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With an actual example of how and why taking a high ethical ground results in a good decision for business

Describe an actual example of how and why taking a high ethical ground results in a good decision for business.

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Question asked by devi_ghimire

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dipadhungana profile image

Ethics are the values related with human conduct that deals with what is right and wrong or what is good or bad. However, many people argue that ethics depend on situation (Aamkobe, 2017). Relating to an organization, ethics is not merely a code of conduct, but a way of acting that incorporates organizational culture, processes and outcomes (Butts). Ethics are very important in entrepreneurship. Many researchers show that ethical behavior is the core for long-term business success as it helps to maintain balance between business and personal relations (Spinelli & Adams).

The organization I work in does not have fixed organizational hierarchy and the roles and responsibilities of the staffs are also not defined properly. The person who was working on the organization for more than six years and was a close relative of CEO was given the authority to take all the major decisions of the organization relation to finance, operation and marketing. That person did not possess prior work experience and managerial or financial background. But the CEO of the company trusted him as he was working with the company for such a long time and never questioned any decisions he made.

Last year on going through the financial statement of the company, the CEO found out that the accounting and financial statements were not maintained properly and the company’s fund were misused. On discovering this, the CEO was in great dilemma. The reason behind this was if he fired the person, there was no one in the organization who could immediately take his position. In addition, some of the other people who were working closely with him were also involved in misusing the fund and they need to be fired as well. The relationship between CEO and the staffs also make it difficult to reach a conclusion. This will make all the experienced staffs go out of the company at once putting in difficult situation. If immediate action was not taken, it was also the loss for the company.

The CEO decided to be ethical and fired five staffs at once. All the remaining staffs were new and were not much aware about the company’s operations. There was no one to look after the finance and accounting and day to day transactions were also hampered. Being ethical was costing a lot for the company. After some time, a chief operation officer was hired who has relevant experience in management and finance. From then, the company slowly started taking pace and the revenue of the company in following month marked the highest in last five years.

This proves that taking a high ethical ground results in a good decision in business though it may take some time to show the results.


Aamkobe, D. F. (2017). Business Ethics. Research Gate .

Butts, J. B. (n.d.). Ethics in Organizations and Leadership. Jones and Bartlett Publishers.

Spinelli, S., & Adams, R. J. (n.d.). New Venture Creation: Entrepreneurship for the 21st Century (Nineth ed.). Irwin: McGraw Hill Education.

ncitujjwal profile image

The study of good business practices and rules concerning issues of controversy like corporate social responsibility, corporate governance, corruption, unfairness and fiduciary duties are called business ethics (Gross & Holland, 2012). In business most of the times rule and law guide the ethics, at first office starting day the HR department of that office provides the rule, regulation and policy book to all employees. There is mention all the things what you can do or what don’t? This means there is clearly mention your role and responsibly clearly with consciousness. If any business ethics make clear understanding, builds trust between the consumer and staffs and boards. If any staffs possess her/his value and ethics with their customer then only business grow otherwise there might be big trouble. The 21st-century business concept is customer focus so that we should keep in our mind customer are god for us so we always give them respect internally not forcefully. Internal respect, ethics just managed through our core values which guide us in a right way. Every times rulebook and guides might not be useful sometimes we will be able to decide through own way at that time value guide us in positive direction. For example: Mr. Ram is a CEO for "A” class Bank in Nepal and his bank is making maximum profit in Nepali Market. He is good in leadership and team building capacity. He motivates easily his entire team. His son also graduated in MBA from one of the reputed university in Nepal. So he direly enter his son in office as an Assistant Manager which is unethical to all staffs. They are waiting from long time to that post but one guy who has good academic but not experience in managerial position is unethical for appointing him as a Manager. So due to that only one reason Ram is Unethical.

