The stories of corporate misdeeds often conclude with civil settlements being that are paid by authorities like the U.S. Department of Justice. But how will future business affected when an organization is found with its fingers inside the cookie bowl? Research conducted by University of Notre Dame University of Notre Dame suggests that you are already aware that unethical conduct is incredibly detrimental to the business’s future.

The study, which was published within the Journal of Applied Psychology, investigated the connection between the level of the service that a company provides and its commitment to ethical standards by investigating the working conditions of over 200 movie theaters. The results show that high-quality services and an ethically-sound business plan are crucial for long-term success of a business.

“Both high-quality service and low unethical behaviors are important to predicting business unit performance,” Kaifeng Jiang, the principal researcher for the research and an adjunct professor at Notre Dame’s Mendoza College of Business at the time of the study explained to Business News Daily. “This is especially so when the market is very competitive, because then the customers have a lot of options and could … switch to another product or service provider. “

In their study of theaters, they discovered that higher-quality service had a positive impact on operations when the level of ethical compliance was also very high. However, when unethical conduct was prevalent, the high-quality services had a less influence on the effectiveness of the business.

“While carmakers and banks strive to provide superior customer service, their unethical conduct and the resultant fines inevitably jeopardize customer trust and diminish long-run financial returns,” the coauthor Jasmine Hu, an assistant professor of management at the University of Notre-Dame’s Mendoza College of Business at the time of the study in an announcement.

Ethical Behavior Is Critical In The Business World

The authors provided a number of important conclusions from their research that can help entrepreneurs and managers to provide high-quality service and the company’s culture of consistent ethical behavior:

  • Excellence in service is a vital but not sufficient condition for the success.
  • Create service and ethical environments that work together to influence the service and ethical conduct for employees who are not under supervision.
  • Business owners must be proactive in preventing ethical behavior is a problem by regularly assessing employees’ views of the ethics of the business.
  • Services and ethical conduct are important in turbulent or competitive markets, with the intensity of competition being the most significant.

Jiang stated that business owners can create an ethical environment by hiring or making promotions to executive and employees who have been committed to observing high ethical standards as well being able to do so by setting up a particular ethical code for employees to adhere to. Jiang also pointed out that the setting of the business is the primary factor that determines how the company is impacted by the combination of quality service and an exemplary moral standard.

Jiang and Hu’s co-authors included Hui Liao, from the University of Maryland; Ying Hong who is who is from Fordham University; and Songbo Liu, who is from Renmin University of China.

What is ethical conduct?

Someone who exhibits moral behavior is a sign of an unshakeable moral code and an unchanging value system. Ethics are built on faith or the goal of making the world a better place. The people who exhibit ethical conduct are ethical regardless of whether or not they get the credit for it or not. This type of behavior is not restricted to the workplace. It is a part of every aspect of our lives.

In the workplace ethics are a requirement for anyone who is an employee, team leader or supervisor. They must exhibit an honest and ethical in the interactions with colleagues and their customers. Good ethical behavior can have an impact on morale of the company and customer relations. It’s much easier for companies to keep employees who are working for an organization that they trust. Employees are looking to be employed for businesses that treat all employees and their clients with respect and employ ethical and ethical business procedures.

An ethically high standard is extended to customers too. A reputation for an ethical and positive behavior attracts more customers, clients and partners to cooperate with your company. It also creates trust with customers over time, resulting in a loyal customer base who will likely to recommend your company to other people.

What is the reason ethical behavior is crucial?

To appreciate why ethical behavior is crucial, it could be beneficial to understand what the impact of unprofessional behavior is on an organization. Imagine a company which only hires family members, or one that provides unjust rewards, for example. Although these practices may not be unlawful however, they could impact negatively on the morale and the success of a business.

On the other hand an individual leader who exhibits moral behavior will be fair in all circumstances. The employees can trust that their management team is focused on the good of the company as a whole. If leaders are ethical, they can create an environment that promotes and encourages good behavior.

What are some examples of ethical conduct?

Ethical behavior is characterized by honesty integrity, fairness, integrity and various other desirable traits. The people who have other’s concerns in their mind when making choices are showing ethical conduct. Here are some other examples of ethical behavior

Respect for other people

Whatever how close the bond between two people and what they are able to agree or disagree on, people within an organization should respect one another. This includes employees, managers and subordinates, coworkers and customers. If there is a foundational standard of respect, people take criticism less personally, can speak more clearly and are able to see and appreciate the other’s view.

Open communication

Successful businesses communicate effectively. If there are lines for communication remain opened and people are happy to talk with each other, miscommunications are prevented. Being constantly in conversation and reminders make more difficult for employees to violate an agreement or produce a lower-quality output.


Errors and confusions are inevitable to happen in every work situation. However, when they do, employees must to accept responsibility for the actions they took. They must take the responsibility for the events that occurred and take the initiative to correct the problem. If there is a set of standards of accountability within an organization, people are held accountable to them and their coworkers to a high standard of conduct.

What’s the definition of a code for ethics?

At work, there could be a set of rules for ethics that is set by the business. A lot of companies have codes of ethics which could contain general guidelines for ethical conduct in acting in a moral manner and keeping fair. It may also define specific guidelines within the company. For instance an ethical code in a medical office could be a commitment to putting the patient first and being patient in difficult situations. For a college an ethical code might include being truthful and impartial when it comes to giving grades and acting as a catalyst for different perspectives within the classroom.

Businesses must create and exhibit their ethics code publicly. The company’s values, vision and goals must be clearly defined and accessible to employees and customers so that they is held to the same standard. A code of conduct builds confidence and credibility within an company and fosters an environment of transparent and truthful communication. If an ethical standard is set by the top and is followed by the management, then everyone working there will be expected to hold them and one another to those standard.



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