Question

Why might ethical corporate behavior actually lead to higher profitability (and not the opposite)?

Answer 1

Ethical culture is defined as the character of the decision-making process that corporate use to determine whether their responses to ethical issues are right or wrong based on values and norms. It is positively related to workplace confrontation over ethics issues, reports to management of observe misconduct, and the presence of ethics hotlines. If an organisation is associated with a superior ethical culture in an organization and the presence of a formal ethics such as, norms, artifacts, and behavior faces the positive outcomes of lower observed wrongdoing and greater likelihood of reporting violations. In organization it has to be mandatory for all employees (also including upper-level personnel) to receive fraud prevention and detection training programme. Ethical culture would create a positive work environment that will help deter to fraud while improving the morale and loyalty of employees. Also business that demonstrate and feel greater levels of loyalty to their company will be less likely to commit fraud. Moreover the investors, analysts, and advisors are taking a close look at the reputation of an organisation and perceived ethical culture of an organization as part of their evaluation. Due to all these factors corporate behavior actually lead to higher profitability compared to those corporate who does not behave ethically because ethics always pay in long run.