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The Importance of Business Ethics

The Business Ethics Student Association continued its annual Business Ethics week. Four experts in the business ethics area were featured this year. All four speakers attested to the importance of being ethical.

For example, Sara Paul, Milwaukee President of Clear Channel outdoors and Rich Meeusen, CEO of Badger Meter both discussed what ethics mean to them and how their companies implement ethics. Both companies have greatly benefited from their ethical actions.

In contrast, John Fons, a Corporate Counsel, discussed the negative consequences of being unethical. Focusing on bribe and corruption, he discussed the stronger enforcement of the Foreign Corrupt Practices Act through much larger fines. He then discussed some of the steps companies can take to build a more ethical environment.

Business ethics remain a critical area for business today. As more companies are scrutinized for their actions, there is increasing demand for ethical behavior. Furthermore, more research shows that being ethical has many advantages.

  1. Ethical companies can avoid financial losses by avoiding fines that are levied because of unethical behavior.
  2. However, research also shows that more ethical companies tend to have more committed and satisfied employees.
  3. Customers also respond well to ethical companies.
  4. There is also growing evidence that shareholders pay attention to ethics; shareholders will often sell shares of companies that are being investigated for unethical behavior.

Thus, the overwhelming evidence suggests that good ethical behavior is good business practice.

K. Praveen Parboteeah a Professor of International Management in the Department of Management, University of Wisconsin-Whitewater. He received his Ph.D from Washington State University, holds an MBA from California State University-Chico and a BSc (Honors) in Management Studies from the University of Mauritius.

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