The question of the relationship between morality and professional or business success is one of the key dilemmas of our time. In an era of advanced technology, globalization, and intense market competition, it is worth considering whether acting according to ethical principles supports or hinders achieving measurable success in business. This article, based on the latest international research, analyzes this complex relationship.
Theoretical Framework of Morality in Business
Business ethics refers to the principles guiding decision-making processes in organizational settings. As Professor Nien-hê Hsieh of Harvard Business School explains in the “Leadership, Ethics, and Corporate Accountability” course, leaders often have to navigate the “gray zone” where the line between good and evil is not clearly defined. In such situations, maintaining transparency, being open to feedback, and considering the impact of decisions on employees, stakeholders, and society become crucial.
Professor Vikram Gandhi from the same university suggests thinking about ethics in terms of external effects: “What are the external effects, both positive and negative, that your business creates? How can you increase the positive element? And how can you reduce the negative one?” This approach allows for a pragmatic view of ethics in a business context.
Studies published in the MIT Sloan Management Review show that organizational ethics is significant for most employees and managers. Furthermore, people prefer to work for employers whose values and principles align with their own. There is a proven link between ethical leadership and task performance, organizational citizenship, and other productive workplace behaviors.
Morality and Long-term Organizational Success
Does an ethical approach to business promote or hinder success? Research suggests that ethics can be a key factor in long-term success.
According to an article published by the Forbes Business Council, ethical leadership significantly impacts employee engagement. When leaders consistently demonstrate ethical behaviors, they establish a culture of trust and fairness, leading to increased employee satisfaction and engagement.
Moreover, research cited in a LinkedIn post suggests that companies with a strong ethical culture achieve results that are 40% better than their competitors. This statistic suggests that far from hindering success, ethics may actually be a catalyst for it.
French studies on management ethics and leadership indicate that a value-based approach and high moral standards aim to direct the choices and actions of the company toward more just and responsible behavior. This approach places particular emphasis on concepts such as fairness, honesty, social responsibility, transparency, and respect for the rights of all stakeholders.
Ethics as a Business Strategy
From a strategic perspective, an ethical approach can bring tangible business benefits. Studies published in Universia Business Review indicate that ethical companies enjoy a better reputation among stakeholders, customers, investors, and society due to their consistent adherence to principles that prioritize honesty, integrity, and social responsibility.
An example of a strategic approach to ethics is the case of Salesforce, whose CEO Marc Benioff became known for promoting pay equality, gender equality, and social responsibility. This commitment to ethical leadership not only strengthened Salesforce’s reputation as a socially aware organization but also positioned it as an employer of choice.
It is worth noting that in today’s business environment, where social media and the internet provide unprecedented transparency, unethical practices are more quickly detected and publicized, which can lead to serious reputational and financial consequences.
Ethical Challenges in the Pursuit of Success
Despite the benefits of an ethical approach to business, the challenges it poses to organizations cannot be ignored. Entrepreneurship research points to potential adverse effects and moral risks in the pursuit of business success.
These adverse effects can directly impact individuals, affecting physical and mental health, economics, legality, personal relationships, social capital, and even leading to modifications in the values and principles of entrepreneurs. Additionally, they can affect the economy, society, and the environment, particularly in the context of weak institutions and management.
Studies in organizational psychology emphasize the importance of active listening as a powerful tool for preventing and reducing organizational diseases and stress, as well as increasing efficiency. This suggests that an ethical approach to people management can help overcome some of the challenges related to the pursuit of success.
Practical Examples
Business history provides numerous examples illustrating the role of ethics in achieving success:
James Burke and the Tylenol Crisis (1982): As CEO of Johnson & Johnson, Burke demonstrated unwavering commitment to customer safety by quickly recalling all Tylenol products from the market after poisoning cases. Prioritizing public good over short-term financial interests not only saved the brand but set new standards in the industry. Today, Johnson & Johnson is one of the most respected companies globally, and its ethical code, “Our Credo,” is studied in business schools worldwide.
Marc Benioff and Salesforce: In 2019, CEO Marc Benioff drew attention as an advocate for pay equality, gender equality, and social responsibility. This commitment not only strengthened the company’s reputation but helped attract top talent. Salesforce consistently ranks among the best places to work and is one of the fastest-growing companies in the tech industry.
Patagonia and Yvon Chouinard: The founder of Patagonia, a clothing company, has always adhered to ethical principles, introducing sustainable practices and allocating 1% of sales to environmental protection. In 2022, Chouinard transferred the entire company, worth $3 billion, to a trust fund to ensure that profits would be used to fight climate change. Despite these “unorthodox” business decisions, the company has achieved enormous market and financial success.
Volkswagen Scandal (Dieselgate): A negative example – in 2015, it was revealed that Volkswagen had installed software in its cars that falsified emission test results. The consequences were devastating: $30 billion in fines and compensation, a dramatic drop in stock prices, and a loss of customer trust worldwide. This case shows that short-term benefits from unethical practices often lead to long-term losses.
Conclusions
The analysis of international research suggests that morality and ethics not only do not hinder business success, but they can be a crucial factor, especially in the long term.
Companies with a strong ethical culture enjoy greater stakeholder trust, higher employee engagement, a better reputation, and, as research shows, often better financial results. However, implementing ethical practices may involve some challenges and may require sacrificing short-term profits for long-term gains.
As researchers from MIT Sloan Management Review note, ensuring that employees understand the appropriate ways to resolve everyday ethical issues can prevent a company from sinking into corporate scandals.
In the context of growing social awareness, tightening regulations, and increased transparency, an ethical approach to business seems not only a moral imperative but also a strategic choice leading to lasting success.
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