Nowadays, every business firms are aware of business ethics. The awareness of business ethics raised in 1960’s because firms became aware of the customer’s increasing awareness or environment? An issue, social issue and business responsibility (Barrett, 2014). In above case, Ram wasn’t able to handle the business responsibility. The book can’t guide the business ethics so we need a value which we learned from our childhood, school, college and professional culture. So value drive us properly and these are Accountability, Transparency, Integrity, Trust, and Meritocracy etc.

Now, here I am going to present a real story of good ethical practice in TATA industry. Mr. Ratan Tata is founder and president for TATA and TATA is the big industry in world. TAJ is a Hotel which was acquired by TATA companies and Mr. Cyrus Mistry was CEO of TATA Company. He has high level of intensity, passionate in hospitality industry and visionary guy. He saved TAJ Hotel, when terrorist attack was happed in 2008. He has better skill to solve any kinds of problem. He is good leader and team players and expert in Hospitality industry. But he did one mistake in TATA industry. He faced sexual harassment charges in there then Mr. TATA take an initiation and did deep inquiry after that fired him from TATA industry. Which is one of the best ethical business decision in international business. So that, TATA is renowned for its long standing ethical culture and yet it is one of the most spectacularly profitable companies of all times (Friedman & Lewis, 2014).


Barrett, R. (2014). The Importance of Values in Building a High-Performance Culture. Barret Value Center .

Friedman, H. H., & Lewis, B. J. (2014). A new kind of CEO for the global information age: Business Quest and Cyres Mistry Case Study. Retrieved from westga.edu/~bquest/2014/ceo2014.pdf.

Gross, R., & Holland, B. (2012). Corporate social responsibility and employee engagement: Making the connection, Retrieved from. mandrake.ca/bill/images/corporate_....

shantamilan profile image

Ethics is an innate behavior of humans when it comes to things that affect another human being. But as of late ethical issues have been subsided for economic gain and power. "There is so much hypocrisy in today’s world that even totally ethical behavior is questioned since many people think it is some new negotiating technique (Spinelli, Jr. & Adams).” Therefore every entrepreneur should understand the implication of their actions and take the high ethical ground which will eventually result in a good decision for business. But in doing so they must be able to communicate it as genuine act as well. Let us discuss some examples where taking the ethical ground has resulted in a positive ending which not caring for ethical issues has done the opposite.

Let us take a recent example from right here in Kathmandu. An eatery that was gaining popularity and had been able to brand itself among so many other similar eateries, Bajeko Sekuwa, has not gone under and was forced to be sold off. The reason was that the owner was found to be involved in illegal smuggling of gold and was eventually caught. This unethical decision on the part of the owner reflect negatively on his business so much so that it had to be sold off. "The special investigation committee probing the 33 kg gold scam raided the outlets of Bajeko Sekuwa, a popular chain restaurant in Kathmandu. The committee today screened through the outlets in Anamnagar, Sorhakhutte, Samakhushi, Battisputali, Kamalpokhari and Gairidhara. Following the raid, the committee sealed off the outlets (RASTRIYA SAMACHAR SAMITI, 2018).”

Comparing this with the issue in Starbucks, where two men from African American decent were arrested and this caused a public negative view of the brand. Keven R. Johnson the CEO of Starbucks, released a statement saying that he hoped to meet the accused and apologize face to face. He also informed the public in the statement to investigate the issue and change practices to prevent such situation from happening in the future (Stevens, 2018). Such swift ethical decision by the CEO on addressing the issue stopped the incident from escalating and help restore the image of the company.

These are two examples where we can see the decisions taken by the owner of the company and how it affected their success. Therefore taking ethical decision is a good decision for business.


RASTRIYA SAMACHAR SAMITI. (2018, June 13). Smuggling probe committee raids, seals Bajeko Sekuwa outlets. The Himalayan Times .

Spinelli, Jr., S., & Adams, R. (n.d.). New Venture Creation . New York City: McGraw-Hill Irwin.

Stevens, M. (2018, April 15). Starbucks C.E.O. Apologizes After Arrests of 2 Black Men. The New York Times . doi:nytimes.com/2018/04/15/us/starbuck...