Importance of Business Ethics and Its Factors

Home Articles Importance of Business Ethics and Its Factors

Business ethics refers to professional values; it examines the principles and ethical problems of any organisation. The organisation has to take care of the society and should take the steps that are in the interest of the society being an organ of society. The organisations that set examples for the people have to follow the ethical beliefs and values so that they do not harm the society by any chance. The companies set some rules and regulations for the people working in it even they set a standard for the operational tasks for all the executives working in the organisation. These standards are based on the situations of the economy and the society.

Certain authorities are delegated as per the ethical decisions in the society, but you must first read the article elements and features of the delegation of authority for the complete knowledge of the topic.


  • While dealing with other companies, the business should be fair so that it must have the fair deal with the people outside the organisation.
  • The business ethics should be same for everyone working with it. The performance should be connected with the reward system for the motivation of the employees.
  • If the ethics are violated by anyone in the organisation, the strict and immediate action should be taken to set an example for the society.
  • The ethics of the organisation are based on the guidelines of the organisation and then decided what should be done and what should not be done.
  • In the business ethics, it is assumed that only ethically right things are to be done for the betterment of the organisation.


The business ethics depend on the three main factors that are law, culture and religion. Further, we will study these three sources.

  • Law

Business ethics most of the times follow the legal guidelines of the country, and they also influence the behaviour of the human beings. The society has to comply with the laws formed by the legal system of the country.

The country also expects all the organisations to follow the legal rules and regulations of the country, but not all the organisations follow the guidelines formed by law. Companies tend to break the laws, and it is common in the corporate world. 

  • Culture

Culture is the set values, perceptions, preferences, ideas, morals and code of conduct etc. It is something that divides the people into different groups. It refers to the pattern of the development of the whole society, their ideas, laws, norms of society and daily rituals.

Culture is also transferred from one generation to the next one. Thus, the ethics also differ from person to person. The things that we consider as the ethics might not be the ethics for someone else.

  • Religion

Religion is the most common foundation for the inspiration of the ethics. There are uncountable religions, each having their ethical values. The religion is the main source to teach the people about the moral values and the ethics; they teach them about the rights and the wrongs in the society so that the people can be better human beings.

But all the religions teach the humanity about the responsibility towards the society and try to make them work on the contribution towards the welfare of the society. Thus, all the religions make their code of conduct.


  • According to the basic needs of people

Everyone aspires to work in an organisation that works on the ethics and morals. People feel proud of working in an organisation that respects the society and work honestly. The corporates that understand the social responsibility attracts more people and play a major role in the satisfaction of the employees. It is the responsibility of the HR manager to satisfy the needs of the employees, and they are also responsible for the maintenance of ethics of the organisation.

  • Reliability in public

The ethical values create a good image of the organisation in front of the public. The company that follows the moral values and highlight it in public attracts more customers, and people tend to trust them very easily. People consider it more honest, and they become famous. That’s the reason why companies spend a huge amount of money to make belief through the advertisements that their product is healthy and safe for all to use.

  • Reliability in employees

People like to work with the organisations that believe in the ethical values. And being an employee, it is important to have trust in your company which can be there if the company is working on the ethical values and doing something great for the society. Even if the company has a bad image, the employees will be satisfied.

  • A good decision making

The company will focus on every decision they are taking while following the ethical values. They will think from the perspective of society while making any decision and try that their decision is ethical as per the societal norms and values.

  • Increase in profitability

The profitability of the company increases if they follow honest and trustworthy. Being ethical does not mean that the company does not work on raising the profitability. Profitability is also a necessary part of the growth of the organisation. The companies following the ethical values might face the losses in the short-term, but they achieve success in the long-run.

  • To save the society

Ethics are essential to save the society, and these are more effective than the legal system of the country. Ethics generally succeed in the situations where even the law has no effects. The activities that are harmful to the society cannot be regulated by the government even if they are applicable by the law.

In this way, to run the organisations with ethical values is quite essential, it will be beneficial for the company itself, the employees working there and the customers.