that would lead a
company to success cannot be set as success does not mean same thing to everyone: for some
people, being successful means to reach a top position and have enough money to leave happy,
without worries and fears regarding the future. For others, having success may consists of being
a top seller on the market. But business success is not only about selling products that suites the
market. This is the result of having success and it starts with the leadership of the company. In
his book, Baggett (2000) has shown that within a company, leaders should be the firsts who
strive for company’s success and the best leader is the one who serves the others, thinks that
finding a solution represents a higher priority than placing blame, understands the power of
synergy, is flexible, open minded, fully accepts responsibility, shares knowledge, knows that
employees want to be heard and understood, learns from failure, listens with his ears as well as
with his heart, place effectiveness ahead of efficiency, [ CITATION Rux17 \l 2057 ].

For other authors like Gagliardi (2006), business success means to be better than the competitors
on the market and in its opinion the key of success is to develope dominating competitive
positions that cannot be attacked by competitors. In his book, Gagliardi presented nine formulas
that describe how to build dominant positions and have business success. Techniques for
eliminating barriers to profitable growth, change management, business process improvement
represents the basis of business success says Peter Cleveland (2002), senior vice-president at
Ernst & Young, [ CITATION Rux17 \l 2057 ]. As we can see, there are many points of view of
approaching business success but one thing is clear: any company is searching for success and
the way it reaches it, may differ from one to another.

Link between Ethics and Business Success

According to Ethisphere Institute, the global leader in defining and advancing the standards of
ethical business practices, among 2016 world’s most ethical companies list there are: Dell, Ford
Motor Company, Intel Corporation, Levi Strauss & Company, L’Oreal, ManPower Group,
Marriott International, Marks&Spencer, Royal Carribean Cruises, Starbucks, Xerox (the list
includes 131 companies spanning 21 countries and 45 industries). All these companies are
business successful thus showing us an implicit connection between ethics and business success,
[ CITATION Mel20 \l 2057 ].

In his article published by Forbes, Strauss (2016) mentioned that the goal of Ethisphere’s ranking
is to offer a model on how corporate entitities should manage themselves, improving their own
activities and have business success. He said that this list “represents some of the best the
international business world has to offer”. Ethisphere (2017) evaluates firms upon 5 criteria
considered as core for ethics, namely: ethics and compliance program; corporate citizenship and
responsibility; culture of ethics; governance; leadership, innovation and reputation, [ CITATION
Rux17 \l 2057 ].

Ethical Leaders Have Productive Workers

It has been proven time and again that employees who are satisfied with the environment in
which they work are more productive than workers who are unhappy. Unethical practices in the
workplace can cause widespread unrest with employees, leading to a greater sense of
dissatisfaction with the work that they are doing and with their employers, [ CITATION Mel20 \l
2057 ]. However, when business ethics are encouraged by management and company executives
lead by example, the ability of employees to focus on the work they need to complete increases
exponentially. Productivity increases when fewer distractions are present and morale is high, and
this leads to greater profit levels for the company.

Employee happiness can also have an impact on turnover and retention, as unsatisfied workers
are more prone to seek out other opportunities, regardless of higher pay or benefits offered by
their current employer. Continuous recruitment and training of new employees can reduce the
capital a company can otherwise spend on revenue-producing activities, ultimately shrinking its
long-term profits.

Business Ethics and Public Image

Ethical values of an organisation create credibility in the public eye. People will like to buy the
product of a company if they believe that the company is honest and is offering value for money.
The public issues of such companies are bound to be a success, [ CITATION Car20 \l 2057 ] .
Because of this reason only the cola companies are spending huge sums of money on the
advertisements now-a-days to convince the public that their products are safe and free from
pesticides of any kind. On the other hand, Companies would be nothing without shareholders and
investors, and as such, operating with business ethics in mind is most important when interacting
with these crucial players. It is common for the profitability of publicly traded companies to
decline rapidly when they encounter situations where information regarding unethical behavior is
discovered, [ CITATION Mel20 \l 2057 ]. When confidence is lost, it can be a struggle for a
company to regain the trust of the public, its investors, and its shareholders; profitability may
take years to build up again.

Business Ethics in Management

The leadership of an organization holds the key to its long-term success, and remaining
consistent with a management philosophy built on a foundation of ethics creates a positive
example for all workers. Ethical accounting practices, treatment of employees, interactions with
the public, and information disseminated to shareholders are all responsibilities of the leadership
team and can have a direct impact on the overall profitability of the company [ CITATION Mel20 \l
2057 ]. When these integral aspects of a business are not performed with a resounding theme of
business ethics from the top-down, each facet of the business beneath the management team has
a greater potential to falter in the short or long-term [ CITATION Car20 \l 2057 ].

Conclusion

Indeed, ethics are the cornerstone for business success. Implementing a sound ethical policy at a
company ensures a positive impact on all stakeholders, from investors to employees to
consumers. Companies that lay the framework for business ethics in all facets of operations are
more likely to become and remain profitable than those that conduct business in an unethical
manner [ CITATION Mel20 \l 2057 ].
References
Carson College of Business. (2020, April 7). 3 Reasons why Ethical Business lead to Profit.
Retrieved from Washington State University: www.washingtonstateuniversity.com
Chilipunde, R. L. (2010). Constraints And Challenges Faced By Small, Medium And Micro
Enterprise Contractors In Malawi . Metropolitan: Mandela Metropolitan University.
Horton, M. (2020, February 28). Are Business Ethics Important for Profitability? Retrieved from
Investopedia: www.investopedia.com
Longman Business Dictionary. (2020, April 09). Definition of Business Ethicis. Retrieved from
longman: www.longman.com
Ruxandra Albu, L. M. (2017, November 20). Impact Of Ethics Upon Business Success. ISI 30th
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Madrid: ResearchGate.