Customers
Ethical organizations
tend to treat their customers in a fair manner in terms of pricing and product
quality. Ethical businesses offer the customer the right quality of product and
at the right price in order to satisfy the needs of their customers. The
satisfied customers develop a good attitude of the organization and its
products. This good perception
of the company in terms of quality and pricing of items encourages the
customers to build their loyalty to the organization and widens the market of
the organization leading to a strategic success in business.
Unethical organizations
sell low quality products at exorbitant prices in order to maximize revenues.
In the short-run, these unethical organizations manage to exploit the markets
and gain high revenues from deceiving the public about the quality of its
products. However, there are dire long-term implications of this deception on
the business success. The customers will
reject the organization’s products and even sue the organization for
compromising on their safety.
Cost of ethics
Maintenance of ethics in
business comes with its own costs. These costs may include costs of auditing,
supervision, training, intelligence systems, hiring the right people among
other related costs. These costs may form a significant part of the
organization’s expenditure and minimize the profits of ethical organizations.
However, the strategic implication of spending on ethical behaviors is positive
and facilitates success of the business.
An unethical business
may be unwilling to spend on improving its ethical practices and instead,
maximize its current profits. In the long-term, an unethical organization,
spend more on saving its diminishing corporate image, defending itself in
lawsuits, and ultimately losing its customers to other organizations. The overall effect is reduced success in
business.
Averting competition
In this era of
increasing competition in business, many organizations devise strategies that
will enable them to overcome business rivalry. Ethical businesses engage in morally acceptable practices in order to
beat competition. These ethical organizations believe that the use of fair
means to beat competition is essential to maintain the market share and the
good reputation among the customers. These fair practices may lead to failure
in competition especially where there is stiff competition. In situations of failure, the organization can restructure its
strategy and gain back its market share.
Unethical organizations
engage in unfair practices in order to win over market segments. The unethical
organizations may tarnish the brands of the competitors, and engage in
corruption to use the authorities in frustrating the businesses of the
competitors. The organizations are likely to gain a
significant market share and succeed in business as compared to ethical
businesses. However, when these secret adverse tactics become
public, the unethical organization is likely to lose its customers’ trust and
ultimately lose the customers themselves.
State support
Organizations that
engage in ethical practices are likely to receive state recognition in their
activities, which is a plus in improving customer confidence in the
organization. The state may invest in such ethical organizations
and offer the organization privileges based on its contribution to societal
welfare. This support by the state is fundamental to
facilitate the success of the business.
Organizations that carry
out unethical practices are subject to frequent government interference and
investigations. These businesses are likely to fail since the
government interruptions affect business operations and send an adverse message
of trust to customers.
In conclusion, ethical
businesses tend to have better chances of success in comparison to unethical
businesses.
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